Stamps.com is Dangerous to Own

Is Stamps.com a good stock to own? Not according to Famous short seller Marc Cohodes.

Famed short seller Marc Cohodes tweeted this about Stamps.com earlier today:

The Longs in will not know what hit them.. Let me work on first…

His latest short Canada’s Home Capital Group (OTC:HMCBF) are down 61% today.  Let me say that again, Down 61% today!

You can read his reasoning for shorting Home Capital in an interview with Vice.com here in this 2016 interview.

 

Can you afford to be long a stock the most famous short seller of the century has said would be next on his list?

You can bet your ass his tweet has not gone unnoticed by money managers and hedge funds that are long Stamps.com.

Visitors to Stamps.com’s website is dropping at an alarming rate.

Oct -18%

Nov -25%

Dec -27%

Jan -29%

Feb -23%

Although the declines in website traffic speak volumes here is another tidbit from underfollowed research report by PreScience Point Research Group from July 2016.

STMP has been non-transparent with shareholders, inadequately disclosing how it derives the majority of its profitability and the likelihood it could disappear; Wall Street analysts have no clue about how STMP is actually generating the majority of its financial results (STMP consistently obliterates Wall St consensus estimates), or that the aforementioned earnings stream should not be capitalized with any real multiple. As a result, STMP has been successful in its efforts to inflate its stock price beyond reasonable measure. Based on our analysis, STMP is worth ~$15 per share, ~80% below current trading levels.

Cohodes went public with his short STMP play around a month ago but hasn’t revealed much on his thesis behind the play. Expect that to change soon as he clearly made his point with Home Capital imploding the last 48 hours.

Stamps.com has been under attack by short sellers before.  So shorting this one is only for those that can take the heat.

Bottom line Stamps.com is an avoid at all cost.  For the more risk averse who want to ride with a famous short seller who is on one hell of a run right now, this stock is a short.

 

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