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Zombie driver meme5/16/2023 ![]() “Peloton’s issues are well telegraphed – given the stock’s decline over the past year – but investors may not realize that the company only has a few months’ worth of cash remaining to fund its operations, which puts the stock in danger of falling to $0 per share,” he wrote. Trainer also has a negative opinion of Peloton’s The company recently gave fiscal fourth-quarter and full-year guidance that were below analyst expectations. GameStop and AMC Closed Higher Too.įreshpet’s stock has fallen 41% in 2022 and over the last 12 months, its shares have tumbled 65.5%, compared to the S&P 500’s 10.1% decline over the same period. See Now: Carvana Is Acting Like a Meme Stock. “Freshpet has grown the top line at the expense of the bottom-line, and sales growth has driven more cash burn.” “Freshpet’s stock surged during the pandemic, as investors ignored the company’s years of cash burn, and now, investors are finally waking up to the dangers embedded in Freshpet’s stock, which could decline to $0 per share,” he wrote. However, even with its year-to-date declines, Trainer thinks the stock has more downside.Īnother zombie company is pet food maker FreshpetĪccording to the New Constructs CEO. New Constructs put Carvana in the research firm’s “danger zone” in August 2020 and Trainer notes that, as a short, it has outperformed the S&P 500 by 95% since then. In April Carvana reported wider-than-expected first-quarter losses, citing a “uniquely difficult environment.” Last month Carvana also announced plans to lay off more than a tenth of its staff.Ĭarvana is heavily shorted. Shares of the used-car retailer have plunged 88% in 2022 amid downgrades and losses, surpassing the S&P 500’s SPX 20.5% decline. “Since 2016, Carvana has burned through $8.3 billion in FCF (free cash flow).” “Carvana has failed to generate positive free cash flow in any year since going public in 2017,” he added. “dwindling cash supply, intense competition and elevated valuation,” which put the stock in danger of declining to $0 a share. Specifically, Trainer highlights Carvana’s See Now: This star hedge-fund manager says some major tech names are now value plays, as he shorts one meme-stock favorite ![]() This, in turn could further squeeze liquidity and create an escalating series of corporate defaults. “At the same time, many companies face declining margins and may be forced to default on interest payments without the possibility of refinancing.”Īs so-called zombie companies run out of the cash needed to stay afloat, risk premiums will rise across the market, according to New Constructs. “As the Fed raises interest rates and ends quantitative easing, access to cheap capital is drying up quickly,” writes New Constructs CEO David Trainer, in a research note released Thursday.
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