Institutional selling to come
$Chagee Holdings (CHA.US)$ My projection: (a) Unexpected dividend led to short-covering. Don’t think there was much fresh investors (b) Institutional analysts take a day or two to issue reports. Given the poor results, they have to lower their forecast. They will highlight the dividend is one-off. Some will even be negative on the dividend, citing the money should used to be open more overseas store. A dividend payout so soon after IPO may lead to suspicion that major shareholders have pledged their shares for loans and need the cashflow. Another key fundamental question: Will the price war lead to domestic franchisees losing money and quiting the franchise, and leading to negative store growth? (c) Institional inevstors will be placing their orders on Monday/Tuesday/ Wednesday. Those who long should be biased to sell. Those looking to buy are likely to wait for proof the price war will abate. In other words, more marginal sellers than buyers (d) Net-net, I feel frustration and uncertainty. Once the stock turn down, the sellers (not necessarily short-sellers but also unconfident holders long) will pile in fast to sell.
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Wasabili Low : Sofa + popcorn~
Sounds very professional, worth following up on.
Looking forward to your continued feedback on CHA
Wasabili Low : In your opinion, is there still an opportunity for a pullback to allow me to make up the position?