Editors Note:

The market volatility has eliminated multiple positions over the last week. We lost another one on Monday with EGHT crashing 4% on no news. Resistance held and sellers gave up. The Russell lost nearly 1% with the A/D line nearly 3:1 negative. The China trade agreement could be slipping away and it is turning into a "sell before the news" event.



Current Portfolio


Stop Loss Updates

Check the graphic below for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline.


Profit Targets

Check the graphic below for any profit stops in green. We need to always be prepared for a profit exit at resistance.





Current Position Changes


MDR - McDermott
The long position was entered at the open.

EGHT - 8X8 Inc
The long position was stopped at $19.35.



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Full updates on all plays on Wednesday and Saturday. Only closed plays are updated on other days.


BULLISH Play Updates

EGHT - 8X8 Inc - Company Profile

Comments:

No specific news. Down hard with a 4% drop to stop us out just after the open.

Original Trade Description: Feb 9th.

8x8, Inc. provides enterprise cloud communications and customer engagement solutions for small and mid-size businesses, mid-market, and distributed enterprises worldwide. It offers unified communications, team collaboration, conferencing, contact center, analytics, and other services to various business customers on a software-as-a-service (SaaS) model. The company provides 8x8 Virtual Office, a self-contained and end-to-end solution that delivers high quality voice and unified communications-as-a-service; 8x8 Virtual Contact Center, a multi-channel cloud-based contact center solution; and 8x8 Virtual Office Meetings, a cloud-based video conferencing and collaboration solution that enables secure and continuous collaboration with borderless high definition (HD) video and audio communications from mobile and desktop devices. It also offers 8x8 Sameroom, an interoperability platform, which enables cross-team messaging and collaboration within a large organization and between organizations; and Script8, a communications flow and routing engine that offers a scripting environment for routing communications data for specific workflows, as well as allows end-users to create simple, personalized, and customizable communications experiences, such as communications control, external data source integration, and intelligent routing. The company integrates its services with third-party applications and platforms, including enterprise resource planning, customer relations management, human capital management, and other proprietary application suites. It markets its services to end users through direct sales organization, Website, and channel partners. As of March 31, 2018, the company serves approximately 53,800 business customers. 8x8, Inc. was founded in 1987 and is headquartered in San Jose, California. Company description from FinViz.com.

8X8 was punished severely for earnings that missed only fractionally. The company reported a loss of 6 cents on revenue of $89.9 million. Analysts were expecting a loss of 6 cents on revenue of $88.6 million. No problems there except that matching on earnings normally produces a decline in the stock.

They lowered guidance for 2019 from $334-$338 million to $334-$335 million. Still not a major decline but the stock was hammered.

Service revenue rose 20% with a 61% increase in customers billing more than $10,000 in monthly recurring charges. Average monthly service revenue per business customer rose to $5,211.

The CEO said, "we are disrupting a $50 billion addressable market that is shifting toward cloud solutions with a preference for a single technology platform."

Shares fell from $19.50 to $16.50 on the earnings. They have recovered to $18.79 and continue to move higher.

Earnings April 30th.

Update 2/13: 8x8 announced the offering of $200 million in convertible senior notes. Over the next 40 days the company will enter into agreements with option counterparties to create "capped calls." This process is an attempt to limit the impact of any future conversion of the notes on the number of shares outstanding.

Position 2/11:
Closed 3/4: Long EGHT shares @ $18.88, exit $19.35, +.47 gain.
Optional:
Closed 3/4: Long May $20 call @ $1.05, exit .65, -.40 loss.



BEARISH Play Updates

No Updates on Current Positions