Paul Cerro's avatar
$37.2m follower assets
Acquirers don't pay bubble prices
$AMZN is acquiring $IRBT for a bit more than 1x sales and roughly -55% of its all-time high price. Meaning, if you are holding a speculative tech growth stock that you bought during the bubble times last year, the danger is very real that if the company gets acquired, it will be for a far lower price than the ATH price.

Important to keep in mind, these bubble prices will not come back for a long time, if ever.

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How do you think this fits into Amazon's electronics strategy? Are there any synergies here?
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Amazon acquiring iRobot
$AMZN is acquiring $IRBT for $61 a share in an all-cash deal. iRobot is the maker of the vacuum cleaner robot Roomba.
House-cleaning Alexa incoming? 🤖
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Mine is connected to Alexa and Google Home. "Start cleaning" and off he goes
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Erick Mokaya's avatar
$103.4m follower assets
The Transcript this week:
In our newsletter this week:

🛒 E-comm still growing rapidly
💰 Signs of slowing in private capital markets
🍽 People are eating less at home again


Yegor's avatar
$183.5m follower assets
$IRBT iRobot Q4 earnings and thoughts

EPS of -$1.05 misses by $0.11. 👎

Revenue of $455.4M (-16.4% Y/Y) misses by $8.37M. 👎

2022 Outlook for 12% to 18% Revenue Growth and 12% to 49% EPS Expansion 😑

Management states that issues will continue for another two quarters and I’m willing to sit this one out until I see some improvements.

If you add potential rate hikes into the equation then the fair value is even lower (potentially) then before.

I foreseen this potential issues before they even became so and I sold out of $IRBT when it reached my sell price.

The high reliance on other countries for supplies and failure to bring lawn mower was a few red flags I saw before and they introduced “robot as a service” or something along those lines was not gonna cut it. 🚩

If you are a shareholder I would recommend to check your thesis before blindly “buying the dip” for others I think there are many other better opportunities in my opinion 
I held $IRBT for a few years and I think sold around 2019 when it became clear that they weren't really going to/weren't able to execute on some of the optionality I thought I saw in the business. By then the robot vacuums were for sale in Bed Bath & Beyond and Target and inexpensive stores like that and people still weren't really buying them. I bought one for my mom one Xmas. It's cute and novel, but not a game-changer.
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Alberto Wallis's avatar
$23.3m follower assets
Upcoming Earnings Calendar (Feb 7th - 11th)
Hey guys!

A key week is ahead of us! Here's what I'm interested in:

  • $APPS - One of my largest holdings. I'd like an update on the progress of single-tap and the tests they were running with Meta $FB. I'm also interested in seeing how their device footprint is expanding after their latest deals.
  • $DIS - They've invested heavily on Marvel and Star Wars series for Disney+, so let's see if this translates to lower churn and higher growth.
  • $NET - Really interesting stock but the valuation seems too high. Let's see if there's a good opportunity to enter post-earnings.

Good luck!

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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THU:

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Yegor's avatar
$183.5m follower assets
We need short sellers!
Hey guys and gals,

I wanted to share why short sellers are awesome (and should not be feared) and how they are needed part of stock market ecosystem with some examples!

I wrote this for Commonstock

Lets start buy imaging that short sellers are like sharks, they can be scary to look at and there is a lot of media on how "dangerous" they are and yet if you really dig deeper sharks are NOT scary and they don't really hard humans.

Fun fact:

On average sharks are only responsible for an average of ten fatalities per year worldwide, compared to eight deaths every day in the United States from people texting while driving.

When there is too much of anything it is terrible for the system and there is imbalance that creates chaos.

"The loss of sharks has led to the decline in coral reefs, seagrass beds and the loss of commercial fisheries. By taking sharks out of the coral reef ecosystem, the larger predatory fish, such as groupers, increase in abundance and feed on the herbivores." - The Importance of Sharks

AKA CHAOS!

So, how is this related to short sellers?

When there is no one to "police" and take chance on companies that are out of wack, companies do insane things and at the end of the day regular folks like you and me (aka retail investors) are getting hurt because we are not as knowledgeable (for the most part) about what is going on in the companies.

Short sellers (the good kind) love to dig deep into companies and look to find something "bad" to show to the world and at the same time benefit from it via "selling the stock short". (example David Einhorn shorting Allied Capital and voicing his opinion while others kept pushing against it. Allied Capital Corp. )

These people (short sellers) are crazy enough and dedicated enough to take a chance and stand on their belief that company XYZ is doing something "bad" and illegal and that it should NOT be reward for its actions, but rather company and its stock should be punished!

When short sellers announce their thesis, we shouldn't be scared but rather we should be open minded and let our ego be put to the side and listen to what they have to say.

It doesn't mean they are right or wrong, they are expressing what they believe is and its for us to decide if we think they are correct or just trying to take a gamble.

I wanted to share three different examples to show case short sellers.

By calling them The Good, The Bad, and The Ugly

1) The Good

In November-December of 2020 I sold puts on $EHTH thinking it was a great looking company that is "almost" under-valued.

I thought price of $55 is a good starting position based on what company was projecting. Not too much debt, online platform, management has skin in the game, and at that time decent metrics.

After selling puts, I started digging deeper (stock was trading around $70) and I got stumbled on Muddy Waters short thesis report and how basically company is playing too much with the numbers to create a rosy picture.

After that report instead of keep on selling puts I started to listen and read on what management had to say and although I was not convinced that Muddy Waters is correct, from listening to earnings calls and digging deeper somethings didn't click to me and I decide to pass on the company.

As of today here is the chart of $EHTH

I'm just glad that I never executed a position.

2) The Bad

The bad is not so bad for me, but "The Bad" meaning for the short sellers.

In March-April of 2020 I started to buy into $IRBT.

I have one robot in my home and overall believed it was a wonderful purchase in mid $40 range.

My price target was around $80-90 mark and I did not believe that we would get that soon (maybe 3-5 years)

Then a "short squeeze" happened in January 2021


There wasn't any major short thesis that I was aware of but there was high % of shares shorted, which did not bother me.

I had my own LONG thesis in play and believed that at that time it way silly to short this particular company and I was happy to keep buying below $40 mark.

Short squeeze came out of the blue (for me) and I actually didn't know what was going on as there was no major news but decided that around $120 is a good price to get out as its was way over my $80-90 range and its been over a year so I would be locking in long term gains.

Stock went as high as $197.40!

3) The Ugly

$IRBT was BAD .... $GME & $TSLA is Ugly!

I did no participate in GameStop and Tesla frenzy but it does show that no matter how smart some short sellers can be, sometimes their ego just doesn't let go and that is why they are just parts in this machinery.

GAMESTOP


Low $18ish

High $400+ ish

TESLA


Low $30ish

High $1200+

Market is not always rational, but the rubber band always snaps back and we should learn from the past to take advantage of the future.

You can make your own judgement on short sellers, but just imagine what would happen if there was no sharks in the ecosystem and then think who would protect naive retailer investors. Sometimes protecting them by punishing them and sometimes it's other way around.
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Astute point- short selling is a tool- and while it can be misused like any other tool, the tool itself is not the danger, but the person using it — and to what end.
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Yegor's avatar
$183.5m follower assets
I’m still not convinced in $IRBT not until the chip shortage and supply chain gets easier and they actually come out with new products OR price goes below $50 mark

Third quarter 2021 results:

Revenue: US$440.7m (up 6.7% from 3Q 2020).

Net income: US$57.2m (down 39% from 3Q 2020).

Profit margin: 13% (down from 23% in 3Q 2020).
Alberto Wallis's avatar
$23.3m follower assets
Big Week Ahead! (Oct 25-29 Earnings Calendar)
Next week will probably be the most interesting week for the stock market this quarter. The largest companies in the world are all reporting and we'll get a lot of very valuable insights.

Here's what I'm interested in:
  • More context on the slowdown in ad spending from $FB $GOOG and $TWTR. Let's see if these companies are experiencing similar issues to the ones $SNAP mentioned yesterday.
  • Comments on the global supply chain issues from $KMB $MMM $GLW $LOGI and others.
  • A general update from $AMD $TDOC $SHOP and$AMZN.
  • Perspectives on the energy market from $XOM $CVX

Comment below what earnings call you're looking forward to!

Remember you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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