Bought Into The Most Heavily Shorted Company

Vested with 2 shares at US$155 last night and I may just sell it once it reach certain share price.

Apologies to writing on another company that is not related to the new 2021 Strategy series. Cause I need to write about it – to explain my decision.

This is highly likely the most controversial post I will be writing. Or maybe not.

Yesterday during the FB Live with JR_Chai, I talked about this 3rd or 4th most heavily SHORTED company.

It has over 60% short float ratio. Since I thought it is priced over $150+, the short squeeze may not happen. Oh no…I was wrong.

This morning, the share price of the company went over $190+.

During the FB Live, I mentioned that I will not be buying into the company, but after looking through the Fundamental Scorecard, the business model and future catalyst. I decided to buy just 2 shares.

 

In the FB Live, I also stated the 4 questions to answer if you intend to buy into a company that was heavily shorted. Thus, I will be answering the 4 questions in this post for this company.

1. Why was the company heavily shorted?

Highly likely is due to the sale of one of its best licensed product and the expected drop in revenue the following year.

 

 

2. What are the catalyst moving forward?

Potential Approvals in the next 12 months.

3. Is this a legit company?

With all the partnerships that is on-going, I will say yes. Plus this also proven a fact that the company’s platform is a great platform to partner with.

 

4. How are the financials?

As per Fundamental Scorecard, the company health is clean with no issue detected.

Fundamental Scorecard is a visualization tool that simplify all quantitative information into graphs while calculating the intrinsic value using timeless theories, and providing conclusions about the company for the reader to have an easier time to make decision. (If you are interested, do click on this link).

Conclusion

With the help of Fundamental Scorecard and some articles on the company, I was able to answer the 4 questions in such a SHORT TIME last night. It was also after that I decided to purchase 2 shares of the company.

However, I must also mention there are definitely other positives to this purchase:

  • Fundamental Scorecard indicated that the company has an intrinsic value of $186 solely based on the quantitative information and
  • there are only 17 million shares available for this company. This low shares count will probably increase the chance of a short squeeze along and also contributed to the high short float ratio.

 

 

The above is re-produce from TUBInvesting Blog with some amendments.