Fitbit Screws Over Shareholders

This is extremely commonplace for virtually all new IPOs. Legacy shareholders hit the escape hatch, almost immediately, thru gigantic share offerings, which not only hurt the morale of the after market shareholders, but also the supply and demand of the shares. The result, more often than not, is a massive move lower, as was the case in FEYE, SHAK, SPLK, GPRO, HABT–just to name a few.

Fitbit files for 7 mln share offering of common stock; also files for 14 mln share offering of common stock by selling stockholders

Another cool thing companies are doing for insiders, such as kick ass VCs like Fred Wilson, is permitting them early exit from lock up periods, with permission from the awesome underwriters, like Morgan Stanley.

Fitbit also announces that Morgan Stanley & Co. LLC, on behalf of the underwriters of Fitbit’s initial public offering in June 2015, at the request of Fitbit, has agreed to release the lock-up restrictions for Fitbit’s employees and consultants as of October 31, 2015 with respect to ~2.3 million shares, which represents up to 10% of the shares of Fitbit common stock, options, and restricted stock units held by such employees and consultants. The release will be effective on November 4, 2015.

The one overarching trend in all of this perfidy is they literally give zero fucks about their current shareholders. I’ve had very heated debates with upper management about their incessant dumping of stock on the makret, so soon after IPO. They all say the same shit. They blame the VCs or majority shareholders whose business model stipulates that they sell stock as soon as it comes public, because they primarily invest in private companies.

Lesson to be learned: don’t buy VC backed IPOs until 1-2 years after their debut on public exchanges. Think of all of the money you would’ve saved using this approach.

In light of the relaunch of the Peanut Gallery and the addition of 5 new bloggers to iBC’s ranks, and the fact that iBankCoin will turn 8 years old on November 12th, I thought it’d be suitable to post a ranking chart of the site’s most prolific bloggers since inception.

Good luck trying to crack the top 10.

This is a market primed for a short squeeze. Over the course of the past 3 month, short sellers have piled into the market, making themselves at home, eating from the fridge clad in their underwear.

Now it’s time to burn the fucking house down and squeeze all shorts until they disintegrate into thin air.

Let’s examine some potential movers, correlating Exodus‘ technical score with percentage of shares sold short.

I am going to break the list in two. The first list will consist of stocks that have performed well over the past month. The second list will be laggards, potential break outs to peruse for extreme monetary gain.

List #1
(stock, Exodus tech score, scale 1-5)

SBGI 3.93
ATHN 3.88
RH 3.83
CLVS 3.78
LPX 3.78
NHTC 3.78
CALL 3.73
FPRX 3.73
POST 3.73
FRO 3.68

List #2

HLF 3.88
HAWK 3.78
GES 3.73
DVAX 3.68
CALM 3.60
BDBD 3.58
ZSPH 3.53
BCRX 3.43
CNX 3.43
NTLS 3.43

The whole bear game just got tossed on its head. Their knight in burlap’d armor just played himself on national television, decrying the lack of necessity to pursue the Valeant story, pointing to the main stream media as a place to follow up on this ridiculous story. I hope Bill Ackman eats their lemons (no homo).

Stocks surged, despite a weaker commodity landscape.

Restaurant stocks took off, despite CMG attempting to murder people with their beef burritos.

This is what risk looks like. You may want it to look differently, appear out from nowhere like a flasher in a trench coat. But this is how it happens, deliberately, in your face, steam rolling until the last bear standing sits the fuck down.

I am not much for bragging these days. I’ve been a very humble Fly, walking about the internet alleyways alone, with just my pipe and my handy cro-bar. But I sense a shift coming, something foretold to you by the Option Addict several weeks ago.

We are going to flay all of the bears and then bury their bodies neck deep, near the beach, and leave them there for the high tide to sort out.

The drama continues.

“I got lucky.”

Short sellers are ridiculous people.

This is it. The beginning of the holiday season for stocks and risk is on, with small caps leading the charge. I took this opportunity to sell some of my TWTR position, mainly because it’s a giant piece of fucking horseshit. And, I added to the following: XON, CNC, JAZZ and FCX.

Tuesday of last week, TNA was flagged oversold inside Exodus. The results are in; and as always, they’re impressive.

After a holding period of 3 days, the stats get real colorful, pointing to total and complete annihilation of the bears by the 10th day.

I’m up 2.3% for the day, with gains led by CNC, JAZZ and SHAK. At first I was hesitant, looking at the market hem and haw between gains and losses. But now I am convinced: bears are getting tossed the fuck out from the ring and into the pits of hell, where horned goats and transvestites will stab them with their penis’ and take away all of their money.

In a year that is making fools of all high profile money managers, I find no reason to believe why this latest call out of Dan Loeb won’t come back to throw eggs all over his face.

“The environment for short selling is also attractive and we have more single short names than long positions in our book today,” Loeb wrote in the letter dated Oct. 30.
“We have reduced our net exposure by nearly a third through sales and new shorts over the past few months while maintaining significant positions in our highest conviction, event-rich names,” he wrote, without identifying the new positions.
He said that the fund’s biggest winners for the third quarter included Kraft Heinz and eBay, plus an unnamed position called “short A.” The biggest losers during the quarter include SunEdison, Dow Chemical Co., Amgen Inc. and Yum! Brands.

Einhorn, Icahn and Ackman have been marginalized this year, without question. Dan Loeb’s Third Point had a solid October, up 4.7%, following a horrific summer where his fund lost 8.9%. Let’s see if his latest call to be net short stocks, heading into the final two months of the year, pays off.

I’m such a dired pessimist. If it wasn’t for the fact that I’m also a fatalist, essentially not really giving a shit, I would’ve sold my stocks and waited for the market to crater.

The Option Addict said this would happen and it looks like it might be starting to get colorful around here.

During the iBC Conference, he told us to look out for the smaller cap names starting to make a move in this rally.

Look at the medicine man stocks today.

I happen to be long the space in decent size, with positions in JAZZ, NK, CNC, ICPT, GILD, XON and SGEN. Shit, I hadn’t realized until now how much of a medicine man fan I truly am.

Shares of SHAK are exploding higher on news that the pole smokers who make burritos at CMG are poisoning people. The American burrito eater shall be converted to a hammed burger face shoveler. It has been written and it shall be so.

SHAK is one of my largest positions.

Someone said they “loved Citron’s moxy” for posting scandalous shit about Valeant; then I punched him in the face.

I love a good bar fight, especially ones when stools come into play and heads get cracked open. But this piling on by Citron, regarding VRX, is text book absurdity.

Day after day, those little greedy fuckers hop onto Bloomberg teevee to discuss VRX. They taunt Bill Ackman with their tweets. And now, after all the free press, analyst downgrades, public humiliation of one of America’s most successful money managers, they issue another report on VRX.

Don’t give me this last word crap, regarding how awful a company VRX is and how you’re simply looking out for the little guy–not to get burned.

You know, the ancient greeks wrote fables about people like you, little greedy fuckers who got their hands stuck in the dike.

I see it now: VRX surges and cuts the arms and legs off from all of your little followers, the last guys into the fray. You know, the people you got liquid on when you covered your short.

I sense Ackman’s revenge is near, the sort of vengeance that inspired whole chapters in the holy bible.

CMG is down around 5% this morning, after news that the meat they sell on the west coast is fucking poisonous.

After being notified by health department officials in the Seattle (Wash.) and Portland, Ore. areas that they were investigating approximately 20 cases of E. coli, including people who ate at six of our restaurants in those areas, we immediately closed all of our restaurants in the area out of an abundance of caution,” Chipotle said in an emailed statement.
The company said the vast majority of its stores in the area had reported no problems. “We offer our deepest sympathies to those that have been affected by this situation.”
It is the third outbreak of food contamination at Chipotle restaurants since August. Those earlier cases involved salmonella and the highly infectious virus norovirus.

Dollars to donuts says the ecoli emanated from the ground beef, because it’s not grass fed. Cows can’t process corn, genetically modified or not. When we were kids, all of the beef was grass fed. This isn’t some hipster movement, based off some wacky idea. This is science. Eat grass fed beef; avoid being poisoned to death by ecoli.