5/13/24 - $stne - guaranteed volatility... prefer sidelines
5/13/24 - vrockstar - i'm staying away from this even though the volatility is guaranteed. take a look at the 5/17 chain for $16P open interest. on one hand - i believe the large P vs. C skew is correct in the terminal
STNE
isn't a great LT own (prefer
DLO
or
MELI
, even
NU
) but it's still a marginal gainer vs.
PAGS
(which is the ultimate dog in the '24 context on my math). the bar for the quarter looks low and guides have been decent (they're idiosyncratic vs. US "tech"), so all else equal i think the pain trade here is higher first and then a slow realization in 2H. my sense is the P's represent the hedging paradigm of fintech getting murdered. the problem with buying this tap is that a miss could be varied, and if it's bad enough, you can't buy/ avg down and will be forced to take the L and move on. Equally, besides a crushing beat, I don't think it sticks. i am writing on this one more to document my own thoughts to myself as we go about 2H. i think the smarter play here is likely to short
PAGS
on this/ next Q based on the implication of
STNE
here. sidelines is probably the safest place here. upside s/b capped to $18/$18.5 all else equal - and anything above $20 i'd argue you could probably entertain a short. a massive dip here could probably be bought for a retrace, but i'd need something like 25-30% to be buying sub 10x PE with conviction which puts the stock closer to $12 (which i think is a low probability event - but not as low as historically esp in this wonky tape). will be watching on the sidelines w/ popcorn and jump in accordingly.
STNE
isn't a great LT own (prefer
DLO
or
MELI
, even
NU
) but it's still a marginal gainer vs.
PAGS
(which is the ultimate dog in the '24 context on my math). the bar for the quarter looks low and guides have been decent (they're idiosyncratic vs. US "tech"), so all else equal i think the pain trade here is higher first and then a slow realization in 2H. my sense is the P's represent the hedging paradigm of fintech getting murdered. the problem with buying this tap is that a miss could be varied, and if it's bad enough, you can't buy/ avg down and will be forced to take the L and move on. Equally, besides a crushing beat, I don't think it sticks. i am writing on this one more to document my own thoughts to myself as we go about 2H. i think the smarter play here is likely to short
PAGS
on this/ next Q based on the implication of
STNE
here. sidelines is probably the safest place here. upside s/b capped to $18/$18.5 all else equal - and anything above $20 i'd argue you could probably entertain a short. a massive dip here could probably be bought for a retrace, but i'd need something like 25-30% to be buying sub 10x PE with conviction which puts the stock closer to $12 (which i think is a low probability event - but not as low as historically esp in this wonky tape). will be watching on the sidelines w/ popcorn and jump in accordingly.