Liars Poker

The other day, I was writing about GPRO and what a wonderful stock it was. Never underestimate the power of the IBs to try to screw the retail investor.

GoPro: GPRO

We try to base our stock buying and selling on known quantities. When these quantities change, it can have devastating results. Just like today.

Nicholas and Jill Woodman gave nearly 6 million shares to their newly started foundation and JP Morgan waived the lockup for the foundation so that they can sell those shares on the open market as early as tomorrow (Oct 3). For holders of GPRO stock, this means that instead of waiting the 180 days (Dec 26th) for insider shares to be sold, we get to see an unexpected and quite possible 25% increase in the share count in one day. Thanks JPM, way to dilute a good thing. The market hates the unknown. We would have been better off if JT Marlin was the underwriter (fictional brokerage house from the movie: Boiler Room) for GPRO. At least we would know that we were going to get screwed.

OK, since I am out on GPRO anyway, no loss. The way I see it, if these shares hit the market. They owe me a 25% drop to account for the dilution and we only got 7% today…I wouldn’t touch this until we pull back to $60. Even then, you might want to dump it before the lockup expires on Dec 26th…assuming there will still be shares locked up by then.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>