In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates:
SNV, MAR, DRI, MFRM, DD, GLW, OIH, NTRS, WRB, FIS, BRY, DFS, TK, EPAM
NEW BEARISH Plays
Groupon, Inc. - GRPN - close: 10.87 change: +0.16
Stop Loss: 11.75
Current Gain/Loss: + 0.0%
Time Frame: exit prior to May 14th earnings report
New Positions: Yes, see below
Why We Like It:
Is it too late to short Groupon (GRPN)? We don't think so, at last not yet. The stock is down -40% since the end of March. It's down -61% from its first trade at $28.00 when it IPO'd back in November. Investors are worried. The recent changes to the Board of Directors did not go far enough. Now earnings are coming up and investors could be fleeing the stock like rats on a sinking ship.
Further complicating matters for investors is a big lock up period is set to expire soon. Originally it was May 2nd but the lock up expiration has been pushed back to June 1st because it was too close to GRPN's earnings report, which is May 14th. I saw some comments that suggested almost 94% of GRPN's stock is still locked up and could come to market once the lock up expires but I could not validate those figures. According to YahooFinance GRPN has about 645 million shares outstanding but only 263 million in float (available for trading).
I do consider this an aggressive, higher-risk trade. The trend is down but GRPN is definitely oversold at this point. I am suggesting bearish positions at the open tomorrow and we'll try and limit our risk with a stop loss at $11.75. Readers may want to use options to limit their risk even further.
We do not want to hold over the May 14th earnings report.
(Small positions at the open)
Suggested Position: short GRPN stock @ (the open)
- or -
buy the May $10 put (GRPN1219Q10) current ask $1.00
Entry on May xx at $ xx.xx
Earnings Date 05/14/12 (confirmed)
Average Daily Volume = 2.6 million
Listed on May 01, 2011