Thank you captain obvious
None of us trust the numbers. If I did I’d have 100,000 shares already instead of a small trading position. So rather than take the first derivative of reality which would be hwebs trade let me explain how I see things.
The numbers may or may not be legitimate. I’m trying to suss that out, probably over the weekend.
If you look at the history here it does not trade a ton of volume. Today it has exchanged the entire share count already. That tells me trading is heavily concentrated in people who saw either the press release or the volume/price. What we are witnessing is mindless trading. I am one of those semi mindless traders. I wish I had a nickel for every stock that “wasn’t trading right” over some random time frame. If stocks traded “right” I’d be a lot poorer. Most of us here make money on seemingly illogical price action.
So far all I’ve done is a quick skim of some of the sec filing, and some googling around on the company and it’s principals. So far I don’t see enormous red flags like grossly disproportionate receivables relative to revenues. I haven’t yet found previous shenanigans from management as was hinted at with SURG. That may change by Monday.
Which leaves me with the question of what my best approach is. I can wait until those questions are answered however the opportunity cost is it could run in the meantime, and I’ll miss out. Let’s say I change my mind. What’s the real downside here over the next month or two? Unless they are suddenly uncovered as a fraud which hasn’t happened in a few years so far it should still trade somewhere above where it was before let’s say $3. That’s arbitrary but gives me about 15% downside. Alternatively it could be legit in which case I probably pull at least 150%. Another possibility is it isn’t legit, and I still make money because companies can run for years on sketchy numbers and still see share price gains. My downside here over a short time frame seems minimal relative to the upside so I want a position. This works out more often than not.
Also at this point any existing shareholder who wanted out is out so I shouldn’t have to worry about shares dripping out from long term holders going forward.
So I’ll see where it goes. The risk/reward looks promising, but they don’t always work out. I do wish it was as mindless as doing what hweb does which tbh would have been me at 3.80 if I bought at 3.20. I do take profits quickly, but that’s more risk management than an opinion on the merits of the trade.
