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- 🔔 Citron 'Root' around for another GameStop...
🔔 Citron 'Root' around for another GameStop...
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A quick look at markets...
Plenty of chatter about month/quarter & year end flows being the culprit - Bank Of America reported the largest flow into cash since April 2020...
averygrrl
Expecting the trends to return next week 👇
🔥 Hot and 🚫 Not
🔥 Root - He likes the stock: Citron's Andrew Left reappeared on Twitter yesterday to offer his latest idea. The GameStop saga might have put an end to his short-selling activism but he still pays attention to short interest...
'Probably one of the most heavily shorted stocks on the Nasdaq with a valuation above $1bn'
Probably? 🤐
...the real time short interest data on ROOT from short interest analytics firm S3 Partners last week shows that ROOT’s short interest has further increased to 12.2 million shares short with short interest as a % of float now between 44% and 79%.
ROOT is now the most highly shorted stock with a market cap above $1 billion in North America.
Great, but a high % short interest doesn't necessarily make it a good opportunity...
What else have we got? There's an interesting business model tucked away in here - Root want to disrupt the legacy insurance model with a mobile app to track their driving...
There's an app for that...
And then offer...
Sounds simple enough, right?
Back to Citron
Even the bears will admit, ROOT has great management that knows insurance and technology.
However, ROOT has done a poor job of telling their story to Wall Street.
There isn’t even an investor presentation on their website.
The good news is that this can easily be changed while ROOT has built the hard part – the technology.
Fortunately, Andrew is here to tell their story for them:
We believe ROOT is a misunderstood short. This is a disruptive tech company and investors have an opportunity to buy the stock at bargain prices vs. what the smartest tech investors in the world paid just five months ago.
He's transparently talking his book, the idea makes a lot of sense to me, definitely one I'll researching further...
Root has ticked a little higher in pre-market...
The insurance industry is definitely being targeted for disruption: Last week it was ARK & Tesla...
ARK estimates that Tesla could achieve better than average margins on insurance thanks to the highly detailed driving data it collects from customer vehicles.
If it were to sell 40% of vehicles with its own insurance offering by 2025, Tesla’s insurance revenues could approach $23 billion annually in our bear case.
This was widely derided (with good reason) and brings us to the next point...
🚫 Tesla's 'tech company' narrative looks fragile: The beginning of the end...?
OK, maybe not the 'end', but Tesla's bull-case has been constructed on a narrative... that Tesla's tech can disrupt everything and that's why we don't value them as a car company...
The self-driving tech has been in development for years, yet full self-driving mode remains frustratingly elusive...
Anti-Tesla videos have done the rounds for years, and this series is the latest example 👇
Elon Musk is aggressively going after the Tesla Self-Driving Scam video uploaded today and attempting to take it down everywhere.
I've split it into parts, so hopefully this stays up for this evening.
Special thanks to Pat for the copy
(12 minutes)
Part 1 of 5: pic.twitter.com/1CFypIZhF6— Financelot (@FinanceLancelot) March 26, 2021
Same arguments (updated), but my spidey-senses are tingling...
Hopefully this isn't the reason
Hear me out...
Everyone seems to be catching Tesla up on pretty much everything.
For how much longer can Elon keep over-promising and under-delivering?
It's clear that the chasing pack are closing the gap quickly and Tesla's position as manufacturing leader is also under threat. It was always going to happen one day.
Volkswagen are already hot on their heels and Tesla's struggle to scale up their manufacturing capacity is well documented...
RBC forecasts 170k $TSLA deliveries in Q1 (cut from +182k forecast), which would be +92% y/y but -6% q/q - Newsquawk
Inability to scale, competitors eroding the lead in tech and real-time data collection, and constant crypto distractions...?
I know none of these arguments are new.
Ultimately a narrative-driven stock will keep going until the narrative turns...
Is that time now?