Hey retards following $VCX,
A lot of people asked on my last DD when VCX was at \~380 a share how to short.
Not only are shares difficult to find, they’re expensive. Fee rate of 800%, so you pay 3% a day just to short shares. Stupid. So the stock price is staying massively elevated because shorts can’t short.
How can you bet against VCX without paying this tax?
You could buy puts, which are stupidly expensive. The 70P 10/17exp trades for $33, so you only profit when share price is below $44. NAV is at $20/share, but that’s cutting it close.
The calls, despite having incredibly low volume, are stupidly mispriced.
I can sell the $70 10/17c and buy the $200 10/17c for $13,000 of collateral to receive $2,500 on expiration if the stock is below $70. 2,500 return on 13,000 collateral isn’t great, but the return is practically free money.
The call spread pays out under 70/share. VCX’s share lockup period ends in September - my calls expire in October. **The market has not correctly priced in the share lockout.** the float will skyrocket and the shares will inevitably collapse to a reasonable NAV multiple by then as restricted shareholders finally dump.
At under $20/share of NAV today, VCX would need to pull off a miracle to trade over $70/share after the lockup ends. That’s triple NAV, and a lot of that NAV won’t even be in sexy private companies anymore.
When I say this bet cannot lose, I cannot reasonably conceive of a situation where this company trades at 3x+ NAV despite all shareholders being able to sell. The only reason we see the price today is low float, high borrow fee shenanigans.
The contracts are ultra low volume so be careful how you get filled. I think the algorithms haven’t correctly calculated how the October expiration will be affected by the share lockout ending.
Tl;Dr Short VCX is expensive so use a call spread, free money if you use a spread expiring after the lockup ends.
I’m selling two contracts.