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Kuppy

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27 Jan, 9 tweets, 3 min read

https://twitter.com/hkuppy/status/1352664776141381639

1) This $GME trade has been obvious and I’ve been all over it for weeks. Barring something unexpected, we have an insanity squeeze tomorrow. Fun stuff!! I have no right-tail exposure as I already banked massive gains. That was the appetizer...

https://twitter.com/hkuppy/status/1352664776141381639

2) If I’m right about the insanity squeeze, all the funds who are short $GME and similar stuff, blow up and have to puke their longs. Remember, 120/80 has been a massive inflow machine. Now these levered funds are on the ropes. It’s a “quant quake.”It will be sudden and violent..

3) The higher $GME goes, the more it will pressure the quants. However, when all the equity is chewed through, someone has to defuse these neutron bombs. I suspect there’s a price on $GME where the prime brokers will step in...

4) As far as I have heard, the 2 big boys haven’t covered a single share of $GME yet. ~25-35m are short on just those 2 books. What happens when the prime has to cover in a fast market with every dealer short Gamma??

5) This will be reflexive. Primes liquidating clients, setting off short Gamma squeezes, pressuring other clients. Remember, the whole NYC 120/80 crowd has roughly the same book and a fukton of leverage...

6) Not saying this will definitely play out this way. Sometimes insanity squeezes fizzle out, but this sure feels like the Northern Corner. Back then, there were no Quant funds. Just an insanity squeeze where traders got caught with massive losses and sold what they could...

7) When traders went bust on their shorts, the brokers ate the losses and failed too. It ended in a flash crash as every long position got liquidated. Could it repeat??

8) On Monday I bought a pile of VIX. We had a small flash crash that fizzled. I booked a small gain on news of the bailout. Today on close, I lifted a MUCH LARGER position long VIX. The higher $GME goes, the more reflexive it gets and the likely I get paid..

9) Everyone I know is obscenely long crap stocks for a short squeeze. Be careful what you wish for. The higher they go, the more likely it blows up every fund’s long book. Could get wild out there. Don’t overstay your welcome. When the squeeze ends, the stock collapses...

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More from @hkuppy

Kuppy

@hkuppy

10 Dec 20

1) Quick Event-Driven idea in $MCAC. Lemme start by saying I own a bunch (fair disclosure). It is “breaking out” today on big volume, which means it’s been “discovered.” (I havent added any today, but would if I weren’t at the airport and still in de-grossing mode).

2) What is $MCAC? It’s a small float (5.7m shares)SPAC that’s buying Playboy. What’s Playboy? It’s no longer the magazine and porno brand of Hef days. Now it’s a licensing business (clothing/casinos/condoms/booze/etc). Licensing is a stunningly good business and it’s growing fast

3) New CEO (Ben Kohn) took over in 2017 and pivoted out of bad biz (magazine/porn) to licensing. I spoke with Kohn. He has a PE background. He gets it. He’s here to make money—not chase girls. They will expand licensing and grow their Direct-To-Consumer business.

Read 9 tweets

Kuppy

@hkuppy

11 Sep 20

1) Let’s do a Friday happy-hour Event-Driven (ED) thread as ED keeps working. Not every trade is a home-run, but the hit rate has been surprisingly good lately. Let’s look at one of my favorite strategies; potential short squeezes...

2) $DDS may or may not be undervalued. It probably goes the way of $JCP, but that’s not my fight. I care about the short interest at 6,819,568. It has been high forever and there have been a number of squeezes in the past few years.

3) What matters today is that $DDS keeps buying back stock, setting up for a new squeeze. During July, they bought back 586,851 shares. By my math, between Aug 1 and Aug 29, they bough back another 267k shares. That means there are 18,366,790 Class A shares outstanding on Aug 29.

Read 11 tweets

Kuppy

@hkuppy

3 Aug 20

1) Quick $LPG thread. They report Q2 tomorrow. Results will be solid. I expect some low forward guidance for Q3 rates, but that doesn’t matter as VLGC is screaming higher again. NAV is in the low $20’s and financial leverage is low. They’ve been agressive on buybacks in Q1.

2) They bought back 6% of shares outstanding in 1 quarter. I expect they hoovered stock in Q2 at 1/3 of NAV. At current VLGC rates, they earn north of a buck a quarter and possibly higher if the sharecount shrank. The fundies are super solid due to Asian demand and US exports.

3) Anyway, $LPG is a damn large position for me and I added more before earnings.

Read 4 tweets

Kuppy

@hkuppy

30 Jul 20

1) Final $LOOT thread. On May 29, I wrote a thread joking that I was long a basket of companies that did well if the riots and looting acceleated (as I suspected they would). I felt that I had VERY low risk as the basket was cheap on valuation.

2) Over the next few weeks, people lost their collective minds and torched many large cities, while begging for police to be de-funded. There was a massive run on guns and ammo that surprised my own expectations.

3) Over those 2 months, I sold out of the core names as they rallied. Some like $DGLY were multi-baggers, while other substantially larger positions like $SWBI more than doubled and $VSTO was up almost that much. I really thought they’d come for $VTSI and maybe they still will.

Read 9 tweets

Kuppy

@hkuppy

10 Jul 20

1-Summer Friday Boredom Thread with a stock idea at the end....(wait for it)

2-In 2020, what makes stocks go up?? Not valuation. Definitely not cash flow. Revenue growth helps, as does losing globs of money, but this is simply indicative of current investor focus—it’s not real or sustainable.

3-Today, what makes a stock go up is small float + cross-ownership in multiple ETFs and other passive groups. As the ETFs fight for limited shares, they push the market cap higher, increasing the weighting in the ETF, forcing them to buy more shares. Positive Feedback Loop (PFL)

Read 10 tweets

Kuppy

@hkuppy

22 May 20

1) After some adjustments, $TNK did roughly $100m FCF in Q4/2019, $150m FCF in Q1/2020 and has forward guidance of $200m FCF in Q2. That’s roughly $450m in 9 mos and market cap is $525m today.

2) They locked in 20% charter coverage for next year at solid rates to protect the downside. LTV is in 40’s now and 30’s after Q2. They intend to buy in some expensive leases. No one knows what happens starting tomorrow and we can debate it forever, but TNK just created big value

3) Why is everyone so short-term focused on rates comping negative WoW instead of huge positives YoY? They just earned their market cap and the stock is barely up. It was at a discount to NAV even before this process started and now NAV nearly doubled.

Read 5 tweets

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