On the 20/Dec/2020, I received an email from a subscriber, part of which I was asked “If you could own just one tech stock under $20 which one would it be?”
There are many promising technology stocks under $20 at all time and at that time I replied with a recommendation of tech stocks that I believe will take off long term.
And just before I typed the last paragraph of my reply, I added that “Ocean Power Technologies is a stock I recommend you keep an eye on, it’s currently under $10, because I expect the renewable energy sector to grow significantly next year. So keep an eye on Ocean Power Technologies. I still have issues with it’s financial, however I’ll give it two quarters next year and see how it performs.”
Weeks later I took a ‘small’ long position on Ocean Power Technologies (OPTT), fundamentally to enable me keep a ‘very close’ eyes on the stock.
As renewable energy stocks got more popular and attractive, I watched OPTT rise week after week, then something happened.
Yesterday (21/01/2021), OPTT rose 24%, trading volume spiked significantly, and I got an idea: Short this stock.
Back in December I wasn’t satisfied with the valuation of the stock and its performance as a business, what in The Name of the Stock Market will make me be okay with a valuation that 2x while performance remained the same? Nothing.
Seeing that trading volume spiked unusually high, I knew something was smelling, pump and dump was smelling, I looked at my reserved cash (which was over 30% of my portfolio) and jumped over to the other side of the trade. And the jump was a massive jump.
Before the market closed yesterday, the stock had dropped more than 10% from a 24% high. I covered my short position and added an easy 10% to my reserved cash.
Today (22/01/2020), the stock spiked again, this time up to 12%, hungry for more, I took another short position.
Greedy!
The stock is now up 33%. The short squeezers were on their A game today. Turns out a similar party was going on another street (GameStop).
Nonetheless, the stock kept spiking and I keep increasing my position, trading volume spiked from an average of 8,160,037 to over 45,000,000.
I’m in…
Ocean Power Technologies (OPTT) is rising non-stop. And I’m losing lots of money non-stop, even as I continue increasing my short position.
It’s no longer about the company’s fundamentals …
It’s now a trading war …
Long Vs Short
And I’m currently on the side losing the battle.
However, for a company like OPTT, one thing is certain: It’ll eventually fall hard when the pumpers run out of steam.
At least I hope so.
Henry John is a Stock Portfolio Manager that focuses on companies developing cutting-edge technologies.
Keeping track of cutting-edge techs, companies and stocks is what I do almost everyday. And I love it. Whether it’s artificial intelligence, 5g, or autonomous vehicles; I’m all in.
I’m a self-made millionaire who made most of his money investing in technology companies while working in finance.
Yes! I owe it all to tech and finance.
4 thoughts on “I Shorted OPTT and currently lossing the battle”
I believe Paul Mampilly currently has OPTT on his list of long term investments likely to pay out exponential returns in 3-5 years, but I don’t know what his reasoning is. I have a small position but all my positions are pretty small lol.
Happy to know that your long position in OPTT is paying off massively, even if the reverse is the case for my short position on the stock.
Try finding out what his reasoning behind holding OPTT for the next 3 – 5 years is. It’s the least you can do as an Investor, don’t just follow blindly, if a stock is going to make it to your portfolio you got to know why.
Happy to hear from you.
Cheers.
haha actually I bought it based more on your assessment in an earlier article, and pulled the trigger when I saw Mampilly was on board too. I would love to say it’s paying off massively – and statistically I guess it is – but doubling a few bucks is still only a few bucks. There’s a lot I’m still learning about analyzing a company, so I listen to people who have a better grasp on it while seeking second and third opinions. I guess I would say I do my research that way, because if I only relied on my own analysis of the numbers…? lolol then I’d really be investing blindly. For the small amount I’m willing to put into small caps, I’m okay with getting stung a few times in order to learn the ropes. But, I’m the type to learn more from mistakes than from success, so I’m keeping the stakes pretty low while I learn.
That’s a great way to get going. I think the peril of any investor is to think he/she knows it all and there’s not more to learn. There’s always a lot to learn, even for Warren Buffet.
I expected renewable energy stocks to take off this year, but my God, I didn’t expect them to take this fast and big.
OPTT is up more than 100% YTD and GEVO is taking off like crazy.
There’s so much excitement around renewable energy stocks, and I’m beginning to get worried.
I think it’s safe to say that we’re now in a renewable energy market bubble.