Talking Stocks 2.0

[huncho]

Originally Posted by CoveWatch

Kinda fun today with the market mostly red AF

only good thing so far this week lol

Originally Posted by spurwar

If the warrants are essentially 5 year LEAPS, shouldn't they be trading at significant premiums, given the long runway (as they do with LEAPS)? I'm just trying to understand the downside in buying warrants that trade at a significant discount to the spread, as long as you are reasonably bullish about the company and are willing to hold through any short term volatility.

i'm not too knowledgable on the mechanics of warrants but this was from a few pages back. they're slowly closing the gap but looks like the amount of warrants is still being priced in :

Originally Posted by 7sins

Few things here. SST closed at 15.35, that would put intrinsic value of warrants at $3.85 given the strike of $11.50. They closed at $1.20 today. This is for two reasons, one there is a good amount of warrants available 25M where the float is 750k on the underlying. The reason you see a massive discount on the warrants is investors are pricing the stock will fall once the S1 is effective. Once the S1 is effective, that means the warrants can then be called. It also means that the float becomes much larger, which means how much selling pressure would we see? Management and Cannae own the majority of the outstanding float, if there is no selling pressure, the warrants will immediately gap to intrinsic value. If you get future acquisitions and a great ER (they have constantly revised outlook historically) that should place a premium into the value of the warrants (look at seatw). So you have a tremendous arbitrage opportunity depending on selling post S1. Albeit there are plenty of opportunities widely spread through the market ATM.

[spurwar]

Originally Posted by huncho

only good thing so far this week lol



i'm not too knowledgable on the mechanics of warrants but this was from a few pages back. they're slowly closing the gap but looks like the amount of warrants is still being priced in :

Ahhh. Thanks for flagging. I do remember reading that and it makes sense. Can we assume if there is low float, then the impact of the S1 will be nominal? Just trying to see if there is a way to better evaluate risk and pricing when it comes to warrants as this is all new to me (and I am definitely intrigued after the run we have had with SEAT and SST!).

[Kowaco]

Originally Posted by superdog

Anyone else buying Twitter?

Seems to me musk is just about the realest deal out there. I’m too late on Tsla. But have faith that what he touches will go up. And have always felt Twitter had wings that they just weren’t able to use.

With his guidance, and influence, my guess is that he’s going to make magic happen.

I don’t think your too late on TSLA


Sent from my iPad using Tapatalk

[Baco Noir]

Originally Posted by superdog

Anyone else buying Twitter?

Seems to me musk is just about the realest deal out there. I’m too late on Tsla. But have faith that what he touches will go up. And have always felt Twitter had wings that they just weren’t able to use.

With his guidance, and influence, my guess is that he’s going to make magic happen.

Not I. I’ve run the Twitter account for another watch forum for 4 years and I’ve used IG and FB too, and Twitter just doesn’t make sense to me. Seems like a much weaker platform compared to FB and IG.

[330ci]

Originally Posted by Baco Noir

Not I. I’ve run the Twitter account for another watch forum for 4 years and I’ve used IG and FB too, and Twitter just doesn’t make sense to me. Seems like a much weaker platform compared to FB and IG.

I think Twitter is garbage as a company but presents an excellent short term pump and dump opportunity. The musketeers are a different breed

[7sins]

Originally Posted by spurwar

Ahhh. Thanks for flagging. I do remember reading that and it makes sense. Can we assume if there is low float, then the impact of the S1 will be nominal? Just trying to see if there is a way to better evaluate risk and pricing when it comes to warrants as this is all new to me (and I am definitely intrigued after the run we have had with SEAT and SST!).

That is the current dichotomy. Due to the very high redemption post de-spac, ~98%, the current float is only 700k shares. Once the S1 is effective and the warrants are redeemable that is 25M shares. See table below from S1, total actual float is 106M shares. When the shares unlock, the ultimate question is do the original holders sell as pretty absurd gains. Foley and management committed to their backstop but I would bet they take their 300%+ gains over their word any day of the week. Same for Cannae. This is why the warrants are pricing in the discount currently today. Think of it as a futures market. The futures market essentially is saying with this share unlock they anticipate the value of the stock to really be near $15.

I think the latter, quite frankly, is absurd. You have a $1B+ revenue company growing at 43% CAGR and significantly cashflow positive AND lets not forget won Microsoft's advertising company of the year last year. Thus the fundamentals here are strong for future growth. If the price holds into the S1 being effective, you will see the warrants gap closer to intrinsic value. Additionally, the longer the sp stabilizes or gradually rises, the warrants will also move higher. Hence why the sp was down 2% and the warrants were positive 26% today. At $15 you are trading at a P/E of 3, which is attractively valued.

Post unlock I do anticipate the selling pressure will move the stock down as shareholders unload. I think the more prominent point I am trying to make, albeit a long winded one, this is not some ridiculous gamma/short squeeze hype stock that looses money and terrible financials. Yes CTB as 700%+ is absurd, yes short interest at 400% makes zero sense, yes 700k float is incredibly small. All of that, small retail investors, will chase until shares unlock and they will be gone. So you have an event in the future, that I believe will be a mass exodus but not based on fundamentals but that "gamma squeeze to the moon" trade will be over. Then you will have a tremendous buying opportunity again. That being said, I don't think this train has left the station, I suspect further upside over the next few weeks. Remember, don't be greedy, always always trim on the way up, warrants at $3.35 represent massive gains from where we have been buying. This was the same exact opinion I provided on BBIG and urged people to trim near $10 and we started buying near $3, now it trades at $2.90. At the very least, take out your initial investment and play with house money.There are many stocks on sale now, trim those gains and rotate into dislocations.

[scarlet knight]

I’m hiding out in health care, insurance, utilities stocks. Holding Fang minus NFLX. Don’t want big cap gains tax.

[chsu74]

Originally Posted by CoveWatch

Hey everyone, got an interesting play to share especially on the heels of some recent successful Spac mergers of quality companies.

Trebia Acq. Corp is taking System1, a customer acquisition marketing platform, public at a $1.4b EV, announced earlier this year. What is unique in this deal than any other spac deal is that Foley's other company, Cannae, will provide a $200m backstop against any potential redemptions with Bofa essentially backstopping the rest. Shows some confidence when the sponsors are willing to pick up any shares that get redeemed at merger.

While the backstop is nice, lets get to the meat of why I like this deal. System1 has raised guidance on current year revenue twice already (9/23/2021 and recently 11/05/2021 at their preliminary q3 er) and while the raises are minimal, its always nice to see confirmed growth. Additionally, unlike many other deals today, they are EBITDA positive and actually make money! Here is their latest updated investor deck.
https://s27.q4cdn.com/320020032/file...ion_vFinal.pdf

At $805m in revenue this year and EBITDA of $111m, we're looking at a multiple of 1.75x P/S to EV or 12.6x current year EBITDA. Top this off with a company thats shown consistent 30-35% growth in previous years in both and projecting to continue, seems like a very good deal to me.

Here is their latest analyst day transcript, a good read to get a feel of the company and its people.
https://sec.report/Document/0001193125-21-323321/

Would love some feedback, but I'm currently in the warrants and been adding daily and plan to continue adding. Merger is planned for q4 of this year and original proxy for merger was submitted 9/16 with what I assume to be an amended s-4 submitted earlier this month.

I want to get a shout out here. What a refreshing change to a dreary start of the year.

Many thanks again and again!

[huncho]

Originally Posted by chsu74

I want to get a shout out here. What a refreshing change to a dreary start of the year.

Many thanks again and again!

yup, seconded

[CoveWatch]

Originally Posted by chsu74

I want to get a shout out here. What a refreshing change to a dreary start of the year.

Many thanks again and again!

Originally Posted by huncho

yup, seconded

My pleasure gents! Happy that we're making some nice coin here, especially during this brutal week. Will be interesting to see where we go from here with the stock garnering attention for a potential squeeze before the S1 hits (which will also be another important catalyst as 7sins has outlined nicely prior).

[huncho]

Originally Posted by CoveWatch

My pleasure gents! Happy that we're making some nice coin here, especially during this brutal week. Will be interesting to see where we go from here with the stock garnering attention for a potential squeeze before the S1 hits (which will also be another important catalyst as 7sins has outlined nicely prior).

we have about 2 weeks until the S1 hits right?

[CoveWatch]

Originally Posted by huncho

we have about 2 weeks until the S1 hits right?

No, we don't know exactly when it will be filed into effect. I hear the SEC is really backed as well so there's a whole lot of other despacs who couldn't get their S1 filed.

[spurwar]

7sins - appreciate the great insight and education, as always! I trimmed a little on Thursday but missed some of the action on Friday as I was traveling. Looks like it will be an eventful week with all the buzz around this stock.

CoveWatch - thanks for flagging this early on. Definitely a shining star that is helping offset some of my losses this year.

[chsu74]

Originally Posted by CoveWatch

No, we don't know exactly when it will be filed into effect. I hear the SEC is really backed as well so there's a whole lot of other despacs who couldn't get their S1 filed.

There is a new SEC proposal which will tighten regulations but it will take another 2 months to go into effect.

https://www.sec.gov/news/press-release/2022-56

I found this on ST(I think.) Managed to save the photo but forgot to save the thread of poster screenshot so don’t know what ticker. Can no longer find the thread again. Point is that it can happen anytime. Manage your risk accordingly folks.

[chsu74]

I ran a document comparison between the two amended S1A filed last Friday and this Friday. Would love anyone who reads a lot of these documents to comment.

Link below.
https://drive.google.com/file/d/1RnJ...ew?usp=sharing

Blue highlighted is "inserted." Red is "deleted." Salmon is "replaced." Looks like there were some changes for sure.

Edit: I think this PDF file only shows replaced(salmon highlight) in read-only. The file opened in adobe acrobat shows the inserted and deleted also...

[7sins]

Originally Posted by chsu74

There is a new SEC proposal which will tighten regulations but it will take another 2 months to go into effect.

https://www.sec.gov/news/press-release/2022-56

I found this on ST(I think.) Managed to save the photo but forgot to save the thread of poster screenshot so don’t know what ticker. Can no longer find the thread again. Point is that it can happen anytime. Manage your risk accordingly folks.

Thanks for sharing Chao, I think their is a wide variance and dispersion of days between S1 and effectiveness. IE note blow on SEAT, S1 was 11-05 and yet it didn't effect until 12/30. I am not sure what the variables are that causes a quicker or long effectiveness.

[chsu74]

Originally Posted by 7sins

Thanks for sharing Chao, I think their is a wide variance and dispersion of days between S1 and effectiveness. IE note blow on SEAT, S1 was 11-05 and yet it didn't effect until 12/30. I am not sure what the variables are that causes a quicker or long effectiveness.

Sweet! So FTD(failure to deliver) is probable.

[CoveWatch]

Originally Posted by chsu74

There is a new SEC proposal which will tighten regulations but it will take another 2 months to go into effect.

https://www.sec.gov/news/press-release/2022-56

I found this on ST(I think.) Managed to save the photo but forgot to save the thread of poster screenshot so don’t know what ticker. Can no longer find the thread again. Point is that it can happen anytime. Manage your risk accordingly folks.

I have heard that filings have been delayed weeks or longer and while a part of that is that the SEC has been backed up for a while, its also because they've just been asking for more details and disclosures across the board. Anything from investment bank incentives, dilutive impacts to shareholders, projections and sponsor economics are now being emphasized with more detailed questions.

With all that said, that's usually for the s-1 proxy being initially filed for merger. This current s-1 is different and can be turned around pretty quickly. So I was wrong about this taking weeks to months longer... It actually can come any day from what I'm hearing. Would make sense why MM's have been doubling and tripling down on artificial shares because maybe they know its coming sooner than we all expected. Seems to be another eventful week coming.

Originally Posted by chsu74

I ran a document comparison between the two amended S1A filed last Friday and this Friday. Would love anyone who reads a lot of these documents to comment.

Link below.
https://drive.google.com/file/d/1RnJ...ew?usp=sharing

Blue highlighted is "inserted." Red is "deleted." Salmon is "replaced." Looks like there were some changes for sure.

Edit: I think this PDF file only shows replaced(salmon highlight) in read-only. The file opened in adobe acrobat shows the inserted and deleted also...

I am no expert in reading these filings but have been told that this recent amended s-1 had minimal remaining comments from the SEC so obviously that helps their turnaround time.

[chsu74]

Originally Posted by CoveWatch

I have heard that filings have been delayed weeks or longer and while a part of that is that the SEC has been backed up for a while, its also because they've just been asking for more details and disclosures across the board. Anything from investment bank incentives, dilutive impacts to shareholders, projections and sponsor economics are now being emphasized with more detailed questions.

With all that said, that's usually for the s-1 proxy being initially filed for merger. This current s-1 is different and can be turned around pretty quickly. So I was wrong about this taking weeks to months longer... It actually can come any day from what I'm hearing. Would make sense why MM's have been doubling and tripling down on artificial shares because maybe they know its coming sooner than we all expected. Seems to be another eventful week coming.



I am no expert in reading these filings but have been told that this recent amended s-1 had minimal remaining comments from the SEC so obviously that helps their turnaround time.

I was thinking along the same lines. It is essentially the 3rd draft so questions and comments should be down to a minimal now. Either way, this appears to be a profitable company showing growth at low valuations.

[330ci]

Elon denied his board position, anyone thinking he's going for a corporate takeover?

[vipereaper30]

BCRX followers had a rough day on Friday with a huge drop for the enrollment pause in 9930 trials. Overreaction IMO pending additional information from the company. At this rate there's no value at all being attributed to 9930 and it's now at a discount with little to no expected growth in Orladeyo and any other pipeline dev.

Still up on my position but it hurts a bit with the size. Adding here.

[Xelorpepsi]

Originally Posted by 330ci

Elon denied his board position, anyone thinking he's going for a corporate takeover?

Suspect the NED role came with too many strings attached and he would have lost his ability to speak freely on the platform.

[macrowatch]

Originally Posted by 330ci

Elon denied his board position, anyone thinking he's going for a corporate takeover?

Reverse merger to bring Neural Link public? Heck yeah.

Also, I'm sure SEC breathing down the neck is like an ant starting to annoy the elephant.

[acebelt]

Originally Posted by macrowatch

Reverse merger to bring Neural Link public? Heck yeah.

Also, I'm sure SEC breathing down the neck is like an ant starting to annoy the elephant.

Looks like the corporate takeover has started with a cash offer of $43 billion. Wonder how much Tesla he'll need to sell if this goes through.

https://www.sec.gov/Archives/edgar/d...8d1_sc13da.htm

[superdog]

not sure if this is an appropriate post in this particular thread.

however, I am in the process of rebalancing. I realize that folks say you cannot time the market. I agree with that. And I do ultimately have plenty of time.

but I do not have a lot of faith in the Fed, or the geopolitical politics and much else. I do see a massive drop coming.

I said this 6 months ago and held steady. I do not regret it, but I lost 12% in my investment portfolio. thanks goodness I have kept my real estate. Not thrilled about the losses. but again, I do not regret it. I did what I thought was right at the time.

anyway, based on everything I see I am rebalancing pretty significantly and pulled a good amount of cash out. going to stay close to it all and when things seem less "intense" I will get back in.

truly, in my mind, not trying to time the market. simply trying to preserve capital. when things do finally turn for the better, which I do not think will be soon, I will be ready to go. and I think starting with X is much better than starting with X minus the big losses I believe are imminent.

I say it all the time. I do not need all the money. I am not trying to get rich from the markets. trying to not get poor either.

[beshannon]

Originally Posted by superdog

not sure if this is an appropriate post in this particular thread.

however, I am in the process of rebalancing. I realize that folks say you cannot time the market. I agree with that. And I do ultimately have plenty of time.

but I do not have a lot of faith in the Fed, or the geopolitical politics and much else. I do see a massive drop coming.

I said this 6 months ago and held steady. I do not regret it, but I lost 12% in my investment portfolio. thanks goodness I have kept my real estate. Not thrilled about the losses. but again, I do not regret it. I did what I thought was right at the time.

anyway, based on everything I see I am rebalancing pretty significantly and pulled a good amount of cash out. going to stay close to it all and when things seem less "intense" I will get back in.

truly, in my mind, not trying to time the market. simply trying to preserve capital. when things do finally turn for the better, which I do not think will be soon, I will be ready to go. and I think starting with X is much better than starting with X minus the big losses I believe are imminent.

I say it all the time. I do not need all the money. I am not trying to get rich from the markets. trying to not get poor either.

Rebalancing is always prudent. Taking profits is always wise.

You see a "massive drop" coming? Not sure I agree.

You are down 12% but up how much in the last three to five years? There are always corrections and repricing which is what is happening now. Personally I would be far more afraid of real estate values than equity values based on the bidding wars for homes.

Utility stocks are doing well as they always do in this environment, along with financials and staples.

[superdog]

Originally Posted by beshannon

Rebalancing is always prudent. Taking profits is always wise.

You see a "massive drop" coming? Not sure I agree.

You are down 12% but up how much in the last three to five years? There are always corrections and repricing which is what is happening now. Personally I would be far more afraid of real estate values than equity values based on the bidding wars for homes.

Utility stocks are doing well as they always do in this environment, along with financials and staples.

for what it is worth, I hope you are right, and I am wrong. I am okay leaving some loot on the table. I am not okay with losing significantly more.

between 401k, IRA and investment accounts, I am still about 50% in. I have simply reduced my equity holdings by getting out of much of my nasdaq stocks. not selling Apple or MSFT. I just cant see them losing long term. buy things like PayPal, I am dumping and taking the tax harvesting opportunity.

of course no one knows what is going to happen. however, I tend to agree with Burry on this one. of course, he is not the only one singing this song.

then again, Goldman is saying a recession is 3 years out. I personally think we are currently living in the biggest bubble we have ever seen. and I think that everything right now is just way overvalued.

eventually there will be a straw that breaks the camels back.

housing I do not worry about. for whatever reason I just feel more comfortable with it. and people will always need a place to live. I also own them outright, 2 rentals and my home....with a relatively small mortgage on vacation home. they have all appreciated by circa 25% , so if they drop, it really does not bother me much.

more than anything, it is about risk tolerance. at this stage, I dont have much. I might regret taking some out, but I dont think that I will. whereas if I did not take it out, and it drops, I most definitely would have.

time I suppose will tell.

oh, and up quite a bit the last 3 years. BUT, and this is a big but...I sold my business 20 months ago. so the losses I have seen are way larger than the gains I made. then again, I am still "up", so I am not complaining one bit. the 12% is based on the "high water mark" which I do realize is not necessarily a fair way to look at it.

[brandrea]

Originally Posted by superdog

for what it is worth, I hope you are right, and I am wrong. I am okay leaving some loot on the table. I am not okay with losing significantly more.

between 401k, IRA and investment accounts, I am still about 50% in. I have simply reduced my equity holdings by getting out of much of my nasdaq stocks. not selling Apple or MSFT. I just cant see them losing long term. buy things like PayPal, I am dumping and taking the tax harvesting opportunity.

of course no one knows what is going to happen. however, I tend to agree with Burry on this one. of course, he is not the only one singing this song.

then again, Goldman is saying a recession is 3 years out. I personally think we are currently living in the biggest bubble we have ever seen. and I think that everything right now is just way overvalued.

eventually there will be a straw that breaks the camels back.

housing I do not worry about. for whatever reason I just feel more comfortable with it. and people will always need a place to live. I also own them outright, 2 rentals and my home....with a relatively small mortgage on vacation home. they have all appreciated by circa 25% , so if they drop, it really does not bother me much.

more than anything, it is about risk tolerance. at this stage, I dont have much. I might regret taking some out, but I dont think that I will. whereas if I did not take it out, and it drops, I most definitely would have.

time I suppose will tell.

oh, and up quite a bit the last 3 years. BUT, and this is a big but...I sold my business 20 months ago. so the losses I have seen are way larger than the gains I made. then again, I am still "up", so I am not complaining one bit. the 12% is based on the "high water mark" which I do realize is not necessarily a fair way to look at it.

Nothing wrong with taking profits

I continue to buy and hold strong dividend growth paying stocks. I’ve accumulated positions over a 34 year span and have no intentions of selling any of them unless: 1. they become more than 5% of my portfolio, in which case I rebalance, or 2. if the fundamentals in the companies change.

The concept is simple, low risk and has been very rewarding. I own some stocks that are now yielding upwards of 20% based on the cost base. They can literally go to zero and they wouldn’t owe me anything. That may not be the correct way to look at it, but that does help me sleep at night.

Is a recession coming? Yes. Will it be followed by a bull market? Probably.

Im a big believer in you have to keep your money working. I agree with the principles of capital preservation, but IM very HO a properly constructed portfolio will withstand any economic conditions

[m j b]

I'm with Seth on this.

It's hard to put a value on the ability to sleep at night, but for me, it's worth a lot. I'm trying to position myself for a new entry point. Brian is able to sleep because he has a different perspective on it, and I'm happy for him that it works.

I'm a lot more comfortable missing out on a 50% rise than I am absorbing a 50% loss.

[brandrea]

Originally Posted by m j b

I'm with Seth on this.

It's hard to put a value on the ability to sleep at night, but for me, it's worth a lot. I'm trying to position myself for a new entry point. Brian is able to sleep because he has a different perspective on it, and I'm happy for him that it works.

I'm a lot more comfortable missing out on a 50% rise than I am absorbing a 50% loss.

Michael, it’s not a loss if you don’t sell

In all seriousness, you can have it both ways. You can build a portfolio with companies that will ride out these uncertainties and let you earn dividends while sleeping at night.

I’m not (never have) been a trader looking to buy low and sell high. IMHO unless you’re an expert (and plenty of those are consistently wrong) it’s a mugs game

Again, no right or wrong and if parking your money in cash is where you’re at, I respect that