R59- Not agreeing with others isn't being
arrogant ! Here is what you wrote... "you were arrogantly negative on the stock earlier this year at much lower prices and we know how that turned out .... others warned you the company was very conservative in giving guidance. You were trying to short it at much lower prices, posting that it was grossly overvalued. Remember ? I thought you were being a bit arrogantly disrespectful of others views back then."
Re, I just don't get your view. I mean just because I was negative on the stock on the way up from $10 to $35, while others on the board "warned" me the company was being conservative with their guidance, doesn't make me arrogant or disrespectful. Fact is, after the company gave upped guidance of $.95 for the Mar qtr, I noted that almost the entire raise was for retiring the perferreds and lowering the interest rate on their debt. There was no concrete reason for me to believe anything about greatly improved earnings going forward at that point.
In my view, while the stock was going up from $10 to $35, it wasn't worth more than $10, and there was no reason in my mind to buy the stock. Yes I wanted to short the stock around $20 on the way up, and glad I didn't ! However in my view, while the stock was skyrocketing, it was very irrational buying after around $15. That view was in fact proven to be right, as despite raised guidance by 100% to $1.95 on the blowout June qtr report, the stock tanked to $17 !
It wasn't until the June qtr raise to $1.95 that I started to give the stock a value anywhere near the then current stock price. I figured at the time that the stock was worth around $35, and I started initially buying around $27, and bought again at $26. I then sold all shares at about break even, as I was starting to hear Fortnite demand was slowing, and it didn't help to see so much insider selling.
Then, as the stock tanked to the low $20s, I was looking at it again, figuring it was worth a shot at a 10 PE on 2018 EPS, despite the fad view, and possible fizzling in 2019. Then when the NPD report came out that pointed out August Sales of Consoles and Headphones were at record levels, despite the slight slowdown in Fortnite demand(as other games in the Battle Royale Genre were only adding to overall demand), I was a believer, and started buying. Then when I heard Jeff Vinik bought 886K shares around $20, and noted the new line of headphones for the PC market, I doubled down, while buying from $20.50 to $17.20.
Now Re, I have explained my thinking on HEAR from April till now. My price target remains in the $35 area for now. Hope that helps.
