Buy the $SPHR Dip, it's SPHERICAL! (Sphere Entertainment Co) - $1.4 million+ calls, insider buying, volume-based support, Stanford Prof DD
SPHR (Sphere Entertainment Co) just had earnings this AM. There was a decent stock sell off today from a non-event/subpar earnings, but I saw over 1.4 million in net call option flow come in today during this dip. I've referenced research done by a Stanford Professor tons of times in this post.
**Four sources of confluence here:**
**1. Unique fundamental case highlighted by the research noted below**
**2. More than 1.4 Million in net call option flow (institution(s) are betting big)**
**3. Price is sitting at a volume-based key support level on the 1D chart**
**4. Insider Buys by the CEO at prices higher than now**
**WTF is SPHR**
Sphere Entertainment Co. (SPHR) is a unique entertainment company that owns and operates innovative venues, most notably the Sphere in Las Vegas, a state-of-the-art immersive concert and event space designed for large-scale performances and experiences.
**The Bull Case**
Unlike traditional venues, Sphere owns 90%+ of its content, allowing it to keep most box office, concession, and ad revenue. Analysts may undervalue Sphere due to limited historical data, unconventional structure, and high operational leverage. The current market value might underestimate its potential. Key sources include live artist residencies, immersive experiences, corporate events, suite sales, and exterior ads. A favorable MSGN loan renewal would enhance SPHR's cash flow, enabling strategic investments in Sphere expansion, content creation, and high-profile residencies, thereby fueling growth without immediate financial strain.
**The Bear Case**
Limited events (16 concerts + UFC) impacted revenue potential; 25+ concerts per quarter needed for substantial profitability. U2 is not drawing large crowds, impacting anticipated revenue from residencies. Upcoming MSGN loan renewal decision is critical. If the renewal is unfavorable, SPHR’s financial flexibility could be at risk. The main risk remains in Sphere’s ability to scale events and navigate upcoming financing hurdles. Also it could keep continue a downtrend if this support doesn't hold. (which is why having a stop loss where the trade is invalidated is super important)
**Premium on Calls Activity**
SPHR 42.5 C 02/21/2025 - $1,115,812 - 92% ASK
SPHR 40 C 12/20/2024 - $584,606 - 99% ASK
SPHR 45c 02/21/2025 - $547,187 - 98% ASK
**Chart**
Bottom wick into volume-based support indicates dip buying occurred today on 38-39.
**Insider Buys**
2024-03-04
SPHR Dolan James Lawrence Exec COB , CEO P - Purchase $46.88 +110,156 645,060 +21% +$5,164,270
2024-02-28
SPHR Dolan James Lawrence Exec COB , CEO P - Purchase $40.73 +76,139 534,904 +17% +$3,100,935
2024-02-26
SPHR Dolan James Lawrence Exec COB , CEO P - Purchase $41.11 +59,374 458,765 +15% +$2,441,017
**Additional Reading**
Stanford Economics Professor & Investor Kevin L. Mak wrote a pretty awesome research paper on SPHR. I'm not sure if I'm allowed to post the Google drive PDF here but search up "A Deep Dive Into Sphere's Unit Economics And Valuation By Kevin Mak".
**My Position**
I have 30 contracts of 45c 2/21/2025. I figured the longer expiry gave more time for the stock to recover and have additional catalysts such as additional residencies and the refinancing of MSGN play out.
**Disclaimer**
NFA I could be totally wrong and have been wrong in the past. DYOR and DD.
https://preview.redd.it/daznwd3ori0e1.png?width=2379&format=png&auto=webp&s=d0007be93374bb2d8a43ec2d6503a4f1251c3d9d