i just SHORTED 1st Stock in MY LIFE!
Application form to apply & try and get in my Private Stock Group/Financial Fortress
Holy Smokas guys this is the first time I have done a short sell. I have been in the stock market for so many years and I have never done a short sell. And everyone that watches my channel knows that I am a big bull on the stock market and I hate to short stocks. So this is a real historical moment for me.
I hope you enjoy this video where I am going to go in depth on which stock I shorted. I will also go into how much I shorted and what the risks are for me. But the most important thing, why I shorted this stock. Let me know your opinion on this move? Is it a bad move? Is it a good play? Leave me know and smash the thumbs up button.
Want to join our free STOCKHUB discord chat? Here is the link
This is where you can chat for free with other investors in the stock market about individual stocks or things going on in the market. Enjoy!
*My Instagram is : FinancialEducationJeremy
This is a Jeremy Lefebvre Production
Created by Jeremy Lefebvre
Bow my goodness guys, you are watching a historic video here today I just made a crazy move. I’ve been in the stock market for 12 years and I just did my first short sale ever I have ever done in the history of me being in the stock market. I did it here today.
This is crazy. This is a historic video for the channel for me for ever Okay, in case anybody’s confused on what the heck short selling a stock means it means you’re flipping your own flapjacks essentially.
So you’re betting that a stock price is gonna go down Okay, rather than usually we buy stocks because we believe the stock price is going to go up I’m making essentially a bet out there that I believe this particular stock is going to go down and down in a major way you know me.
I’ve kind of made my name out there basically on the back of me going long stocks, specifically a lot of growth stocks out there in general if you look at the public count for instance, it’s a whole bunch of long positions that’s all it is essentially I don’t usually short stocks I don’t usually do even options for the most part every once in a while I’ll do an options play.
I bought some put options on Ford a few years ago did pretty well on those but outside of that like I never really bet on stocks to go down and this is literally the first time I’ve ever shorted a stock Okay, so in this video here today we’re gonna get into what stock This is okay, what stock is it?
How much did I short for and why did I short for that specific amount? Also, we’ll get into like why like why am I so bearish on this company? Why do I think it stock price is going to go down considerably over let’s say the next year or so. Okay, what are the risks for me in this position like what can go wrong here?
And lastly, we’ll talk about am I going to short more of this stock in at what price what I short more of the stock and for how much hope you guys enjoy this video as always this video is sponsored by dark side Jeremy if you don’t know him, check them out.
Okay, make sure you smash the thumbs up for the dark side Jeremy and if you haven’t gotten in dark side stock hub yet go ahead and do it it’s the first link in the description down there already guys let’s get into this what stock gets as well.
Here’s a little hint you guys know all the gyms have been closed down. Some of them are starting to open back up obviously. But obviously with the whole Roni situation tons of gyms all over the United States and across the world have closed tons of people have put their memberships on pause or cancel their memberships over time.
And it’s led this one company to thrive on the back of this and their name is peloton interactive ticker symbol peloton, P t o n this stock has been about as hot as you can possibly be. Look at the stock price K, you go back to you know six months ago, this was a $30 stock here today it’s over 120 I mean talk a beta massive move.
We’re talking over forex over forex. And I’m not talking about forex. I’m talking about a 4x of the stock in literally six months. Incredible. Okay, how much did I go ahead and short for I went ahead and shorted for right around $10,000 a little under 10,000 so $9,752 to be exact and 70 cents.
I went ahead and short and I shorted out $121 in 91 cents, okay, that was that was basically shorting 80 shares out there. Now if I want to go ahead and cover my position here today, which I’m certainly not going to go into but if I wanted to cover my position I would basically make $88.70 profit as of right now.
I did the move like as soon as the market pretty much open today. So I’m about point nine 1% so far on this peloton short position, but obviously I’m not in this for a 1% move. We’ll see what happens with this over time. Why am I so confident that I wouldn’t make this my first short sale ever of my life?
Okay, well, first off, why $10,000 you know me, I have millions invested out there so why only let’s say $10,000 I’m a newbie shorter This is my first ever short I can’t go into this like guns blazing like oh, I’m gonna short 100,000 of the stock I’m gonna short a quarter mil I’m sure to half mil No, okay, just know like on the brand new newbie didn’t shorting
This is my first time ever just because I’ve been in the stock market picking stocks to go long for 12 years. That doesn’t mean anything when it comes to shorting. I have a really good understanding of the market and stocks and things like that.
But just because I might be decent at this, it doesn’t mean I will be decent at this. So I need to limit my risk. Let’s just put it that way. That’s why I did you know 10k or a little under 10k and this rather than like 100k or something like that.
Okay, so why am I so confident this stock is gonna go down a lot. Okay, so 2020 these levels of revenues are completely unsustainable. In my opinion, the company has free growth going for them. Like it’s just completely unsustainable, okay, your gym gets closed, right? And the road is going around.
So you’re like, Huh, I guess I need to like get some home workout equipment right? Like that’s the logical next step if you go to the gym, and I look at even us, like in my household we’ve gotten a lot of like at home gym equipment over the past I don’t know six, seven months since Ronnie took off right? We bought a punching bag. We bought a jump rope we bought boxing gloves.
We bought this on you know, like a medicine ball 25 pound medicine ball, we bought a couple of kettlebells a 35 pound one a 15 pound one off Amazon is from some other stores and anybody that likes to work out essentially has probably bought a lot of at home gym equipment recently Okay, which can also include peloton and by the way.
I just want to say if the person that detailed the x over at the house today is watching this video, it looks beautiful. You did a phenomenal job. peloton is its own planet right now, the expectations are ridiculous for a peloton so unsustainable and so unrealistic in my personal opinion, obviously, this all has to play out.
But I just don’t think you know, anywhere close to these levels of expectations are realistic, longer term. And I own some stocks that have some insanely high expectations, like tests on my Tesla in the planet, the planet cells, jack Jackson.
Okay, so when it comes to stocks, super high expectations, but the difference is between a Tesla myosin, or a planet that sells jack Jackson, for instance, the difference is essentially, I think those companies are sustainable.
I think those companies are going to have massive growth for a long time into the future. peloton I am not confident in at all as far as that one. I just don’t feel like now. That’s why I have it crossed out here. I just don’t feel like that one is sustainable in terms of its stock price. And in terms of its underlying business at the end of the day.
Look at this. Okay, the latest quarter, they’re going to report here, you know, pretty soon and over the next, you know, month or two, right? That quarter is basically a fiscal year 2021 quarter has already ended their fiscal year 2021.
Although we’re still in calendar year, obviously 2020. The analysts are expecting out there this company growth 279% Okay, that is so far unsustainable. I can’t even like describe it.
Okay, now, maybe they hit that number. Maybe they hit that number? I have no prediction on if they will miss or hit that number, or what’s going to go on there. Okay. All I know is That’s ridiculous.
Almost 300% growth there. Okay. But when we look at the current fiscal year, which is going to be over this next four quarters, it always have them growing around 100% I actually don’t think they’re gonna grow 100% over this next fiscal year, I really don’t, I don’t think they’re gonna have that much growth.
And when you have these type of huge expectations, and if all sudden you don’t come in with these crazy numbers, guess what, investors start flooding out that stock pretty dang fast. But not just that the biggest divergence between what analysts have Wall Street have in what I believe.
Is when we look at their fiscal year 22k, which is a full year from now, when that fiscal year will start. Okay. And analysts have them growing that you’re 33% I think they’re going to shrink revenues that year. You heard me right.
I think revenues will be down that year, versus analysts expected the company growth I mean, you’re talking about when if that happens, okay, you’re talking about a gargantuan move downward in a stock because you’re talking about going from crazy ridiculous growth to if I’m expecting the company to shrink revenues.
I mean, that’s a massive difference or let’s say they do grow revenues but it’s only like 10% in that fiscal year that’s still gonna make people flood out that stock left in right let’s put it that way cuz people are in this company for It’s crazy, ridiculous growth. And you have to keep up these completely unsustainable levels of growth that
I just don’t believe are sustainable at all for this corporation. Okay, peloton, their latest earnings. They were amazing. Okay, sales search 172%. Now remember, analysts are expecting this upcoming quarter sales to grow 200 and almost 80% Okay, so expected to really accelerate even more sales.
All right, and they said they expect strong demand to continue into 21 we’ll see how that turns out. I think front half Yeah, I could. I could see that for the fiscal year. 21 the front half Yeah, but it’s the second half then I’m really thinking about remember peloton, they sell very expensive equipment.
It’s not like this stuff is cheap, okay, there’s not like everybody out there can just afford this. There are different things which are made basically like bikes and like treadmills, okay, usually run from like 2000 or like $4,500 or so. Okay.
You know, this isn’t a mass market product. Okay. I mean, there’s some people there’s a lot of people out there that can’t even afford like, you know, an installment plan at a gym or something like that, or like getting started gym, never mind paying 2000 or $4,500.
For one of these bikes, or treadmills that for a lot of folks will end up collecting Dostoevsky is going to be honest. Okay. But now let’s get into one really big thing.
Okay, and this is massive and I think this is one of those things that’s going to cause Wall Street to flood out of this stock when it starts turning the wrong way okay look at this this is out of their latest earnings peloton also has proven that it once it hooks a new customer they tend to stick around average net monthly connected fitness churn was point seven 5%.
In the latest period, and it’s predicting fiscal 2021 churn will remain under 1%. So this company has essentially this belief or this like like past track record that their churn rate.
So in terms of like they somebody, you know, pays, you know, let’s say $3,000 or $4,000. For one of these, they go ahead and they get on the subscription plan, okay. And basically, this is like this expectation that churn will stay under 1%.
Okay, that’s what people expect out there. What I believe is going to happen is as gyms open back up, and some of these people just realize they don’t really use these devices, I believe they’re gonna start to cancel subscriptions in that churn rate is going to go much above 1%.
And when you’re used to always basically telling folks churns under 1% tossing Your turn, your churn rate starts going higher and higher and higher and higher and higher and higher higher. Remember, protons attract a lot of people that aren’t even necessarily super about the peloton brand right?
Or like we’re looking super forward to this there’s just like people that are like we need to work out somehow. Oh, peloton, I saw the commercial for it. Let me buy that. So those people are much more likely to churn Okay, and basically cancel their subscription.
If that happens. peloton is also in a situation where they haven’t to explain to investors Oh, yeah, our churn rate just was 1.5%. Our churn rate was just 2%.
Our churn rates 3% investors are freaking out and they’re like, Oh my gosh, like people are canceling subscriptions. Is this even a good business model? Is this a sustainable business model? This is what I believe will happen with peloton over the next year or two.
Okay, so look for a big churn uptick in the second half of 2021. In my opinion, I think it’s going to go well above 1% I think the company’s going to do everything it can to try to keep it under 1%, even if that means downgrading plans, and haven’t like trying to put the best deals ever out there.
But I don’t think it’s going to be sustainable. It’s like putting bubblegum in a dam that’s leaking water in my opinion. That’s what it’s going to end up being in the second half of 21 in going into 22.
And this stock reminds me of some old like, like two old stocks that were really hot companies like five years ago, four or five years ago reminds me a lot of these companies, Fitbit and GoPro Oh my gosh.
It reminds me a lot of these companies to companies that were obviously hurt very bad by competitors and also just the fact that their market is somewhat niche as peloton market is somewhat niche.
Not everybody can buy a 3000 $4,000 bike or something like that. Okay, and Fitbit and GoPro obviously there’s a certain segment customers that like their devices, but at the end of the day, they’re nice. Okay, and remember.
GoPro was a super high flying stock, like shortly after its IPO shuttle we up to was over $90 a share at one point, okay, Yahoo Finance, if you go on there, it has it at like 87 but it was over 90. At one point GoPro stock was okay.
Today, they’re still public company and they’re $6 a share. Okay, obviously, we know we know how that story turned out fit that this was another high flyer look at this stock in 2015. It was $45 a share and they had to get bought by Google for like I don’t know $6 a share or something around that price.
Needless to say the company’s not even public anymore. And they had to sell out for you know, just a joke price compared to where that company was trading at its highs because people were so excited about the stocks and they believed like, you know, I don’t know everybody was gonna have a Fitbit or everybody was gonna have a GoPro and obviously it was unrealistic.
The growth those companies have Okay, and when it comes to peloton, you look at competitors I see more and more peloton competitors by the second Okay, they’re popping out anywhere and they’re gonna undercut peloton is pricing.
And so which is going to make it even harder for peloton to attract some customers who were maybe more on a budget who were like maybe I’ll trade up to a peloton or maybe I’ll just get this other one that’s just as good or in their eyes just as good for let’s say 12 $100 or something like that.
Or $2,000 versus maybe a peloton is more expensive than that. So like I’ll just get this Believe me okay? The Chinese knockoffs and and all these companies are going to be producing these bikes in mass as well as the treadmills and everything across the board.
And they’re going to use all their marketing dollars to plow back into the business and to try to grow it obviously. And it just makes for an ugly situation.
Look at all the money that’s being raised out there for peloton type competitors. You see it everywhere over the last year or two. This company raised 100 million this company raised 100 million. I mean all these peloton competitors have been raising money in VC land like crazy because people have seen what happened with peloton and its massive valuation like man, I want a piece of that.
I want to grow a company to have 35 or $40 billion valuation like peloton has peloton has a bigger market cap here today than I believe like General Motors and some of those you know like big huge corporations and things like that like.
It’s amazing it’s absolutely amazing and the competition is going to come more fierce than ever in the worst part is I think it’s going to be a shrinking market over the next few years as you know Ronnie becomes a thing of the past and people get back used to go into gyms and things like that again Okay, risks now what can go wrong for me in this position
Okay, the first thing is I’m wrong like let’s just say I’m wrong maybe I’m wrong and peloton continues to grow like like they continue to beat analyst numbers essentially, let’s say they they beat this this coming quarter.
And also they you know grow more than 100% in the next fiscal year and the company just continues that be a growth bs they continue to keep churn rate under 1% over the next year or two.
Like I could just flat out be wrong with this. And that’s obviously a risk okay? The second big red is that I’m actually right about this and everything I believe in plays out peloton starts missing numbers, the churn rate starts increasing over the next year or two.
And everything just you know, kind of gets worse for peloton, but maybe people keep buying the stock or they don’t sell the stock or something else becomes a focus. It’s like, well, they were really profitable this quarter.
So they’re gonna be, you know, much more profitable, like, like, you never know, there’s been plenty of people that have shorted stocks over time. And they were right.
But they still ended up losing money on the move because people just kept buying in and kept buying in that stock or the market just pushed up like crazy and kept pushing up any stock in you know, peloton could be that stock K, so it is his potential.
I’m wrong in this situation as potential I’ll be right and people just don’t sell the stock and they just continue to buy. Okay, now I have to go ahead and limit my risk in this position.
Because remember, when you’re shorting a stock, you have unlimited losses, okay, unlimited losses, like, you know, technically a stock could go to infinity. So you know, you could you could have technically unlimited losses. When you short a stock versus we buy stock, the worst case scenario is that stock goes to zero, right.
And hopefully, if you are looking at balance sheets, profitability, things like that, that never happens. But that’s worst case scenario, but shorting losses or are unlimited. So I have to define my levels of risk, how much risk Am I willing to take out there, okay.
And so here’s what I’m looking at, I’m looking at 100, if the stock goes to 170, or over, I’ll probably cover my my shares and take my loss. And in crime, I’ll say, shorting Allah, so much money, oh my gosh, okay, so that’s probably where I define my risk there on the upside.
And also on the downside, I would say I probably cover around $60 or so maybe I’d ride this one to like $50, that would be a potential. But you know, let’s just say 5060 range somewhere in there.
If I can make over 50% on this position, over the next say, 612 months, something like that, I’d probably cover my shares, I’m not going to try to ride this one, believing it’s going to go to zero or something like that, I think that’s a, that’s a just not a good game to play. Let’s just put it that way, a lot of shorts, try to do that.
And they’ll try to short a stock to zero or they try to maximize every penny they can get out there, like it’s gonna keep going down. I’m not trying to play that game.
I’m just trying to basically bank on the fact that I think the stock is gonna fall dramatically over the next I don’t know, six to 12 months might not follow this week, it might not fall this month.
I believe over the next 612 months, it will fall a lot and I want to capitalize on that as well as obviously, you know, you get a little experience with shorting the stock and what it’s like to do that okay, now am I willing to short more of the stock is obviously a very important question.
And the answer is no, I am perfectly good with what I have short I’m not interested in adding to that short so let’s say it goes to $140 I’m not going to short even more something like that like I’m perfectly fine with where I’m at with this peloton short position.
I’m good not interested in shorting any more hope you guys enjoyed this historic video here today the first time taking you along in this journey the first time I’ve ever shorted a stock in my entire life.
So I hope you guys really enjoyed this if you don’t mind smash that thumbs up button helps out the YouTube channel in a massive massive way I appreciate each and every one of you and if you want to go ahead and chat about stocks with a ton of other.
Investors out there you could do it in stock up that is the first link in the description down there and hey maybe we’ll even do like set up I don’t think we have a peloton tab yet maybe we’ll we’ll start a peloton stock tab so the shorts and the Long’s can battle it out in there every day and then you know the
Long’s can say why peloton is we go into $100 billion market cap and the shorts can say why it’s going to a $3 billion market cap you know a little little battle maybe we can get going in there. But thank you for watching and have a great day.