Shares of Tilray (TLRY) have now spiked up by more than 10x from its recent IPO price.  The reason is simply that the short interest became too high relative to the float (likely hitting as as much as 80% or more). As always, the Tilray ”infinity squeeze” caught everyone by surprise. It always does.

In this report, I first illustrate the numbers which sparked the Tilray squeeze.   I then show how and why infinity squeeze potential appears even more extreme at Revlon (REV) than it did at Tilray. This is specifically due to recent changes in ownership and short interest,

The float has always been very tight at Revlon, with billionaire Ron Perelman already owning over 84% of the company.  A standstill agreement which precluded Perelman from taking his stake to over 90% of Revlon just EXPIRED over this past weekend.

In recent weeks, Ron Perelman has continued his purchases of Revlon, acquiring an additional 293,943 shares, above his earlier 84.65% stake paying up to around $21.00.

The next two largest shareholders (Mittleman Brothers and Alberta Investment) have now acquired a total of 791,931 additional shares, further reducing the float. Mittleman has made clear in public filings that he has no intention of selling for years.

Against that, the short interest in Revlon has gradually increased from 1.8 million shares to 2.7 million shares since April.

As a result, the total shares remaining in the tradable float is now down to 2.68 million shares but short interest is over 2.7 million shares.

Mittleman has stated in SEC filings that the fair value for Revlon could exceed $50. This is why Perelman is expected to buyout the remainder of Revlon.

For those who haven’t noticed, the squeeze has already entered its early stages in recent days. 

This report is the opinion of the author. It is not a recommendation for anyone anywhere to do anything at any time. Do your own research, form your own opinions. The author is not an investment advisor. The author may conduct transactions on various securities mentioned in this report (or on securities of competitors of other comparable companies, securities etc.) within the next 72 hours. The author is long REV.

Bitauto (BITA) is a heavily shorted, low float stock but there is far more to the bull case than a simple short squeeze. As with my long report on RH in the $80s, this report will attract vocal critics. But by the time BITA hits $100 I expect these critics will have long since gone quiet or found more suitable employment. My view that “BITA rises to $240” is not overly optimistic. In fact, it may prove to be too conservative. Read this report first and then simply decide for yourself if BITA could comfortably exceed $17 billion in market cap in the near future. To me, the answer is a very obvious “yes”.

Short interest in BITA has quietly risen to 11.4 million shares. But because the float numbers are not pulling into Bloomberg, most hedge funds are unaware that this now amounts to 80.5% of the tradable float. BITA recently announced a $150 million share buyback which could now reduce the float to well below 11 million shares. The short interest would suddenly exceed 100% of float. BITA has $1.4 billion of cash sitting on its balance sheet to execute a mere $150 million buyback. The buyback was stated to be within the next eight (8) months.

BITA has deep backing from the biggest tech giants in China, including Tencent, Baidu and Their familiar descriptors “The Facebook of China”, “The Google of China and “The Amazon of China” are well worn clichés but they are both accurate and highly relevant to BITA. Their ownership and involvement in both BITA and its largest subsidiary Yixin (HK 2858) is far larger and far more involved than the the market realizes. More than 80% of BITA’s tradable float is now gone and they already own roughly half of the Yixin subsidiary. The tech investors acted as a group, purchasing together via a large special purpose vehicle (“SPV”). They are insiders and their shares cannot be easily sold.

BITA’s founder and chairman William Bin Li also happens to be chairman and founder of electric vehicle maker NIO Motors. NIO is slated to come public on the NYSE within months in a $2 billon IPO which would value NIO at $15 billion. By 2020, NIO has stated that it will be selling electric cars in the US in direct competition with Tesla. More recently, Mr. Li was also appointed as chairman of Dida Chuxing AKA “The Uber of China”. Mr Li is currently owns over 10% of the outstanding shares of BITA. Mr. Li is very visibly employing the same tactics and technology approaches used by Apple and FB to conquer all market share in each of his multiple businesses.

With RH, it was “capital structure engineering” that took the stock from $20 in 2017 to $160 in recent weeks. RH was an “8 bagger” from its lows despite its visibly weak fundamentals. The upside with BITA is vastly greater than what we saw with RH, for two reasons. First, the capital structure engineering is far more aggressive with BITA than it ever was with RH. This includes the same sequenced tactics seen at RH: leverage, float reduction, equity/option grants and a share buyback, all coupled with an announced expansion plan.   Second, in contrast to RH’s weak fundamentals, the business prospects and cash generation for BITA are extremely strong. This can be clearly seen by comparing BITA to its competitor Autohome. BITA is now rapidly surpassing Autohome in revenues and growth. Yet Autohome is valued at over $12 billion. The only reason for BITA’s bottom line weakness is that it continues to spend aggressively to secure even more growth. This expensive land grab tactic is exactly what Facebook was doing at the time of its IPO in 2012, and its shares were similarly pummeled down to $17. FB currently trades at around $200.

The auto market in China continues to be one of the largest, fasting growing and most profitable consumer segments in the world. This is why BITA continues to grow revenues at over 50% per year for the past five years, even while keeping gross margins steady at 60-80%. The partnerships with the Chinese tech giants goes both ways. Not only are they eager to secure a piece of BITA’s fast growing penetration into this market, but they are also actively sharing their own mass targeted data with BITA to fuel BITA’s growth even further.

This report is the opinion of the author. It is not a recommendation for anyone anywhere to do anything at any time. Do your own research, form your own opinions. The author is not an investment advisor. The author may conduct transactions on various securities mentioned in this report (or competitors, comparable companies, other securities etc.) within 72 hours or at any time thereafter. The author is long BITA.

Much of the information in this report appears to have been entirely missed by the market. Only 5-10% of Revlon’s shares are in the public float. Only a single analyst covers the stock with only very perfunctory coverage. Revlon’s latest 10Q (May 2018) contains a subtle seven-word change from what was disclosed in the 10K in March. This disclosure now signals that Revlon is gearing up to conduct “asset transfers”, stripping bondholders of collateral so that Revlon can raise between $500 million and $1 billion to ramp up its turnaround program. Such a move is punishing to bondholders but will be sharply rewarding to shareholders because it demonstrates that billionaire Perelman is now entering the final stages of taking Revlon private.

J Crew had made use of a similar “trap door” feature last year to strip bondholders of collateral by shifting IP assets into unrestricted subsidiaries. But Revlon’s ability to move assets to the benefit of shareholders is far, far greater. According to Debtwire: “the trap door mechanics in Revlon are a bit different from J.Crew’s. Revlon’s trap door is more like a black hole.”

Perelman is unequivocally betting on a successful turnaround at Revlon. But he is also using the turnaround plan to acquire his new shares near multi year lows. In 2017, Perelman increased his stake in Revlon to 84.65%, paying up to $23.50. But many of his shares were acquired near multi year lows simply because his turnaround plan front-end-loads the expenses, pressuring the share price.

Right after the about-face on disclosure regarding asset transfers, Revlon immediately appointed Perelman’s daughter (Debra Perelman) as CEO.

Perelman already owns 84.65% of Revlon. In September 2017 he agreed to a standstill at the request of Mittleman Investment, the second largest shareholder. But it was later realized the standstill to which Perelman agreed does not preclude him from making a tender offer in the interim.

Perelman has repeatedly engaged in the same tactics to acquire past companies at bargain prices following very short-term quarterly weakness in financial results which were the predictable result of a planned restructuring. Because Perelman already owns 84.65% of Revlon, the price he pays for the remaining 15.35% stub will not have a meaningful effect on his overall average price. So he can certainly pay a significant premium. Mittleman claims that current fair value should be from $50 to $100. But actually, market comparables would put the price target closer to the lower end of $40-50 at present. In reality, Perelman will attempt to acquire the remaining 15.35% stub as cheaply as possible. He may be able to acquire the final shares at $32-36.

However, due to Revlon’s very low public float and high short interest, the share price could easily overshoot on any positive update. Short interest is over 2 million shares even though the tradable free float is just 5.2m shares (a 40% effective short interest).

  • Pulse is scheduled to discuss “Operational Highlights” on a conference call at 4:30 pm today (Tuesday May 8th). In the past I have highlighted such calls which companies used to create very sharp price spikes. There are some obvious new developments emerging at Pulse.
  • Over the past year, critical developments with Pulse have now unfolded exactly opposite to what was required in the short theses. These developments now provide very strong support and clues for the near term LONG thesis
  • Billionaire Bob Duggan has nearly doubled his position and now owns 35% of Pulse. Duggan continued to buy even as the share price rose to over $28.00 (nearly 40% above current levels).
  • Many are unaware that three of the four newly appointed Pulse board members actually came from Duggan’s Pharmacyclics. That background information was included in in the text but not in the table Pulse’s proxy statement. Pharmacyclics was the company which Duggan turned around from a tiny $15 million market cap and sold to AbbVie for $20 BILLION just a few years later. These newly appointed Pulse directors are his lieutenants.
  • As Duggan’s lieutenants were installed at Pulse, other directors associated with MDB Capital then stepped down from Pulse’s board. This now frees MDB parties to sell without restrictions. These parties are now massively incentivized to see a near term spike in Pulse. MDB founder Chris Marlett owns 4.8% of Pulse. Certainly large enough to care, yet just small enough to be able to sell (on a spike) without requiring any disclosure.
  • Short interest has quietly spiked to the highest level in Pulse’s history, now amounting to 2.1 million shares. Fully 40% of the free float is sold short. Following a recent short report, short interest may actually be even higher.
  • Remember: Troubled fundamentals do not always equate to an attractive short trade. With Pulse, I have nothing positive to say about: the fundamentals, the technology or the parties involved. Yet I can see that the stock will soon head sharply higher. Similar to Energous (WATT), near-term triple-digit price spikes are in no way dependent upon near-term commercialization of the technology.
  • There are multiple strategic avenues which Duggan could announce now or in the near future. These include alternate FDA approval paths as well as new asset injections. Any of these should be expected to have a significant impact on the share price, which would then be sharply magnified by the 40% short interest and low float.
  • Such announcements could happen sooner, later, or never. But starting today there is a series of possible dates on which we could potentially see this happen. Regardless of one’s view of a long position in Pulse, a short position is now downright reckless.

This report is the opinion of the author. The author is LONG PLSE. The author may conduct transactions on various securities mentioned in this report (or on securities of competitors of other comparable companies, securities etc.) within the next 72 hours. 


  • As of December, short interest in OSTK hit 42%. Latest data will be released after market close today. Given recent activity, I expect short interest to hit 50-60%.
  • The key to the rising share price is understanding what is happening behind the ICO. The “optimal” size for OSTK share price is actually far less than $500 million.
  • Current investors in Overstock have obvious incentives to make moderate buys in the ICO, even moderate success will sharply boost value of their equity holdings.
  • Yet some investors reportedly unable to get confirmed to buy. Ask yourself why ? Token will then trade with limited liquidity on closed system via sole BD.
  • Engineering token price higher is simple and would leave OSTK with potential apparent value of multiple billions. The stock price will react accordingly.
  • “Dinner Table Effect”. Crypto assets spiked sharply after both Thanksgiving and Christmas. Traders expecting crypto assets to again spike very sharply on Jan 2.
  • In anticipation, traders, funds and algos may start aggressively buying crypto assets today. So GCAP may see abnormally strong buying pressure today.
  • “Let it ride”. With GCAP now at steep new highs, all recent investors sitting on large taxable gains. Refusing to sell until Tues defers taxes until 2019.
  • Even at $30 most rational investors would refuse to sell until Tuesday. This allows them to hold for further gains expected from sector on Jan 2 as well as show “window dressing”.
  • These sharp imbalances could cause a year end “super spike” in GCAP. Crypto stocks LFIN and FTFT recently spiked by several hundred percent in just a single day.

Traders from places like China and Korea are being forced off of their own domestic crypto exchanges but still want to pour money into crypto. GCAP now provides an easy solution. GCAP just added crypto products to its trading platform, BOTH long and short with 4x leverage. Much better spreads, liquidity, fees and reliability vs….

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