Shorted again, prior to ER.
End is near.
Actual vested position.
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I’ve previously written several times about the absurdity of Beyond Meat’s valuations, and what the market thinks the company would do.
I’ve also been shorting BYND by selling naked calls on it for the past several months, and BYND has been extremely well behaved, going in an almost linear fashion downwards. I’ve answered some queries on shorting BYND, and have also put up some of my short options (the ones that haven’t expired then):
Yet, tonight, it all comes to a head.
BYND’s top shareholders and insider’s shares lock-up expires after 6mths post-IPO, and they are freely traded tonight.
Finally, after months of extremely, totally, mind-blowingly ridiculous over-valuation, BYND has now tanked to being just ridiculously over valued.
A 20% drop in a single day is no joke… but BYND has been dropping every day for the past 2 months prior to today’s 20% drop.
With it, I’ve locked in a very nice $20k USD gain on my direct short position, which was entered into just last Friday by selling some in-the-money calls:
Collecting a $20k USD profit over a literal 1 weekend, makes me a happy man.
Funny thing is, I got a little lucky here.
Thing is, BYND timed it’s earnings release to be yesterday (Monday) after trading hours. Exactly in time for the lock up expiry today (Tuesday)
Come on, that ain’t a coincidence is it, Ethan?!
I was expecting BYND to report stellar results. This was my comment a month ago, in response to a query in IN:
So on Monday night, there I was, sitting in front of my lappie, weighing the pros and cons of keeping my direct short position.
On the 1 hand, I knew the Monday’s results would be good, which could possibly be a huge downer for my short position.
On the other hand, Tuesday’s the lock up expiry, and I expected that to be a strong negative for the share price, since I’m pretty sure the something like 1000% gain in the share price since IPO was largely caused by a series of short squeezes due to liquidity issues.
It was honestly a tough call.
1 strong factor on each side. I could’ve locked in a $3k USD profit if I had covered on Monday, which would’ve still been a pretty good piece of shorting business to do for a single day.
In the end, since I am on holiday currently and hit with a bout of food poisoning, I decided to screw the thinking after 30mins of pondering, and go to bed early instead.
When in doubt, take a deep breath and do nothing right?
I really had no strength to do too much logical thinking anyway.
Food poisoning turned out to be a blessing in disguise cos I was paid an additional $17k USD or so for sleeping early and waiting just 1 more day.
Probably the other “lesson” to be gleaned here is that betting on “good results” to lead to an immediate share price rise is really quite simplistic, level 1 thinking.
Cos BYND really did report very good results.
Yet the share price tanked 20%. (I covered at opening bell when it tanked >20% even)
No kidding about the good results part:
Beat revenue estimates, beat earnings estimate, 1st ever profitable quarter, and even raised forward revenue guidance for full year.
I mean, I dunno how much better can the results get. Beating every metric you can think of.
Yet it tanked 20% tonight.
I wonder how many longs saw the results, and felt optimistic and happy, hoping for a reprieve from a 2 months constant drop… only to be hit in the gutter by a sucker punch.
Hell no, it’s not the bottom yet.
Too simplistic, level 1 thinking, my friends.
CEO Ethan has publicly reassured that he’s “not touching his shares after lock up expiry”
Yet, he also can’t say the same for employees or institutional shareholders.
Also, he and other insiders sold out in a secondary offering at USD 160 a few months ago, so that says a lot too.
I’ve shorted BYND by rolling over far OTM calls over the past 2-3 months, collecting about $60k USD in premiums.
I’ve previously put in 4 short estimates on BYND, all of which have hit, a 5th and final one, would also very likely hit within this week:
I’ve covered my direct shorts, and intend to let my short calls expire uneventfully.
Unless eating their ersatz meat starts curing cancer, it’s quite impossible for the calls to get exercised. (We’re talking about an almost 100% rise from the current share price for the calls to get exercised. Within the next 8 days!) (heh, yep. The impossible pun is intended)
I’ve looked at BYND again, and finally, the options thread is starting to look logical.
Which is bad news for me cos there’s nothing much for me to exploit anymore.
The calls that I want to sell are too cheap to be worth allocating capital into, and suddenly everyone has turned negative on the company.
Will the share price tank further?
It could jolly well drop another 50% from here!
Yet, I prefer not to squeeze water from rocks.
Leave the party early.
Leave something on the table. Always.
So as of now, I’m done with BYND. Not much meat in shorting from here.haha, get it?
A total profit of about $80k USD isn’t too shabby for 4 months.
Perhaps, the best way to illustrate the craziness and the hype, is this:
Credits to @metalcorn, who also anyway, candidly admitted that he stole this from someone’s twitter feed.
This image, is sooooooo not going to age well for Thomas George.
I dunno how can anybody predict, to such a level of certainty, what the share price would be like almost a decade from now. Might as well predict what are the lottery numbers next week.
Moment of silence please, for BYND.
On a different note, since I previously briefly wrote about FutureLand, I thought I’d close the loop by updating that as of today, I’ve taken profit fully on my position:
Having sold my last remaining 60,000 shares today at HKD 8.38, I currently hold no more shares.
And already, the markets are making me look stupid by continuing to assign every higher share prices for FutureLand right after I sold.
Ah well, can’t complain here.
With the latest successful investments and the conclusions of these positions, I think I’ve a shot at further increasing my ROI from the last update:
Ending 2019 with a ROI exceeding 40% would be really nice, so let’s see in 2 mths’ time.
BYND has been TTI's best short. Ever.
Shorted since close to USD240, 3 out of 4 short estimates have hit, with the 4th likely to hit tonight or sometime this week.
Heres a 5th and final short.
Company reported stellar quarterly results, and a profitable quarter for the 1st time ever.
Unfortunately, it just shows how crazy the hype was.
At EPS of 6cents, even if I generously assume company grows earnings at a 100% clip EVERY QUARTER, we'd still have EPS of 90cents for the full yr, giving BYND a valuation of PE 117x!
As Ive written before, this is the modern day tulip.
Many ppl have been burnt, more will be.
Covering my direct shorts tonight, but still shorting in the form of naked calls.
Lock up expiry starts tonight.
I dont believe the major SHs, many of which are funds who can only collect fees after locking in their profits, wont be inching to sell out.
The exit doors pretty crowded.
Crazy hyped up situations like these, are the best time to make big profits, whichever way it goes.
Kroger coming up with own line of meatless meat nonsense.
End is nigh.
Many morons wouldve lost a fortune by the time TTI's flurry of short estimates are hit.
The most vulgar of 4 letter words in investing, must surely be "HYPE".