27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Hedgeye Risk Management co-founder Brian McGough said Wednesday there’s plenty more downside to come for Peloton Interactive Inc (NASDAQ:PTON).
McGough said Hedgeye will be releasing a report at 2 p.m. Wednesday making his bearish case against Peloton.
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"We're presenting our case today at 2pm as to why $PTON either should never have gone public, or picked the wrong strategy. Either way we get to $2bn-$4bn cap vs $9.5bn today. Once the lockup expires in March, watch out…" McGough said in a tweet.
A $2 billion to $4 billion market cap implies a price target range of between around $7 and $14 for Peloton shares.
Left Weighs In
McGough isn't the only high-profile Peloton bear to issue an aggressive price target this month. On Dec. 10, Citron Research editor and notorious short seller Andrew Left said Peloton is headed to $5 by the end of 2020.
Left said the stock's $15,631 in enterprise value per subscriber is astronomically high compared to its peers and compared Peloton to GoPro Inc (NASDAQ:GPRO) back in 2014, a stock that is down 92.6% in the past five years.
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Left admitted to owning a Peloton bike and said his bearish take on the stock has nothing to do with the quality of the product or the company and is simply a reflection of his take on the stock’s valuation.
“The takeaway is clear. Peloton at $10BN or even $5BN makes zero sense,” Left wrote.
Benzinga’s Take
High-profile tech IPOs haven’t performed particularly well in 2019, including Uber Technologies Inc (NYSE:UBER), Lyft Inc (NASDAQ:LYFT) and Slack Technologies Inc (NYSE:WORK). So far, Peloton shares are up 12.5% overall from its IPO price, but McGough seems to be suggesting a significant amount of insider selling could be coming along with the lock-up expiration in March.
Peloton's stock traded down 2.8% to $31.98 per share at time of publication.
Do you agree with this take? Email feedback@benzinga.com with your thoughts.
Related Links:
Citron Thinks Peloton's Stock Is Going To $5, Compares It To GoPro
Everybody Hates The Peloton Ad, But Stock Is Doing Just Fine Since The IPO
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.