Thursday, January 31, 2013
$GRPN Short Idea
$GRPN is near resistance at $5.50 a share. I am currently short the name, and will watch if it breaks and holds $5.50-$5.75 to cover. I don't think the business should be worth $2.4 Billion ex cash. They don't make much money right now, and can't see them making a dent in the future.
Subscribe to:
Post Comments (Atom)
GRPN eems to be on an uptrend, hope you are right. Great going on shorts on HLF and SODA. I'm wondering if I should go long on HLF. I think it might bounce back after losing 10 points.
ReplyDeleteThanks Tom! I covered some of my $HLF short after this drop, but will continue to hold the rest of my position. I did some in depth work this past weekend, and do think that in time it'll drop to low single digits. The company makes $4 Billion in revenues with 2.5M distributors, or $1600 a person! 20% of those revenues are from SHIPPING&HANDLING! Another 10-20% comes from information packets that distributors need to buy! The FTC has said that to be considered a legitimate MLM you need 50% retail sales. This is a fact can that can be seen on the FTC website. I don't see ANY retail sales, let alone 50%.
ReplyDelete$GRPN short is not as cut and dry. You do make a good point based on the chart. My feeling is that the $5.50 level has been resistance 4 times in the past. I'll monitor its price and if it breaks to the upside, can it hold those gains. I don't think they have a viable business plan that makes $$. Last year when everyone used it, they still didn't make money. They need to change their model in order to survive. It may be Groupon goods that becomes the businesses new strategy.
Nice move down today on GRPN. Looks like it's started a downtrend. Do you think $SPY has run into it's resistance?
ReplyDeleteI think this is resistance...It feels like the market just floats higher. I don't expect a major correction, but something!! 3-5%?
ReplyDeleteLooks like you got out on time on $GRPN. Upgrade was crazy, like this new biz model will work.
ReplyDeleteTell me about it...Market is so strong that I can't sit on a few shorts at the moment. It's crazy how these bad companies are squeezing. $GRPN probably won't make it.
ReplyDelete