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MINM -.86 to 3.62, anyone who shorted yesterday at around $10 has a 63% profit even after the 1% per day borrow fee .... but surely it was impossible to borrow shares. Even now IB has no shares available despite the astronomic borrow rate of 315% annualized.
GCT +1.58 to 11.30, I think it's a scam but am trading it anyway .... obviously just a very small <1% position. Way too speculative for anything more than that. If it stays volatile, then I'll be booking profits. Right now I'm bidding $10.05 and asking $11.45 .....
GCT +1.36 to 11.04, I'm trading it .... grabbed a few in the low $10's and already flipped some in the high $10's .... the volatility is great for trading and the short attack concern has been diminished since it already happened to little effect ! It's a likely scam but traders don't seem to care.
Wade - AAOI - the old bonds were also convertible and are being replaced, so aside from the lower conversion price there's little difference than before.
AAOI +.59 to 13.84, I was expecting about 2% to 3% dilution from new shares, but it's only a bit over 1%. On the other hand the lower conversion price means that will more quickly and significantly increase the fully diluted share count which occurs when the share price rises above the conversion price.
GCT (9.72) Q3 numbers are unbelievably good, LOL, EPS of $0.59 up 31% sequentially from $0.45 in Q2 on a 16% increase in revenue. They're flying on all cylinders. Probably a scam but might be worth trading since that short attack a few weeks ago had little effect.
MINM +6.74 to 7.65, issues statement regarding stock trading frenzy -
MANCHESTER, NH, Nov. 30, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire –Manchester based Minim Inc. issued the following statement regarding unusual trading in its common stock. Normally, the Company does not comment on market activity or rumors. However, Minim is not aware of any material, undisclosed information related to the Company that would account for the recent increase in the market price and increase in the level of trading volume of its shares.
Wade - AAOI - you should check the 10K and/or the 2024 Bond offering prospectus to determine what the conversion price and terms were ..... those are being eliminated so that component of the transaction will be anti-dilutive if the conversion price is below the current stock price.
Wade - AAOI - I don't see how this news can affect your core thesis that the company is going to have huge growth in 2024 with EPS of $1.33+. It seems like dilution of 2% or 3% max since one convertible is replacing another. However, on a technical basis the stock was due for a pullback, so maybe you can get back in at $13 or lower in the coming days ..... it seems to me that the news was simply a catalyst for day traders to take quick profits, hence the selloff.
Wade documented his sale of AAOI at $14.60 on his own board yesterday evening at 7:53pm in the after hours session -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173324338
AAOI -0.88 to 14.02, the bond offering terms are not final but will include some shares as a sweetener according to the announcement ..... actually the selloff is rather modest relative to recent gains. Now at $14 it's trading above where it was just 2 days ago.
PR -
Concurrently with the offering, we expect to enter into separate, privately negotiated transactions with certain holders of our 2024 notes to exchange or repurchase a portion of the outstanding 2024 notes for a combination of cash and shares of our common stock. Following the completion of the offering, we may engage in additional exchanges, or we may repurchase or induce conversions, of the 2024 notes. Holders of the 2024 notes that participate in any of these exchanges, repurchases or induced conversions may purchase or sell shares of our common stock in the open market to unwind any hedge positions they may have with respect to the 2024 notes or to hedge their exposure in connection with these transactions. These activities may adversely affect the trading price of our common stock and the Notes we are offering. Moreover, market activities by holders of the 2024 notes that participate in the concurrent exchanges or repurchases may impact the initial conversion price of the Notes we are offering.
Wade can totally change his mind at the drop of a hat ..... evidently yesterday's selloff in AAOI made him jittery.
MINM +6.33 to 7.34 on massive volume of 31M ..... maybe it's a new meme stock being pumped on Reddit ????
AAOI -1.44 to 13.46 after announcing a convertible bond offering -
SUGAR LAND, Texas, Nov. 30, 2023 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ: AAOI) (“AOI”) announced today that it intends to offer to sell, subject to market and other conditions, $80 million aggregate principal amount of Convertible Senior Notes due 2026 (the “Notes”) in an offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).
Final terms for the offering of the Notes will be determined at the time of pricing. The Notes will be our senior, unsecured obligations and will be equal in right of payment with our existing and future senior, unsecured indebtedness, senior in right of payment to our existing and future indebtedness that is expressly subordinated to the Notes and effectively subordinated to our existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Notes will be convertible at the option of holders of the Notes under certain specified circumstances, as set forth in the indenture governing the Notes. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate(s). Initially, the Notes will not be guaranteed, but the Notes will be fully and unconditionally guaranteed, on a senior, unsecured basis, by certain of our future domestic subsidiaries.
We intend to use the net proceeds from the offering to repurchase or exchange our existing 5.00% Convertible Senior Notes due 2024 (the “2024 notes”) in individual, privately negotiated transactions with existing holders thereof, as described below.
Concurrently with the offering, we expect to enter into separate, privately negotiated transactions with certain holders of our 2024 notes to exchange or repurchase a portion of the outstanding 2024 notes for a combination of cash and shares of our common stock. Following the completion of the offering, we may engage in additional exchanges, or we may repurchase or induce conversions, of the 2024 notes. Holders of the 2024 notes that participate in any of these exchanges, repurchases or induced conversions may purchase or sell shares of our common stock in the open market to unwind any hedge positions they may have with respect to the 2024 notes or to hedge their exposure in connection with these transactions. These activities may adversely affect the trading price of our common stock and the Notes we are offering. Moreover, market activities by holders of the 2024 notes that participate in the concurrent exchanges or repurchases may impact the initial conversion price of the Notes we are offering.
But the S&P500 is not the whole market. The Russell Microcap Index is actually DOWN 6% YTD. Yes, the S&P chart looks like a possible double top at around 4600, but there's no guarantee of that. It's a seasonally strong time of the year for stocks, Interest rates are falling, a FED rate cut within 6 months or sooner seems increasingly likely and while some stocks are near 52wk highs, there are plenty that are way off their highs and look undervalued. I like to focus on finding individual stocks that are undervalued, not on trying to time the market and waiting on the sidelines for an eventual correction.
I look forward to seeing some posts on tax loss candidates for a bounce in the new year. December should be a good month for picking up some of those bargains regardless of what the broader market does. jmho
Indexes YTD -
TKR % Change Cur Price Start Price
$NYFANG 86% 8265.6 4448.07
$NDX 46% 15987.6 10939.76
$COMP 36% 14258.49 10466.48
$RLG 35% 2923.02 2158.19
$SPX 19% 4550.58 3839.5
$DJT 11% 14816.54 13391.91
$DJI 7% 35430.42 33147.25
$MID 5% 2549.01 2430.38
$SPXEW 4% 5955.35 5739.53
$RLV 2% 1534.16 1497.12
$RUT 2% 1803.81 1761.25
$SML 1% 1168.05 1157.53
$IXBT 0% 0 0
$RUMIC -6% 635.15 678.57
$W5KMICRO-8% 11659.77 12683.47
$NBITR -9% 4084.23 4474.26
$BTK -9% 4811.17 5281.1
$NBI -9% 3817.41 4213.13
$DJU -11% 862.47 967.4
DRCT - I have no regrets whatsoever for taking a 200% gain in less than 3 weeks .... but I do regret that it was just a tiny position. Hindsight is perfect as usual. I should not have looked the gift horse in the mouth, ha !
DRCT - correcting my error - it slipped my mind that the warrants were redeemed not exercised as Larrybaz pointed out .... still gotta believe there's a capital raise coming .... but who knows for sure ?
DRCT - impossible to time the top so I have no regrets about selling my remaining shares at $10 yesterday .... and even though the filing yesterday was for exercised warrants it still represents new shares coming to market that could put downward pressure on the stock. It's looking toppy at around $12 and I won't be surprised if there's a correction coming .....
Crude Oil +1.50 to 77.91/bbl ahead of tomorrow's critical OPEC meeting .... but OPEC continues to lose clout amidst rising supplies from North and South America -
https://www.reuters.com/markets/commodities/opec-talks-continue-no-meeting-delay-currently-expected-sources-say-2023-11-29/
https://oilprice.com/Energy/Energy-General/South-Americas-Offshore-Oil-Boom-Will-Challenge-OPECs-Dominance.html
CPE, VTLE, CL
DRCT +1.62 to 11.94, any interest in shorting ? IB currently has 39k shares available at a borrow rate of 135%. Yes, an extremely high borrow rate, but that's still less than 3% per week and if you expect an imminent sharp correction in the stock it would be well worth borrowing .... of course the stock could continue to trend higher and cause your borrowing costs to rise accordingly. Ouch.
I'm staying on the sidelines and am not interested in shorting. Too risky for me even if the borrow rate was much lower.
UUU had a 1% per week borrow rate but fell 50% in less than 3 weeks, so was well worth borrowing !
GME +3.22 to 16.21, this market rally seems to be attracting meme traders once again !
AMC also up nicely today.
SSK - why are you 65% in cash ? Are you finding nothing to buy ? It's tax loss selling season and there are loads of single digit PE stocks available. Being that heavily in cash is market timing and usually backfires. Are you expecting a major market correction in the coming weeks or months ?
CHPT +.05 to 1.98, might be a speculative buy with the stock down 96% from its 2021 high of about $50. ChargePoint is the leader in EV charging stations with several 100,000 installed worldwide, but slower than expected acceptance of EV's along with a myriad of other problems have led to heavy cash burn and concerns about financial viability. At this point it's like a stock option that could go to zero in the event of bankruptcy or could be a multibagger if they can execute a turnaround. Tax loss selling is also weighing on the stock. I picked up a tiny position at around $2, but view it as highly speculative.
https://investors.chargepoint.com/overview/why-invest/default.aspx
DRCT - thanks, evidently the warrants expired and still had redemption value as per their terms. It's good news for the company and shareholders since instead of issuing new shares for $5.50, they can fetch a lot more on the open market if they act promptly. Less dilution.
Russell +33 to 1826, nice rally for the small caps ..... lots of green on my screen. With recession odds falling, maybe the small and microcaps will outperform in the coming months for a change. They've been big laggards in 2023.
DRCT - in any case it adds up to 3.5M shares to the float and some of those shares will be sold. Exercise price was mostly $5.50 I believe, so a nice cash infusion for the company. There was no incentive for warrant holders to exercise their warrants until a few days ago when the stock surged past $5.50.
Wade - AAOI, you're right, Q3 revenue was up 50% sequentially, but that's only because Q2 was very weak. Q3 revenue was up only 2% over Q4 2022 and 10% y/y.
Wade - AAOI - 40% gross margins are a long term goal ..... typically that would mean over a year from now. It's a goal, not guidance. Also the sharp deceleration of sequential growth in Q3 is concerning. Yes, terrific revenue growth in Q2, but lackluster in Q3 and lackluster guidance for Q4.
EPS guidance is just $0.01 midpoint for Q4. I highly doubt they'll post $1.33 for 2024. What EPS progression are you hoping for through the 4 quarters ? You think $0.20 already in Q1 after $0.01 in Q4 ???
Wade - AAOI reported a GAAP loss of (0.27) for Q3 and adj EPS of (0.05) which was exactly what analysts were estimating. Analyst estimates have been quite accurate for Q2 and Q3. For Q4 the company is guiding for just $65M in revenues, a 4% sequential increase, hardly exciting.
The $300M Microsoft revenue is over several years and will probably ramp up slowly. Maybe $10M in Q1, if that much.
The 40% GM guidance is for their CATV business by Q4 of 2024, not overall. Certainly good news but that business runs in cycles. Revenues go up and down.
Finally, SG&A keeps rising and may trend even higher in 2024, not to mention that they may want to do another capital raise. Their share count has roughly doubled in the past 7 years.
Analyst estimates for adj EPS of $0.50 for 2024 does seem conservative, but a lot depends on how quickly the Microsoft revenue ramps up.
I'd estimate they report adj EPS of just $0.10 for Q1 and $0.15 for Q2.
DRCT - thanks for the alert - I just sold my remaining 40% position at 10.00, but will be looking to buy back lower.
AAOI -.10 to 14.30, analysts raised 2024 EPS estimates to an average of $0.50 from $0.40 after the lackluster Q3 results .... so your $1.50+ is extremely optimistic.
2017 was a great earnings year for AAOI, but it was all downhill from there .... a small loss in 2018 and big losses in every year since then. They surprised in 2017 to the upside, but then a huge downside surprise in 2018.
DRCT - I just sold another 20% of my original position at 11.06 .... still have 40% left .... also put in a few GTC bids at $8 and lower ....
DRCT -1.92 to 10.67, halted for volatility .... it could be a wild ride today !
DRCT - I sold another 20% at $11.74 .... based on the heavy volume it looks like day traders are the biggest factor, playing the momentum, but that means the stock could plunge at any time when they decide to get out enmasse, causing a momentum reversal.
DRCT short covering is not a factor today because any covering is being fully offset by new short positions. That's why the borrow rate is 105% at IB and yet there are NO shares available. So there's no NET short covering going on. It's a momentum frenzy OR some investors have figured out that the numbers are for real and think the stock is worth $20+. Who knows for sure what's driving the stock ? In any case management would be wise to do a capital raise ASAP to pay down the debt.
DRCT +2.25 to 11.14, this stock is a momentum monster ! I'm still holding 80% of my original position, but regrettably it's just a tiny position .....
Congrats to Digitech on an impressive win and thanks to SSK for running the contest !
SAVE +.40 to 13.07, PUT premiums are through the roof on concerns the merger deal with Jetblue will be rejected and Spirit will have to file for bankruptcy .....
I just sold a few Jan $7.50 Puts for $1.42 .... cost basis on the stock is $6.08.
Here's an interesting article that concludes with probabilities for various outcomes and accordingly places fair value at $15.50 -
https://seekingalpha.com/article/4653193-spirit-airlines-if-merger-fails-whats-next
Happy Thanksgiving to All .....
This continues to be a great board with lots of savvy trading and investing ideas !
NVDA -14 to 485, selling off a bit despite a nice earnings beat and strong guidance - I picked up a few shares this morning and sold the March $500 calls for a cost basis of $450 on the stock .....
briefing -
NVIDIA beats by $0.65, beats on revs; guides JanQ revs above consensus; next waves of AI are starting to build (499.44 -4.65) :
Reports Q3 (Oct) earnings of $4.02 per share, excluding non-recurring items, $0.65 better than the FactSet Consensus of $3.37; revenues rose 205.5% year/year to $18.12 bln vs the $16.19 bln FactSet Consensus.
Data Center revs grew 279% yr/yr and 41% qtr/qtr to $14.51 bln. Strong sales of the NVIDIA HGX platform were driven by global demand for the training and inferencing of large language models, recommendation engines, and generative AI applications.
Gaming revs grew 81% yr/yr and 15% qtr/qtr to $2.86 bln. Strong year-on-year growth reflects higher sell-in to partners following normalization of channel inventory levels. Sequential growth reflects strong demand for our GeForce RTX 40 Series GPUs for back-to-school and the start of the holiday season.
Professional Visualization revs grew 108% yr/yr and 10% qtr/qtr to $416 mln. The year-on-year increase reflects higher sell-in to partners following normalization of channel inventory levels. The sequential increase was primarily due to stronger enterprise workstation demand and the ramp of notebook workstations based on the Ada Lovelace GPU architecture.
Automotive revs grew 4% yr/yr and 3% qtr/qtr to $261 mln. The year-on-year increase primarily reflects growth in sales of auto cockpit solutions and self-driving platforms. The sequential increase was driven by sales of self-driving platforms.
Co issues upside guidance for Q4 (Jan), sees Q4 revs of $20.0 bln, plus/minus 2%, implying $19.6-20.4 bln vs. $17.96 bln FactSet Consensus.
GAAP and non-GAAP gross margins are expected to be 74.5% and 75.5%, respectively, plus or minus 50 basis points.
Co added, "Large language model startups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build. Nations and regional CSPs are investing in AI clouds to serve local demand, enterprise software companies are adding AI copilots and assistants to their platforms, and enterprises are creating custom AI to automate the world's largest industries. NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off."