Sonos My Current Position: The current bar shows my position currently with Sonos, and what seemed great at the time, is quite a precarious situation currently. Originally, I shorted 4 PUTs far below market value and did well months before the war in Europe even kicked off. The stock price just barely touched down into my strikes, and while I could have closed the trade for peanuts, I was happy at the time to take assignment for 400 shares. That was then, and this is now. Very interesting how an economy can crush a rising blue-chip. Let’s look at the numbers of what that bar means from left to right: -5,359 (Unrealized P&L) -220 (Daily P&L) SONO (Ticker) 400 (Total # of Shares) 6,236 (Market Value) 28.98 (Average Price) 15.59 (Last Price Traded) -0.55 (Change) So, what seemed like great value at the time, is embarrassingly poor at present. The question is, how to correct this or mitigate these losses. I still am bullish on Sonos’ future here, especially after working for Sonos many years ago in the past. I also worked for Apple and have seen Sonos grow and follow into Apple’s footsteps. That said, I’ve decided the best course for me is to drop my average cost-basis down of the stock from ~19 to as close as that ~15.50 as possible. With a total position size of 400, I plan on purchasing 6 more round-lots to bring the total to 1,000 shares. Then, I may play the wait & see approach. Heres the thing, Sonos has had horrible earnings in their last report, and you can see the downward trend for a while now. At the moment they are no longer a profitable company, as inflation is just crushing the middle and lower classes right now. If I’m going to make a move, now that there is a noticeable drop seems to be a good place to get in. Sure, there may be quite some distance yet for Sonos to drop in price, in fact I even would bet on it, but I can not be 100% sure. I may just short 6 puts from here and wait… possibly on purpose to get assigned. That is an option (no pun intended). The other step of this trade, is to fund the purchase of 600 more shares. Let’s assume that share price will be around $15 for Sonos. I’ll need $9,000 to pull the trigger. Originally I thought on shorting PUTs on Coinbase, as the thing is so volatile that even super short strikes into single-digit territory will bring in massive premiums. Of course, you have to go out into LEAPs mode. The problem, is I don’t know if COIN will even be around that long the way they just lose, lose, and lose money. They are a kind of copy of HOOD… the only one purchasing them are dumb-retailers and Cathie Wood. A better bet, now that I think of it, may be to short PUTs on MicroStrategy. I don’t like the fact that it has already risen so much in value, but after going through the last earnings call, MSTR has done quite a bit of changes to eliminate any possibility of margin-calls, and also did further strengthening of their fortress. I may short PUTs out to the end of 2025, which will far surpass the next bit-coin halving. This SHOULD be a very bullish event, and I may just possibly close out the options sometime there-after to free up some more margin/risk. MSTR Chain: Summary: So that’s it in a nutshell. Get 9K in premium from MSTR, and push it into Sonos. I’ll probably set the strike of my LEAPs around the $200 level, and plan to pull in over 90 premium if all goes to plan. If the MSTR part of the plan blows up in my face, well, at least I will only have to purchase at $200 a share, and will have gained almost half that in premium, so it may not be that bad… (knock on wood) If SONO continues to drop far under 15, I may do another double/triple down plan to reduce my adjusted cost basis even more. Of course, I’m open to any reasoning as to why this is a totally stupid plan…
SONO chart nice mountain shape which peaks in mid-2021. Time for it to go into hibernation mode. Will it form another very tall mountain peak?
If people can not afford a car (even a used car), what makes you think they can afford a sound system? Bose is privately owned so you can't judge from them. I just skimmed the profile. Sonos deals with falling consumer demand The damage to Sonos stock was even more extensive, as share prices fell 23% in morning trading on Thursday. The maker of speaker systems saw big drops in revenue and income in its fiscal second quarter, which ended April 1. The hit to Sonos' business was severe. Revenue plunged 24% year over year to $304 million. Gross margin dropped 1.5 percentage points to 43.3%, resulting in a loss of $30.7 million. Even after making accounting-related adjustments, net income of $5.7 million on an adjusted basis was down nearly 85% from year-ago levels and worked out to just $0.04 per share. Sonos saw some other troubling signs, as free-cash outflows soared to $122 million and inventory levels rose 7% over the past three months to $326 million. Did the CEO exercise about $24,000,000. in options?? At what price...Diluted shares?? Panasonic has done nothing over the last 5 years. LG Display has dropped too. You could have great products, but no buyers. Was thinking of the drop of both computers and laptops...In the early 2000's, RAM and storage cost went south... Go buy a Gateway computer...I hear they're on sale!
you're digging yourself a hole of complexity my friend. Shorting downside convexity to fund a losing trade? That could be right out of the movie Dumb and Dumber. You're wrong. The trade didn't play out and the stock sucks. Cut the loss and forget about it.
Why are MSTR and SONO doing so badly? They have been on a downtrend since mid-2021. For swing traders, shorting now is not a good idea as you should have shorted them much earlier.
The 20+% drop in a single day in Sonos is exactly what I had been hoping for. I would like to hold onto it for the long-game, as I used to work for them and see a lot of up-side in their ecosystem going forward. This also goes back many years, and I've watched them grow and grow and out-compete just about everyone else in the wireless market. I used to even have casinos and big hotels come and ask me if there was a way to up our system limits so they could rig up each room with them. In any case, if there is one thing I have learned, is there is no such thing as efficient markets. So maybe it will pay off more in my favor to wait and (hope) that the stock price keeps falling even more. As a side-note, I tried to put in an order today on the MSTR trade. But of course the stock moved up quite a few points by market open, and didn't want to come down. I didn't get a fill at what I wanted and figure I may hope for a bitter deal from Mr. Market later this week. Though, the risk is that MSTR keeps shooting for the moon. I may be really making something out of nothing by trying to pinch dollars here, but I am already not happy selling insurance on a stock that I feel is already much higher than where I feel secure at.
Marriott and above, I could see it in their hotels. Wyndham Hotels (WH...Which I use to follow [own]), I don't see it. A fridge, shower, and a TV works fine for those people (me). Yeah, a cheap breakfast...But people are tight with their money. Are you old enough to remember when first a microwave, then a fridge, then free WiFi went in the room?? In the future Las Vegas; Raider, Golden Knights, A's...I can see people flying in on Allegiant. Many will stay at resorts...It's a given. But others, may stay at a Super 8 (or friends/family's house)...Walk the strip, drop a few dollars, catch the game, then fly home. Do you "need" this on a cruise ship...At home?? Who gets to service this puppy when it goes out or has problems?? How often have you gone into a hotel/motel and their wifi is down?? The clerk doesn't know how to repair it...Double that with speakers!! Great products, but bad timing...
Agreed. But for someone who wants to hold (forever), isn't it great timing though? I want to accumulate, not sell here. I watch daily as people who can't even afford it, are using credit cards (still) just to buy the latest iPhone when their previous version is still working fine. And people get locked into the Apple ecosystem, which we all know is over-priced. Sonos has its own ecosystem that locks you in somewhat... once a household gets one speaker, they end up decking the rest out with the same system. So far, there is no real competitor... so it's a monopoly/strong moat (for now). Maybe Apple will buy them out, it's a real possibility. In any case, here's another plan. Instead of buying 6 round-lots, I scale in at just 2 round-lots for now? Then wait and see... I've been thinking: Not too long ago during the epic tech-wreck, I was forced to take assignment (very early assignment) of Netflix during their historic crash not too long ago. The same one where Ackman also got butchered up into. Damn price imploded multiple deviations right down to 240 or was it 220 territory? I've held onto that one until it's re-gained back up to the 330 level where my average cost basis is. I could short a covered-call, for around 3K at a strike around 570. Then that 3K can buy me 200 Sono shares at ~15. Then I sit again and wait & see for a bit... I sense I am going to get the "This is still dumb", but "Less dumber than before"?
So why can't Mainland China duplicate (steal) and sell this product?? Is it produced in China? Could Dolby, Bluetooth, Apple, and Amazon squeeze them in any way?? For the right price, would Amazon what to buy them?? It looks like big bucks to repair such a small item...If it can be done at all. Was thinking back to college...In one class this was required reading!! https://www.googleadservices.com/pa...uqu_Pj-AhXTCTQIHQAhCXcQ9aACKAB6BAgCECE&adurl= Maybe people will go back to it...
@Cabin111 Zen and the art of Motorcycle Maintenance: ... Well, I can't say I am that much into Motorcycles, so I'll give it a pass. However, one book I am willing to get into (some day) is Investment Biker by Jim Rogers. Mostly because Phil Town has said it was one of his favorite books, if not his favorite to read. So that has me thinking somewhat. I may also check out his other book "Adventure Capitalist". Funny, I actually have the silly clicker game by that title! --- With that out of the way, it looks like MSTR lost quite a bit of its gains from yesterday. Maybe if tomorrow this continues, I can get a fill near where I want.