My thoughts on purple
So I’ve received a lot of DMs regarding my thoughts on purple. Their earnings release is today at 5pm eastern.
I don’t know what is driving the sell off over the last two days, but I believe it’s just the broader market and “stay at home” stocks being hammered. For those asking what the best plays are, here is what I’m doing.
Selling 25.00 puts Selling 30.00 puts Buying shares, selling 35 covered calls Buying leap spreads, 25/30 and 25/35
Here are the risks:
This is the last quarter where there will be a warrant accrual.
We are still in a pandemic
Their second factory is coming online and might drive losses.
Here is the bull case:
New machine capacity
There was no shutdown this quarter
Purple increased pricing of their beds by 3-4%
Purple is hiring like crazy over 100 job posting still
Purple expanded into Canada
Purple bought a hopefully lucrative licensing deal from the founders.
Be cautious, save some gun powder, and as always, do your own research.
I’m guessing they do about 194m in revenue and their gaap eps is about 15 cents. Adjusted will likely be 30 cents+
Submitted November 10, 2020 at 06:44PM by dhsmatt2
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