GSX Techedu Inc. (GSX)
(www.tradingview.com/x/4ho1JMoX/)Status: open 03/06/2020
Idea: selling company shares through the purchase of Put options
Expiration Date: 12/18/20
Strike: $15.00
Target price: $1
Max open price: $350
Option target price: $1400
Profit factor: 4
Position volume: 5% of the Deposit
(www.marketwatch.com/...ion/GSX#X1820D150000)Description of the idea: According to Citron Research, there are reasons to believe that the company's reporting is incorrect. The first good reason is overstating revenue by issuing vouchers to employees and in fact artificially inflating it. Data on search engine queries shows that the number of requests for information is decreasing, which cannot be compared with the alleged growth in the number of users in the volume that the company reports. A number of US law firms are already beginning to collect class-action lawsuits and are preparing to file claims against the company, which could lead to the same collapse of the company's shares that occurred with a Chinese company that also falsified data (Luckin Coffee (LK)) and was delisted from the Nasdaq exchange.
(www.tradingview.com/x/4ho1JMoX/)Status: open 03/06/2020
Idea: selling company shares through the purchase of Put options
Expiration Date: 12/18/20
Strike: $15.00
Target price: $1
Max open price: $350
Option target price: $1400
Profit factor: 4
Position volume: 5% of the Deposit
(www.marketwatch.com/...ion/GSX#X1820D150000)Description of the idea: According to Citron Research, there are reasons to believe that the company's reporting is incorrect. The first good reason is overstating revenue by issuing vouchers to employees and in fact artificially inflating it. Data on search engine queries shows that the number of requests for information is decreasing, which cannot be compared with the alleged growth in the number of users in the volume that the company reports. A number of US law firms are already beginning to collect class-action lawsuits and are preparing to file claims against the company, which could lead to the same collapse of the company's shares that occurred with a Chinese company that also falsified data (Luckin Coffee (LK)) and was delisted from the Nasdaq exchange.