Lots to discuss this week, mostly because several Real Money Portfolio companies reported earnings… and because I added money to two positions this week, and brought a new company into the portfolio. Enjoy!
Shopify (SHOP) had reasonable earnings when they came out, but “reasonable” isn’t enough for a high-growth momentum stock that’s trading at almost 20X sales… and the company failed to offer “upside” guidance for the first time, so there was no future growth upgrade to shock investors into buying. At the same time, they filed a shelf registration to offer more shares (though they may not sell them immediately, or at all — that’s what a “shelf” means, they have the offering on the shelf if they need to use it), and that was enough to drive the stock down sharply, on top of the drop that the shares saw over the past week as pretty much all the high-growth tech stocks got softer in the wake of the Facebook fright.
So the shares are down close to 20% from their highs now… though the fact that this kind of big move has happened several times before means that the volatility quotient stop loss at TradeStops (VQ%) allows for those typical moves — SHOP’s VX% stop loss is about 35%, which puts it down around $112.
What’s most important, I think