What are you buying today?

[Gregmal]

Bought a few shares of RH after hours looking for a quick buck. All I can say is, wow... really Berkshire? LOL

[Broeb22]

Gregmal, seems like PTON is only modestly more difficult to short than WeWork.

 

How big of a TAM and durable of a business can there possibly be for $2-4,000 pieces of exercise equipment and $40 per month subscriptions in an industry with a long history of fad exercise programs (and diets)?

[Gregmal]

Gregmal, seems like PTON is only modestly more difficult to short than WeWork.

 

How big of a TAM and durable of a business can there possibly be for $2-4,000 pieces of exercise equipment and $40 per month subscriptions in an industry with a long history of fad exercise programs (and diets)?

 

I dont disagree. FWIW I sold my puts on the run down and have this on the radar for a re entry either with puts or an outright short. The product is 100% a fad...its a Nordic Track with an iPad with Youtube for $40 a month... Ive been a member at some super duper high end and expensive gyms, and at times tried all the new buzz worthy fitness stuff. The truth is, for 90% of the population(the 90% of the top 10% that can actually afford this shit), this stuff is fun and captivating in the beginning and then you just get tired of it.

 

The bull case for NordicTrack, I mean Pelaton, is not that they'll sell a million machines, its the recurring revenue and subscriptions. To me, the on demand stuff is neat, and Im still trying to tally the meaningfulness of that. But at $40 a month or whatever? When people arguably won't pay $40 a month anymore for a full TV package... or they can get a full gym membership for $30 a month? Or even get fitness videos for free on Youtube and the like?

 

So yea, its kind of a no brainer, but it'll come down to timing so if you're going to put the trade on you either need to buy puts, or give yourself a very cut and clear catalyst but also a running start into it because once everyone else notices the catalyst the opportunity goes away. I typically like revisiting these a couple months ahead of the lockup expiration. Its important to remember, this isn't a SV tech company. Where all the employees are snobby dickbags and dont value money, ie, they'll hold their stock until they become billionaires because worst case they just move to the next venure and try again in a year...Its Beyond Meat or Tilray... normal people working at a company that just found themselves sitting on a restricted amount of life changing money, made in a short period of time, and they likely cant pass that up. The VC folks know this as well, which is typically why you see these get obliterated in the 2-3 month period sandwiching the lockup expiration, so typically 2 months out is an ideal time to start laying the ground work for your position.

[Broeb22]

Will you pay for the puts by selling puts well below the current price, or do you like to buy a little more OTM to reduce option cost?

 

Knowing you have specific short term catalysts and willingness to have some conviction, I’m betting you’re staying pretty close to the money and buying naked most of the time.

 

Thanks for the color on PTON.

[Gregmal]

Will you pay for the puts by selling puts well below the current price, or do you like to buy a little more OTM to reduce option cost?

 

Knowing you have specific short term catalysts and willingness to have some conviction, I’m betting you’re staying pretty close to the money and buying naked most of the time.

 

Thanks for the color on PTON.

 

It really depends. With some of the crazy high borrow cost names Ive found going 30% or so OTM and a year plus out does the trick. If you get a reasonable move down it takes care of itself. Otherwise you are still predominantly holding the time value. Whereas short dated and at the money you need to be so pinpoint with your timing its a little too much of a risk for me. Ive seen shit like BYND where you have something more or less at the money pricing in a 10% weekly move which is just insanely difficult to make money on.

[no_free_lunch]

ISV.TO.  I see returns as 5% dividend + 5-6% growth.  The dividend should protect the downside.  In a niche market.  Just a 1% position.

[Spekulatius]

WFCF (food / meat certification business), which finally showed  some decent earnings and  better operating metrics. I was following the stock for quite some time and liked the business, but wasn’t comfortable with valuation and execution until after the recent earnings report, which showed some promise.

 

DD (bought back some shares again).

[alpha]

Bought some OXY this week (yes followed Berkshire in)

[Gregmal]

Bought a little JEF at the open

[rkbabang]

WFCF (food / meat certification business), which finally showed  some decent earnings and  better operating metrics. I was following the stock for quite some time and liked the business, but wasn’t comfortable with valuation and execution until after the recent earnings report, which showed some promise.

 

DD (bought back some shares again).

 

I bought some more WFCF recently as well.  Almost doubling my position and reducing my cost basis.

[Broeb22]

Added TRRSF (aka TSU.TO)

[writser]

Buying CELG, selling BMY. Effectively buying the CVR @ $1.84, which was valued at $3.83 in May by BMY (link, page 10).

 

The preliminary estimate of the fair value of the CVRs was determined by applying a probability weighting to the potential $9.00 per share payment reflecting the probability of achieving all three necessary approvals. The probability-weighted value was then discounted to present value using a credit risk-adjusted discount rate.

 

As far as I know, all three legs are still 'on track'. According to the latest CELG 10Q:

Ide-cel (bb2121): The BLA submission for ide-cel in 4L+ multiple myeloma is expected in the first half of 2020

Ozanimod: The U.S. FDA accepted the New Drug Application (NDA) for ozanimod for the treatment of patients with relapsing forms of multiple sclerosis (RMS) and set a PDUFA date of March 25, 2020

Liso-cel (JCAR017): The BLA submission for liso-cel in patients with relapsed or refractory large B-cell lymphoma after at least 2 prior therapies is on-track for the fourth quarter of 2019

 

One can do both legs on margin. Deal close expected tomorrow. No sure money, but a decent bet. Time to leverage up the account?!

[Artha158]

Got some CELG, Thanks Wrister.

[chrispy]

Has anyone looked at ALRM? It has been hammered since past earnings call but has nice metrics. I am not sure how much something like Ring actually affects their business. Moving to small businesses now too.

 

Stock has been dropping every day so I am just waiting to see a glimpse of it stopping.

[TwoCitiesCapital]

FMCCJ @ $16

[LC]

Bought some ABS as a symbolic gesture, sold TAP a few weeks ago around 58. Breakeven sale price, made a few % from the dividends...and very happy to get it out of the portfolio.

[no_free_lunch]

Does anyone know how the $50 payout to Celgene is categorized as far as taxes?  I assume it is not a dividend, is it return of capital?

[lnofeisone]

Does anyone know how the $50 payout to Celgene is categorized as far as taxes?  I assume it is not a dividend, is it return of capital?

 

It's a capital gain/loss.

[Lance]

Wrote puts on OXY.

 

 

Thanks

Lance

[writser]

Buying CELG, selling BMY. Effectively buying the CVR @ $1.84, which was valued at $3.83 in May by BMY (link, page 10).

 

The preliminary estimate of the fair value of the CVRs was determined by applying a probability weighting to the potential $9.00 per share payment reflecting the probability of achieving all three necessary approvals. The probability-weighted value was then discounted to present value using a credit risk-adjusted discount rate.

 

As far as I know, all three legs are still 'on track'. According to the latest CELG 10Q:

Ide-cel (bb2121): The BLA submission for ide-cel in 4L+ multiple myeloma is expected in the first half of 2020

Ozanimod: The U.S. FDA accepted the New Drug Application (NDA) for ozanimod for the treatment of patients with relapsing forms of multiple sclerosis (RMS) and set a PDUFA date of March 25, 2020

Liso-cel (JCAR017): The BLA submission for liso-cel in patients with relapsed or refractory large B-cell lymphoma after at least 2 prior therapies is on-track for the fourth quarter of 2019

 

One can do both legs on margin. Deal close expected tomorrow. No sure money, but a decent bet. Time to leverage up the account?!

 

I closed that position, bought BQBBV (the CVR on an when-issued basis). Much easier. Didn't know that security even existed (though it seems tradable only as of today).

[lnofeisone]

Wrote OLN puts.

[SafetyinNumbers]

I bought some Arrow Exploration (AXL.V). It’s an oil producer in Colombia that emerged from reverse takeover / spin off from CNE.TO in November.

 

Given it’s a micro cap spinoff there could be some irrational selling going on.

 

Each Canacol share received .127 shares of AXL, so it’s a trivial amount for what is now a 35 cent stock. CNE shares trade at $4.40.

 

CNE valued each AXL share at US$0.885 each at the time of the spin and it’s trading so it’s down about 70% from that level in less than 6 months. Perhaps they were optimistic in how they valued it but it certainly has taken a haircut now.

 

Management owns 18% and cannot sell the majority shares for 18 months and the stock has to be above US$1.50.

 

EV is less than C$30m with 2P NPV at C$125m and the company is producing 1500 boe/d now and guiding to exit at 3000 boe/d. It’s production is tied to Brent pricing so it looks cheap on traditional oil company metrics.

 

I added a little more AXL.V today. I have been buying all of the way down so obviously my buying has not been predictive of future positive performance.

 

[jgyetzer]

IAC. I think the uncertainty over how the spinoff will proceed has created pressure on the stock price.

[Gregmal]

Moderate adds to TPL, started DD today and just put another single family home under contract

[Spekulatius]

Moderate adds to TPL, started DD today and just put another single family home under contract

 

I also added some DD at $65 and change today. Had bought a  2nd lot a few days ago, but sold it immediately flat when the tape turned soft. It looks like this stock is going to see $63 again in short order, but you never know.