I was curious why the price had started the day down quite a bit.
Just a video has been posted so far, with the “full report” coming in about an hour.
If interested:
http://www.citronresearch.com/
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First UBNT now SHOP
is Left reading this board?
I can’t wait. I was wanting to buy more SHOP
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Bought at 106.50
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Me too Everett. I watched the video and thought it was the biggest load of crud ever. I couldn’t see any Muddy Waters type smoking gun just a diatribe. FWIW I thought Left comes over as a right sleaze ball.
A
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I am trying to decide on my strategy right now. My SHOP shares are long-term gains already…might sell a few shares and use those proceeds to buy some calls.
Some of my observations of prior Citron/Andrew Left attacks.
He has been correct a few times, particularly with Valeant.
With Wayfair, I think he will ultimately be proven right.
With NVDA, he missed considerably.
With UBNT, it seems that he has been off the mark.
With SHOP, after listening to the video, he seems to be grasping at straws with an unconventional business model. I anticipate that this one will turn out similarly to the UBNT attack, with relatively weak arguments…although Shopify does have a more stratospheric valuation and isn’t in the position Ubiquiti is of being ready, willing, and able to buy back shares.
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From Citron’s website:
Citron Exposes the Dark Side of Spotify – The FTC will Take Notice
Clearly they understand the company well…
Bear
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I noted that Spotify/Shopify error as well, Bear. I hope your team can take it a bit easy on us in a few weeks…from performances so far this year 50+ to 0 would almost have to be the expected score.
I did something that I normally wouldn’t do. I sold a portion of my SHOP shares. I had about a 21% position plus Jan 2019 $100 calls. I reduced my position to 12.9%. I don’t know what the stock will do in response to the short attack but I doubt it will go above the recent high before earnings. It may well go lower due to the short attack. If it drops significantly, I will probably buy back the shares that I sold. For now, I’m watching…
Chris
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I doubt it will go above the recent high before earnings.
Even if it just went TO the recent high you’d make over $1,000 on a 100 share purchase at the current price.
It may well go lower due to the short attack.
Why do you say that? I just ask because, with UBNT, I believe the low point after the short attack was the morning it was released.
Bear
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Why do you say that? I just ask because, with UBNT, I believe the low point after the short attack was the morning it was released.
I think UBNT was a very different situation. For UBNT, it is difficult to agree that it was overvalued. UBNT is more thinly traded and 70% of the shares (owned by Pera) were never going to be sold. UBNT was buying back shares while SHOP needs the cash to grow the business. We were able to quickly debunk the short attack on UBNT. I bought shares on the drop and bought Oct $55 calls as well. I then sold my shares and sold Oct $65 puts. So far that trade is working out well.
For SHOP it will be more difficult for us to debunk the allegations. The valuation is very high on a EV/sales basis so there is a lot of room for the stock to drop if there is fear. Cramer was talking about this this morning and he was almost advising people to consider selling and locking in the gains. A lot of people listen to Cramer.
I think SHOP is legit but I think the market may punish the stock in the coming few weeks. Therefore, I think the near-term downside is significant while the near-term upside is limited. I had a huge allocation (over 21% if you include my call options); after my sell today, I still have more than a 12% position. I want to see if it goes a lot lower. Watching and waiting for now…
Chris
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Like with UBNT-Citron I also bought more SHOP after immediately after viewing the weak Citron short video.
Cramer’s also spouting off on CNBC about it…
https://finance.yahoo.com/video/cramers-stop-trading-time-se…
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Bought a little at the market and set out a trot line for some more real cheap.
Please, everyone give as much exposure to Citron as you can.
Cheers
Qazulight
If the premise of the stock has not changed, and you are not a trader then hold or buy is the way to go. The shorts always go after high flyers–Netflix comes to mind as a consistent target over the years.
I had planned to buy more, now it is cheaper…sweet!
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Shopify was running ads on FaceBook saying it helps create 2700 millionaires a day?
Jesus.
This is the problem with owning a stock at 23x sales, any hint of bad news it gets punished.
Price matters.
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The volume is already around 10 million today and is holding up well. Maybe the big buyers are out there accumulating shares too. This is a long term, once in a life time, stock and Andrew Left too shall pass. Of course, if you have 20+% in your portfolio, it can get nerve wrecking. I am holding for now and waiting for the earnings; however, it tempting to add more given today’s action.
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Why do you say that? I just ask because, with UBNT, I believe the low point after the short attack was the morning it was released.
With BEAT the inter day low was three days after it was released although that day it closed higher than the day before. I would have done well waiting. 
Denny Schlesinger
Shhhhh. The AI is watching.
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Yeah, this is a very different situation from the UBNT attack. Also most of us already have really big positions in the company. I am just going to hold tight for now. If the stock gets back down into the low 90’s I will have to add as the opportunity will be too good. I don’t expect this one to bounce back as fast as UBNT did though.