Friday File: Metaverse Gainers, Quarterly Updates and more…
by Travis Johnson, Stock Gumshoe | November 12, 2021 6:00 pm
Earningspalooza brings us updates on RPRX, PAR, PUBM, TTD, BOMN, DFH, BRK-B, STEM, U, AMD and more...
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Source URL: https://www.stockgumshoe.com/2021/11/friday-file-metaverse-gainers-quarterly-updates-and-more/
Thanks for all the information.
For my part, I still believe in the potential of STEM.
I bought GLDG Gold mining in September to bet on gold.
I am also looking at MNDT for a small position.
I share the sentiments on STEM, given the projected growth in revenue and margin. A missing link that would be helpful is quantifying the TAM. All through the years, it is the TAM that has made many stick with TTD despite it’s lofty valuation. Jeff Green was fond of throwing out the trillion dollar number.
Hi Travis,
Thanks for yet another fascinating weekly update. Any idea what caused SDGR to dip further to ~$45?
Also, seeing that there are only 2 comments so far, I think I am not the only one who didn’t receive the email notification yesterday.
The email did not go out for me either.
Same — Friday File not received by email. I assumed that Stock Gumshoe was still feeling under the weather!
Sorry about that, looks like some of the emails did not go out over the past couple days. Presumably someone spilled coffee on the server.
We’ll resend them.
Hear Here!!
I totally agree, that many companies should ‘cut C-suite salaries dramatically to help cover the cost before they start complaining about margins.’ (!)
RAIL earnings are today.
Thanks for your good an timely information. I have to say that I feel that AMD valuation might look rational but I think that is because many holders of the stock do not believe they have a bright future, They follow Intel for many years and while they added some technology to the Intel universe – those times are gone. Several bright designers have left both Intel and AMD and while Intel might have something left to offer (foundry services for others) AMD has no such fallback. NVDA (provided the merger with ARM happens) is by far the biggest provider of chips for everything computing (even desktops and cloud servers) and communications. IMHO it is so dominant that it’s stock may go well beyond today’s valuation. STEM is interesting but Lemonade and Metromile where disappointments but I don’t think that you held the in high esteem (and rightfully so).
Hi Travis,
It might be a very simple question but since I am new to stock trading still and don’t have really anyone else to ask…
When you say you sell a portion of call options, does it mean you bought more then 1 call option? On the platform I am using (Questrade in Canada), I don’t see I could take partial profits (it’s either the whole 1 option or nothing). Sorry if it’s something really simple.
Yes, that means I owned more than one contract. Each standard contract represents 100 shares, and a contract can’t be broken into pieces.
The only way to take partial profits from a single call option contract would be to exercise the call, buy 100 shares at that strike price, then sell some
Of the shares — but that’s not often what people want to do (or can do, depending on their capital). You could also, depending on your broker, sell a covered call against your contract (if you have 1 June
Call option on Amazon at $3,000, for example, you could sell a June $3,800 call against that holding.). That’s tricky and introduces new risks, so I wouldn’t recommend it, but those are the two ways I know of to take partial profit from a single call option.
Thank you so much, Travis! That makes sense.
I got call option for DOCN for Feb 2012 and wondering if I should looking at exercising it now or wait closer to the date…
That’s your call, but if you intend to exercise and hold the shares there’s no advantage to exercising early. If I intend to exercise shares, I generally wait until the last minute. If you want to harvest your gains well before expiration, it’s generally better to sell than to exercise, because the options are typically going to still have a premium price to reflect that time to expiration, even if the premium shrinks over time and is smaller if the options are deep “in the money”… but in your case, if you want to take some profit from a single call option, you’d most likely have to exercise and then sell part of the position. You’d also then have more capital at risk in the name, since you’d have to put up the money to exercise the call, and if it’s a taxable account you’d also be incurring capital gains when selling, so it’s a personal decision — there’s no one obvious answer.
With options speculations, particularly those that have a relatively short time frame (less than a year), I almost always sell a portion of my position if it has gone up dramatically, booking a certain profit before an uncertain future, but I do often hold on to a meaningful chunk as well, in case the returns get dramatically higher. That’s exactly what I did with the DOCN call options I own — I sold enough so that I’ve definitely profited from the options even if my remaining stake goes to zero, and that’s what I can personally stomach. It all depends on your risk tolerance and how you deal with losses — those options have risen dramatically, and are still hugely levered for big gains if DOCN continues its wild ascent, so there’s a FOMO factor if it will drive you crazy to see those options double in value again after you sold… but we don’t know what will happen between now and February, it could only take one bad quarter or other piece of bad news to send DOCN down by 30% and, at the same time, send those options back to zero (or near zero). When people bet $400 on an options speculation and it rises in value to $4,000, they usually find that if it goes south and gets ugly and goes to zero, that feels like losing $4,000, not like losing $400.
Thanks Travis on the insight of you thinking. I definitely plan to exercise the options but probably sell a portion of them after I exercise them. I was just wondering when is the best time to sell (now or close to expiration date) 🙂 Thanks again!
Depends mostly on whether the stock goes up or down between now and expiration… the time premium built into the option price should shrink as the expiration gets closer, but the biggest impact will be if the underlying stock goes sharply higher (providing much more leverage and a happy dance) or lower (maybe driving your nice profitable position to zero). Good luck 🙂
Regarding Rivian — which brokerage service did you use to purchase the IPO? Does that involve costs that differ than purchasing an existing equity? Thanks
This was a directed share program from the company, which is when a company that’s going public sets aside some of the IPO shares to be directed to a particular group of people (usually their customers or employees — in this case, people who had pre-ordered cars from Rivian). It was run by Morgan Stanley, so although I didn’t have an account with them previously I did have to go through MS to express my interest and make the purchase.
Most brokers have something like a IPO center where you can see which pending IPOs they have a potential allocation to, and submit an expression of interest — they would then get back to you, usually the evening before the IPO, to offer you shares, on the off chance that you’re one of their favorite customers, and then you’d answer and formally commit to buy. It’s a fast process once it actually gets formalized, if they actually offer you a share allotment you’ll usually have to reply within a few hours to actually seal the deal. And, of course, not all brokers have allocated shares for all IPOs, and most brokers steer their IPO allocations to hedge funds and other very high-value clients, so I almost never get IPO shares even if I am interested (which I usually am not).
Thanks, Travis! Did you do a simple search to establish who was offering IPO shares? So, you opened an account with Morgan Stanley and were then able to simultaneously indicate that you were interested in acquiring IPO shares of Rivian? And, if you were not a recognized favored customer of MS, why did they permit you to buy IPO shares? And, did they call you to notify you that they were going to let you buy shares? Sorry for being so green on this and really appreciate your indulging my questions. I wanted in on this but dropped the ball because I did not know how to make it happen.
In this case, Rivian contacted me first to let me know I might get an allocation, and after I expressed interest they had Morgan Stanley follow up and give me the details for how to set up an account and formally request an allocation. That’s not how a typical IPO goes, for most IPOs I visit my broker’s IPO center, see if they’re offering up any IPO allocations, I express interest in the ones I think are appealing, and they proceed to ignore me because I’m not worth much to them.
Every case is different, some companies try hard to get their IPO distributed to smaller shareholders, including through brokerages like Robinhood, but usually on the rare occasion that I’m interested in an IPO they’re not interested in me 🙂
Downstreamn,
Remember, Travis ordered a CAR from Rivian, BEFORE the ipo. That’s what got his foot in the door.
With #roku price dropping, do you think it’s a good time to add to the position?
Did you get any reply’s regarding ROKU… Double down or sell some or all?
What is the difference between PubMatic and Magnite? Seems like you like to compare PUBM to TTD (because of its obvious return history) but isn’t MGNI the more comparable company? Thanks.