fruity pebbles
Footballguy
I mean why wouldn’t they use these ridiculous pumps to sell stock and raise capital? Now……if they were in on the pump, that’s a different story. Not that the comatose SEC would do anything anyways.
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Stock Thread (13 Viewers)
- Thread starter St. Louis Bob
- Start date
I understand why they did it. Just ruthless to do it today (and you know they had anonymous help) and deliver the post effective news at the end of today. Stock is already down 30% AHs.
GreenNGold
Footballguy
If the meme stock holders want to pay off their debt, more power to them. It doesn't change anything about the business and is just another transfer of wealth from the poor to the rich though.
Hence the ruthless comment. For some reason these investors actually think the CEOs give a crap about them outside of being their ATM.
Desert_Power
Footballguy
The greatest transfer of wealth in human history strikes again.
fruity pebbles
Footballguy
It’s crap like this that makes me think we have another big drop coming. Still way too much gambling.
fruity pebbles
Footballguy
Nothing like a little dilution right before bankruptcy
Capella
Footballguy
Lol. Dirty work.
Capella
Footballguy
Are people going to run out of money? There is still plenty of jobs. Seems to me it’s more access to these apps where it’s easy to buy and Reddit shtick etc contributing to it.
Americans will always find money to lose money.
Alien Fantasy
Footballguy
LMAO - It's like everyone in this sub on stock investing is incapable of reading SEC filings. I will wave to you all midflight.
fruity pebbles
Footballguy
64% of Americans are living paycheck to paycheck. Bear markets end with people swearing off the stock market for years not immediately jumping into the meme stocks again.
KGB
Footballguy
Alien Fantasy
Footballguy
Dodds and others.....
GME. Was it a boom or bust? or still holding?
I have been adding GME every month. I believe in the turn-around story. There are not many businesses that are essentially debt-free (a small French Loan for Covid) AND cash flow positive. The fact that shorts never closed is just icing on the cake. They will be profitable soon.
BBBY is a redo of the original GME squeeze. Massive shorts, on the RegSHO/threshold list, Feb 17th gamma train setup, and has an active retail investor base. The bankruptcy talk was always nonsense to those that were paying attention.
Both of these stocks are going substantially higher in the short term.
General Malaise
Footballguy
Okay, I can understand the Reddit herd rallying to revive GameStop or circling the wagons to save AMC as those companies seem to fit what I imagine a typical Reddit Ape recalling fondly from his youth.
But Bed Bath and Beyond? Did my aunt Gladys start following Wallstreet Bets on Reddit this week? Why are the masses in a fervor over a store that sells vacuums and $20 toilet brushes?
But Bed Bath and Beyond? Did my aunt Gladys start following Wallstreet Bets on Reddit this week? Why are the masses in a fervor over a store that sells vacuums and $20 toilet brushes?
General Malaise
Footballguy
Like can I get at Bed Bath and Beyond that I can't get at Target?
Grace Under Pressure
Footballguy
Isn't the common thread with meme stocks to impact the stock price through coordinated retail trading efforts at reddit and similar sites? Didn't think it was really about the company per se, like the interest isn't that Bed Bath & Beyond sells things available at Target as much that it's a stock that's more easily manipulated by the coordinated actions of retail traders.
Grace Under Pressure
Footballguy
It really is nonsense already with this.
McBokonon
Footballguy
No, you’re right. Bed Bath also has the added Ryan Cohen factor, who knows how to profit from these people while somehow convincing them he’s Robin Hood.
McBokonon
Footballguy
Incidentally, I guess he took a large position in JWN so that might be the next dinosaur to get volatile.
General Malaise
Footballguy
I'm not closely following, I just seem to recall the fervor around GME was the fact that so many of the backers loved the company as it reminded them of their childhood. I'm fairly certain that was part of the narrative.
Dr. Octopus
Footballguy
General Malaise
Footballguy
Now I'm more confused than ever. Nordstroms' has a P/E of 12 and a good balance sheet. I need a tutorial.
McBokonon
Footballguy
Ryan Cohen is the Chewy guy who has become a cult hero to people who think they are fighting a war against evil hedge funds, and he is their Spartacus. He got involved in GME and BBBY. Even though BBBY has stated, in their own words, that they couldn’t make a loan payment and that they’re struggling to meet financial obligations and might explore bankruptcy, the memesters have decided it’s all corrupt media lies. Cohen already took his money and ran from BBBY.
Nordstrom is a mall-based department store so by that alone they’re a dinosaur. Business is ok and I think they’re doing better digitally than others. The only connection there is Cohen now, Retail investors who idolize him might pile in, pushing the stock up well past a reasonable P/E. Then he’ll probably sell while retail holds his bags again.
Desert_Power
Footballguy
I consulted my Mayan calendar and believe this will actually be on March 17 for quadruple witching day
General Malaise
Footballguy
I shop at Nordstrom Rack exclusively. It's never not packed. I've never not waited in a line. I agree that Mall stores are dinosaurs, but I'm not quite there yet on buying all my clothes online. I still have to try pants on as my butt shrinks and other parts grow. Hell I might buy JWN on valuation alone.
McBokonon
Footballguy
I like the Rack (giggity). I’m just answering your question. If you see this stock suddenly whipping around like a penny stock, you’ll know why.
General Malaise
Footballguy
I have much to learn I suppose. Also have some 401K cash contribution about to hit my account, so I might gamble on this one. They pay a dividend!
Desert_Power
Footballguy
I think we should all do some due dillegence on the Rack.
ConstruxBoy
Kate's Daddy
I don't think those links are allowed in here.
ChiefD
Footballguy
Because its "lets pick this stock to bend over American investors day."
McBokonon
Footballguy
You never really know but the “narrative” is that they’re scrambling into the AI arms race. Panicking. Freaking Out. They Have No Plan. It’s chaos at Google HQ. They never even heard of AI until Microsoft put ChatGPT into Bing and now Google is standing around with their pants down. And so on.
Alien Fantasy
Footballguy
My guess would be the liquidation of Credit Suisse's assets. They held 12,462,969 shares as of September 30th
jvdesigns2002
Footballguy
There had an AI conference today and most likely the market probably wasn’t super impressed with what they presented. Generally speaking—there is a lot of ambiguity about how AI could hurt companies like google. Chat GPT and similar AI platforms can basically be replacements for basic search functions. This could impact advertising revenue for google. Secondly—there is also some ambiguity in if it’s ethical for AI to generate answers using information that it searches for online without giving credit to or money to the sources in which they are drawing the information from.
NajehHejan
Footballguy
@Chadstroma - need your insight please. I read a rumor on Stocktwits (great source - I know) that RKT is closing about 200 mortgage loans per day while UWMC is closing about 1500-2000 per day. Any insight as to if you think those numbers are real? I’ve been reading your posts for years about how you feel UWMC is far superior. I’m just curious - these rumored numbers are striking - if true, how long is Rocket for the game. May go in HUGE on UWMC.
Chadstroma
Footballguy
I can't say how much bottle rocket and UWM are closing per day but yes has taken the title of largest mortgage lender in the country. A big part of this is how these companies are built and how they do business.
Bottle rocket, as I say often, is a GREAT marketing company that happens to do mortgage loans poorly. That really says it all about the company. They spend heavily in marketing and are good at it and they have made it a point over the years to develop relationships where they basically give RESPA the middle finger (RESPA is the law that forbids lenders from giving money to others for referrals or otherwise not being involved in the actual lending process) with companies like American Express and Allstate that they use their client bases to get loans and then the partner company gets more revenue. Their wholesale division has taken hits with UWM forcing those with broker agreements to choose either bottle rocket or UWM- the large majority had the easy decision to UWM. A lot of what they do was wonderful business in a refi boom market. Many consumers have no clue but they know rates are lower. They get something in their AMEX statement that is going to give them $500 credit on their AMEX plus they will get a lower rate on their mortgage and think... man, why would I pass that up? Well, the answer is that that $500 is nothing compared to the lost opportunity of actually using a decent lender. BUT.... back to the point... your Allstate rep calls you and says, "Hey, you have had the same mortgage forever, I am going to save you more money" and "ok" or someone who doesn't know what to do sees the millionth commercial on tv and finally picks up the phone. That is the great marketing company part. Then there is the doing mortgages poorly part which is that they have a poor reputation among pretty much any professional involved in RE. Most realtors will urge a seller to accept an offer from another buyer with a pre-approval pretty much anywhere else. They don't really market this anymore but it is still the same idea.... most consumers want a professional to handle their loans and not "push button, get mortgage". You typical consumer may be more comfortable getting an easy/cheaper route on a refinance but typically want competence and expertise as their primary drivers in a purchase. All of their marketing is based on easier and cheaper (though they are no where near cheaper). In a purchase market like this, they just are not set up to do well. People are not going to a pre-approval to buy a home from their AMEX statement or their insurance guy or pushing a button. They want a person with experience and knowledge that can make sure this all goes smoothly.
UWM has built it's business around brokers. They went all in on brokers when brokers were nearly extinct. They have been a powerful force for growing the broker channel to prominence again. They are laser focused on being broker friendly and invested heavily in tech to make them more appealing than any other lender. Over the last refi boom, you wouldn't really have MLO's changing from lender to lender as much because there was so many loans that to walk away from your loan pipeline would be costly and there was no big driver to do it. Now, that is gone. The retail channel (banks and non-bank lenders like bottle rocket, Fairway, Guaranteed Rate, etc) is being hammered as there are no easy loans. Their organizational and overheard structures has caused margin compression so when they were, in the past, somewhat near brokers on cost now they are no where near brokers on cost and losing loans left and right. There is a huge migration of MLO's from retail to the broker channel which in turn is fueling UWM to continue to grow as they are the 'preferred' lender of most brokers.
I will say that bottle rocket continues to be sneaky. They are all about data and they will use that data to continue to sell overpriced crappy mortgages. A great example of that is their "Rocket Money" app which basically is a "hey, we will help you save money just give us access to ALL your personal financial data.... trust us, we got your back". With what I have seen countless times in terms of how they lie, cheat and steal with consumers and brokers as a matter of normal SOP... I would sooner file bankruptcy than sign up to a free app that will save me money.
I am still long on UWM. I do think that Wall St is behind on this because they think of UWM as just another mortgage lender when they are not. It is more akin to a tech company focused on mortgages using the growing broker channel as it's salesforce.
NajehHejan
Footballguy
Great stuff - thanks! I’m up about 20% on my long position and think I’m going to add more. I have to think Wall Street eventually catches up. And still that juicy 9-10% dividend!
Chadstroma
Footballguy
Yea, stock wise the dividend make it easy to stay patient with it.
Harry Frogfish
Footballguy
I remember two friends arguing over AAPL or MSFT in the early 90s. MSFT was winning, but the tables turned, and both won at this point, if they just held on. But MSFT in the 90's went bonkers. Then stagnate for 10 years. Literally, at one point, it was the same price one decade later. But now in this last 13 years or so, it's a whole other story, including a little dividend to go along with it.
The argument was how marketing almost always wins. And at the time (early 90's), Microsoft and Gates seemed to be the "Rocket" (Mortgage), if you will. While the Apple argument guy was like no, Apple will win out because of innovation and such (UWM).
Now it seems, the roles are reversed, ironically enough, in that Apple is all about the marketing -- and there is no question they are not just good at it, but great -- and less about innovation (although I wouldn't know for sure). Meanwhile, Microsoft, the big bad monster monopoly at one time, has quietly chugged along with a lower profile. And with that, the results speak for themselves. MSFT is no longer some laughing stock (sorry, had to). Anyway, that dinosaur (for tech) has gone from a T-Rex to a Brontosaurus. And the grazing is good.
Now, not knowing a thing about the mortgage biz, but having followed Chad's drum beat for UWM on here, along with his disdain for Rocket, likens me back to the two tech giants above, in some way. And don't get me wrong, I'm in no way against Chad, and VERY much appreciate the info and his side of things, but it will be very interesting to see how this plays out, is all.
Wall Street isn't dumb. That price, corresponding to the overwhelming yield are there for a reason. There's no way it's that easy. Rocket, and others I assume, must have something (marketing for one, obviously) that makes many astute analysts and firms, not convinced on UWM. Or maybe it's just that they are more convinced on the strategy of Rocket and others. I really have no idea and would follow the advice of Chad, if I had to pick. That being said, it does seem to derive from a, and I don't want to say biased, but certain side of the industry. Unless I'm mistaken, that's not the entire pie, if you will. Anyway, that price and yield are too good to be true, imo, and something has to give. What exactly, I wish I knew. I may start nibbling, actually.
As for the marketing side of things (getting back to Rocket's strengths), I am a strong believer in it. People are idiots, for the most part. If the marketing is that good -- so much so that the "innovation or technology" of a competitor is compromised -- then I will side with the marketing (and the not-so-smart humans that follow it) winning out. It doesn't always matter who has, or what the best product is...all that matters is who and how many will buy it.
So as much as Rocket sucks, from what I've learned here (when you get down to the nuts and the bolts of it), they might be doing something right (marketing), to be able to suck all these apes into the campfire in their cave. And that just might be enough to stave off competitors, and more. We'll see.
FTR, I wouldn't put a penny on them, after reading this ongoing discussion. And I would love more than anything to go all-in on UWM. But Wall Street isn't this clueless. People like to think they are, and sure, occasionally you can find some story of how "easy" it was. But it isn't.
That yield and price are not going unnoticed in the least. That's actually the part that gives me pause. There's way more here and I would love to know what it is.
FreeBaGeL
Footballguy
I am not a broker but I work with a lot of loans and refinances. I'm always pretty surprised at how high Rocket's rates and fees are compared to the competition, and wonder how people are willing to pay $50k+ extra over the life of their loan because they were unwilling to pick up the phone for 5 minutes and ask for the rates at pretty much literally any other lender.
My suspicion was always what you said here (and I'm glad to see confirmed), that their business model is to spend a ton of money on marketing and partnerships to target customers with a much worse offer but have their name in people's brains enough that those people don't know any better.
Basically the Monster Cables (remember them and their $40 well marketed HDMI cables that were pushed via their Best Buy partnership?) or Vacasa in the short term rental industry.
I guess the worrisome part about that is that the American consumer is a friggin' idiot and Vacasa, as both the worst and most expensive short term rental host in the industry, is by far the leader in the space. People like to say that humble people/companies just putting their head down and doing a good job and offering a better value should be rewarded, but the reality is people most often fall for the overconfident boasting idiot that won't shut up about bragging to everyone about how amazing they are, when they actually suck.
fruity pebbles
Footballguy
Rather have it dropping into the CPI number honestly. We rally into that and it pops hot, look out below
SFBayDuck
Footballguy
With 4.13% yield in cash in my Fidelity investment accounts, I'm definitely not as in a hurry to re-invest whenever I sell something.
Still trying to figure out when to take some of my gains in energy stocks off the table as they have run again this week. I was conflicted about where to put it if I do, but maybe I'll just keep some in cash for a bit?
Still trying to figure out when to take some of my gains in energy stocks off the table as they have run again this week. I was conflicted about where to put it if I do, but maybe I'll just keep some in cash for a bit?
Steeler
Footballguy
This is actually a pretty compelling argument, lol.
