Looking Back on Winners: Lyft & Thunder Bridge (w/ John Jannarone)

TL;DR

IPO Edge Editor in Chief, John Jannarone, suggests taking profits on a short Lyft trade, while recommending holding or buying Thunder Bridge warrants with a potential $0.80 upside in the next two years.

Transcript

JAKE MERL: Welcome to Trade Ideas. I'm Jake Merl, sitting down with John Jannarone, Editor in Chief of IPO Edge. John, great to be back on the show. JOHN JANNARONE: Thanks, Jake. JAKE MERL: So I usually don't really say this at all to our guests, but your past few trades on our show absolutely crushed it. I mean, you were just here about a month or... Read More

Key Insights

• 💦 Lyft's stock drop after Jannarone's interview may have been influenced by Uber investors shorting Lyft to hedge their stock.
• 🧑‍🏭 Jannarone's successful trade on Lyft highlights the importance of analyzing profit margins and other fundamental factors.
• 🙃 Thunder Bridge warrants became a more attractive opportunity after a private placement deal, and Jannarone sees further upside potential.
• 💪 Thunder Bridge's strong brand, sticky customer relationships, and 20% EBITDA growth make it an appealing investment.
• 😃 Competition and the deal failing to close are the biggest risks to the Thunder Bridge warrants trade.

Questions & Answers

Q: What were the main reasons for Jannarone's bear thesis on Lyft?

Jannarone highlighted Lyft's slim profit margins, overvaluation, and the complexity of analyzing their insurance liability as key reasons for shorting the stock.

Q: Why did Lyft's stock drop so quickly after Jannarone's interview?

Speculatively, the drop may have been influenced by Uber investors shorting Lyft aggressively, potentially to offset their inability to sell Uber stock due to lock-up restrictions.

Q: Should investors consider shorting Lyft at its current levels?

Jannarone suggests taking profits instead of going short, as the stock has already dropped significantly and the potential for a short squeeze involving Uber shareholders may limit further downside.

Q: What is a SPAC, and what was Jannarone's main thesis on Thunder Bridge warrants?

A SPAC is a Special Purpose Acquisition Company that raises funds to acquire a target company. Jannarone recommended Thunder Bridge warrants as they became more attractive after a private placement deal that removed the warrants for $1.50 in cash and a quarter of a new warrant.

Summary & Key Takeaways

• Jannarone successfully predicted Lyft's stock drop due to overvaluation, insurance liability, and slim profit margins.

• The drop may have been influenced by Uber investors shorting Lyft to hedge their stock.

• Considering the increase in Lyft's short interest, Jannarone advises taking profits instead of shorting further.

• Jannarone recommends holding or buying Thunder Bridge warrants, which have doubled in price but are relatively cheaper after a private placement deal. The warrants may see another $0.80 upside over the next two years.