He Predicted Fall Of WeWork And Rivian, Now This Analyst Warns These 3 Stocks Are Set To Implode

Zinger Key Points
  • David Trainer anticipates that Carvana may go bankrupt and the stock could lose all of its value.
  • He says Pet food company Freshpet is also in the “Danger Zone” of collapsing to $0.

While there’s no shortage of Wall Street analysts who will argue the bull case for stocks, there are just a few who are willing to put their reputations on the line and call out companies that will likely to end up in bankruptcy.

The Man With The Vision: David Trainer, the founder and CEO of research firm New Constructs, is a Wall Street veteran who has been able to foresee the downfall of companies long before their collapse. His independent research technology firm combines human expertise with machine learning to analyze millions of financial filings in its investment research.

As reported by Fortune, Trainer is best known for anticipating the demise of WeWork WE, which was set to go public in 2019. At the time, New Constructs called it the "most dangerous" IPO of the year. The WeWork IPO was ultimately cancelled and the company’s valuation cratered by 70%.

He also foresaw the decline in Rivian Automotive Inc's RIVN stock, which blasted off to a $100 billion valuation upon its IPO, then began a long, painful decline. The company now has a market cap of about $26 billion.

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The Three Stocks Set To Drop: Online used car retailer Carvana Co CVNA has long been on Trainer’s radar as a stock that was likely to fall. Shares peaked at $360 in August 2021 and are now trading at $31.52 according to Benzinga Pro.

New Constructs’ analysis now anticipates that Carvana may go bankrupt and the stock could lose all of its value. Trainer notes that the company’s “dwindling cash supply, intense competition, and elevated valuation puts the stock in danger of declining to $0 per share.”

Exercise equipment company Peloton Interactive PTON has seen its stock price crash from a high of $162 in December 2021 to $11.01 as of Friday. Trainer writes that the stock in danger of sliding to $0, adding that “investors may not realize that the company only has a few months’ worth of cash remaining to fund its operations.”

Pet food company Freshpet Inc FRPT is also in New Constructs’ “Danger Zone.” Trainer sees this as another stock with the potential of collapsing to $0, and points to the fact that the company has “grown the top line at the expense of the bottom-line, and sales growth has driven more cash burn.”

Freshpet reached an all-time-high of $184.82 on April 30, 2021, and has been steadily declining to a 52-week-low of $51.34 earlier this month. The stock closed at $59.67 on Friday.

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Posted In: Short IdeasPrice TargetAnalyst RatingsTrading IdeasDavid TrainerNew Constructs
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