Clubhouse Media Group CMGR S
February 10, 2021 - 11:35am EST by
bigvic
2021 2022
Price: 11.40 EPS -.05 -.1
Shares Out. (in M): 93 P/E Not meaningful Not meaningful
Market Cap (in $M): 1,056 P/FCF Not meaningful Not meaningful
Net Debt (in $M): 0 EBIT 0 0
TEV (in $M): 1,056 TEV/EBIT Not meaningful Not meaningful
Borrow Cost: Available 0-15% cost

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Description

This is a very timely short and there is not a lot of borrow out there.

This is also a very unique situation that is driven by retail investors (Redditors, day traders, etc.) buying previously illquid stocks that they don't truly know with the belief the stock will increase in value because someone smarter / richer / more successful than them likes this stock.

In this case, CMGR is a Gunagxi, China based media company that has gone up 6x+ YTD because it has the word "Clubhouse" in it.  Clubhouse as a name is important because Elon Musk, tweeted recently about how he was going to use the app:

https://twitter.com/elonmusk/status/1355983231988862978?lang=en

However, the Clubhouse that Musk references is not CMGR but rather a private tech company started by Paul Davison and Rohan Sheth, 2 individuals that are based in the SF Bay Area.

We've seen this story many times where name confusion is almost the perfect short (there's probably no perfect short because shorting is just so hard anyways) and CMGR falls directly into that camp.

The other recent precedents of shorts that have worked that fell into this camp are SIGL (Musk tweeted about using Signal and SIGL, which is unrelated to the Signal that Musk tweeted about), skyrockted from <$1 to $40 in Jan 2021.  It has come down to $3 today.

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.

Catalyst

*When the day traders recognize that Clubhouse referenced by Musk is not CMGR

*If there is selling, retail investors will likely also sell as well given they don't know CMGR's fundamentals

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