tuscl

PSA: Shorting RICK Stock

Wednesday, September 11, 2013 6:49 AM
For anyone looking to short RICK stock it appears that Fidelity is able to lend shares, but you will need to pay interest. (I am personally long 2000 shares, at the moment, and looking to add 2000 more if it gets down into the $10.50 so don't think it's a good idea to short this one. Just trying to help out anyone looking to play the other side, since a large short interest would definitely be in my interests. Also my conviction in this long is much lower than when we were back around $8.80. I say 60% it continues up; 40% it craters.) What other brokers are able to borrow RICK stock for those looking to short?

60 comments

  • Dougster
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    11 years ago
    Also able to short it on E-Trade, and they don't mention needing to pay interest.
  • tumblingdice
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    11 years ago
    Dougster,take the money and [view link]'s not like Rick's is Sears when they had land holdings.And any CEO that has a jet with only 24 clubs is a recipe for disaster.
  • Dougster
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    11 years ago
    @dice: Yes, I'm thinking the recent move is because someone is accumulating with the goal of replacing that fuckhead CEO. Did the summary judgment in the lawsuit scare the buyers off, or are they just stepping back for a lower price to start accumulating again? Going to watch price and volume to see... Only got 8% of my portfolio in it anyway. Mostly just for fun anyway.
  • DBJP101
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    11 years ago
    While a short squeeze may help you, it would still take a huge position even for a micro cap stock. Unless there's a fool multi-millionaire using this site for advice, I don't see how this post could benefit your position. I haven't done a rigorous fundamental analysis of the company, but unless Rick's has superior management and/or cost cutting strategies, I can't justify the current valuation. Unless the acquisitions used to fuel growth are using a P/E multiple under 12, how am I hitting my ROI? And if you feel Rick's doesn't have superior management, what's the point of trying to 'scale' the business? Interesting that they are now also trying to get into the competitive breastraunt business. I tried out the one and Dallas, and it seems like a disaster waiting to happen. Just my .02
  • zipman68
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    11 years ago
    DBJP101... Dude, this site is loaded with multi-millionaires and billionaires. Can't you tell? Juice/TDHQ/BigTuna1/LordxBetty/etc. is actually Warren Buffet. I'm Bill Gates (well...Bill pays me $100K a day to write shit as zipman, the name he always wanted to use as a kid, but he gives me big picture ideas of where to go). Brother Alucard is actually Elon Musk. I think the dude from twitter is also posting as a wacky pervoid too. So Dougsta is *totally* manipulating the market.
  • Dougster
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    11 years ago
    I beleive there are a number of very wealthy individuals on this board who could establish million or multi-million dollars positions short RICK and making a killing if it were to crater. All they needed was for me to tell them which brokers have shares to lend out. You're welcome you who are to make millions! :-)
  • DBJP101
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    11 years ago
    @Dougster lmao, I'll call my broker and put out a short order to help you out! Zip, with all these connections, we should just open our own clubs (or bring the club to the mansions).
  • tumblingdice
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    11 years ago
    I'm a trust fund baby.
  • toddq
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    11 years ago
    They had to close down their Las Vegas location because it was losing too much money. They are the ones who escalated the taxi kickbacks up to $100.
  • Dougster
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    11 years ago
    I'm out of everything this morning [view link] I agree RICK has absolutely terrible management. Couldn't get much worse. I visited their Phoenix club on a weekend night after visiting Bourbon Street Circus and the HiLiter and Christie's. Four customers in the whole place (a couple of whom gave off the pimp/drug dealer vibe). They couldn't even keep the stage busy, and management didn't appear to give a fuck! Only good thing I have to say about it is that the bathroom was keep in good shape.
  • rickdugan
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    11 years ago
    Let's see whether I end up being right about this, which I posted in another thread about RICK: "Smelling a little pump and dump market manipulation in the works. I suspect that anyone who bought in at $10 or higher is going to be sorry that he did." I had thought that we might have to wait for the next earnings reports for the stock to drop back down to rational levels, but at the rate its dropping we may not have to wait even that long. Whoever engineered this run up (and yes this was a clear case of manipulation) may very well be answering a lot of questions very soon. These abnormally high trading volumes are coming from somewhere and once they stop completely I suspect that the bottom is going to fall out on this stock.
  • rickdugan
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    11 years ago
    There was simply no rational basis for the stock trading up the way it did. The company's lenders know this all too well, as I'm sure do seasoned market analysts so you know that they weren't responsible. So who was behind this?
  • Dougster
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    11 years ago
    Who's responsible? Jews. Seriously, though, the market moves in mysterious ways. I still put it at 60% an investor was accumulating with the hopes of a complete takeover or just replacing the CEO and he is now stepping back to allow the price to drop before e continues to accumulate. 40% someone wanted to dump a large stake so they ran it up beforehand to get momentum chasers onboard to sell to. Has been happening since the beginning of time. We'll just have to wait and see which interpretation was right. Nothing so unusual here that I woul suspect foul play beyond standard market shenanigans.
  • rickdugan
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    11 years ago
    ^ It wasn't an acquisition/control move. Did you see those volumes? The company has less than 10mm shares outstanding. Any one investor who was buying up that many shares for control purposes would have had to submit a 13D with the SEC by now. The only single outside investor owning over 5% is Dimensional Fund Advisors, who has thus far claimed that their holdings are a passive investment. I'm not convinced that there wasn't foul play. They even had some bogus analyst on Seeking Alpha shitting on the computer screen in order to impress anyone who didn't know better. And who know what other rumors or fluff pieces were floating around out there. This thing stank from the word "go" and it still does. I smell a fast approaching bottoming out on this thing, which will only further confirm my belief. This stinks of market manipulation, which is indeed illegal here in the U.S.
  • Dougster
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    11 years ago
    Ok, that's a good point. If someone was trying to acquire it, or just gain enough to put pressure to oust the CEO we will probably hear about it soon. Eric has about 8% ownership, so would need something comparable if looking to oust him. If someone was really sneaky they might acquire just below the threshold so they don't have to report this time, and then, in the wave acquire another 5%. Getting 10% ownership would definitely be enough to put the heat on Eric. 5% of this one is about $4-5 million. Was that move and volume consistent with a move of that amount of money in? I was on vacation most of the time, so wasn't watching it tick for tick, but I bet there was were alot of upticks as well as down ticks, so it's hard to say. I'll have a look at the minute by minute charts tomorrow. I'll also see if I'm able to download the tick by tick data over start Aug 26. Another possibility is that an algorithm and/or trade just noticed the Seeking Alpha piece, and decide to run up the stock without there being an collusion. Computers and traders will generally be both buying and selling during a move, so it's quite possible they never had to get over 5% ownership. One thing I'm fairly it wasn't was a short squeeze since short interest in the stock was so low. Will be interesting to see what it is now! (That data is usually delay by a couple of weeks though.)
  • Dougster
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    11 years ago
    Here's a negative on Seeking Alpha regarding RICK. It's pretty short and summarizes the widely known strikes against it. [view link] The anecdote about the CEO getting into the business with so little of his own money is the most interesting part IME. I currently just watching to see if consolidate here around $11.60 or breaks down. I suspect it will be okay, and a negative piece of SA could certain give some who is accumulating a chance to pick up shares from those scared by the piece (even though everything in it already well known.)
  • rickdugan
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    11 years ago
    I read that piece. It was written by some 26 year old kid with little real world experience. Not bad as far as it went, but it was entirely unsatisfying in terms of meatier analysis. This sucker is on its way down. It may take the next earnings report to beat more sense into the heads of market participants, but it is coming.
  • Dougster
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    11 years ago
    I'm holding off until after the expected fireworks for the entire market tomorrow, but, if the market is okay, as judged by where we are on Thursday, and this thing holds above $11.60 then it definitely looking strong. I'm actually guessing everything will be A-Okay, but this is one of the few times in recent memory I can remember not have a strong conviction either way, and will wait and see. Should all be decided by the end of the week, no need to wait for next earnings. In fact, I don't think next earnings will make any difference, beyond a day or two, either way.
  • rickdugan
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    11 years ago
    I'm not sure where you are coming up with this "A-Okay" supposition. This company has some real problems if it is borrowing small amounts of cash at onerous terms. I still maintain my position that this stock is going to sink back below $10 eventually. What does the end of the week have to do with anything? It may or may not still be trading over $11 by then, but that doesn't mean a thing. The question is whether it is going to add long-term value for an investor's portfolio and I believe that the answer is a resounding NO. We'll see who is ultimately right I suppose. I'll revisit this in a couple of months and see where it sits then.
  • Dougster
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    11 years ago
    End if the week because the big fed meeting is tomorrow. if it still above $11.60 by then I reckon that if it was going to implode would have done so by then. Right now it's looking more like consolidation and volume is dropping. I'm also going with notion that price and volume and holding important levels is a mire important factor to consider than looking at the well known crappy balance sheet and earnings which are in the past. To me it's looking like people are aware of all that but want in anyway. If the rush if selling panic does happen soon I don't think it will at all. Often the market knows things that you and I and analysts don't and expresses this by rallying when it "makes no sense ". The reasons come out later and then people look back and see in retrospect it makes sense all along. But that my trading style. Look at it like a poker game. Ask if the move is likely a bluff or the real deal. I can certainly understand why someone's whise style was value/buy and hold would not touch it with a 10' pole or might even short it.
  • Dougster
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    11 years ago
    Anyone else thinking of buying some stock in RICK over the next few weeks? I think there will be the customary panic over the debt/deficit the Republicans will cave in a usual then the market will slingshot up.
  • tumblingdice
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    11 years ago
    I sleep at [view link]'s gold and silver until we get whats his face out of office,more [view link] it physical,shares or mining equipment shares.Besides Joe Montana and Steve Young have you ever heard of a wealthy 49'er?
  • Dougster
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    11 years ago
    @dice: I'm with you on gold. With Yellen in. "Bernanke on steroids" they are calling her.
  • SlickSpic
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    11 years ago
    I'm investing in lead and brass.
  • tumblingdice
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    11 years ago
    Yeah Slick!Of late I've had lead in my ass and brass in my balls.P.S.Happy Hispanic month.
  • zipman68
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    11 years ago
    I'm all into the gold pressed latinum my friends!
  • Dougster
    •
    11 years ago
    RICK is becoming an interesting ticker after being asleep around $8.50 for so long. Today it hit a 52 week high, but no volume. Not sure if I am missing a fresh breakout. I doubt it because of the low volume, but we'll see where we are at the end of the day. I would still prefer to buy around $11.70. Let's see if all the non-sense in Congress gets it back down there.
  • Dougster
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    11 years ago
    I was so busy keeping up with the Budget squabble this week I almost missed yet another Seeking Alpha piece bullish on RICK: [view link] As posted above I would like to get back in myself but am nervous to buy at 52week highs with all the non-sense goof on on Washington. Maybe sometime in October though!
  • Alucard
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    11 years ago
    ^^^ Show that you have some balls & buy, buy & buy. LOL!
  • SlickSpic
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    11 years ago
    Just don't end up like Randolph & Mortimer.
  • Dougster
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    11 years ago
    Careful, alutard, or I may buy, buy, buy sexual services from your sister.
  • Alucard
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    11 years ago
    ^^^ Since you are such a KNOW-IT-ALL and paragon of PERFECTION Dougster - how could you make such a terrible error & buy services from a woman who is not a sister of mine. I have NO sister. I thought you read all my posts looking for ones to attack. I recently said that I had no sister. HOW could you have missed it. LMFAOROTF!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  • Dougster
    •
    11 years ago
    I explained this to you before, alutard. She is actually your half-sister. Your mother didn't tell you about her because she didn't think you could handle learning the fact that txtittyfag was the father! LMFAO!
  • Alucard
    •
    11 years ago
    ^^^ A pissant have more neurons that you.
  • georgmicrodong
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    11 years ago
    That should be "A pissant HAS more neurons THAN you." Emphasis added for...um, emphasis.
  • Dougster
    •
    11 years ago
    Interesting this morning. E-Trade no longer has shares available to lend to short sellers. Probably means some took profits or got short themselves. Downtick coming?
  • Dougster
    •
    11 years ago
    Stock ticker RICK got some more funding: [view link] As usual, the terms are very bad. For $4.5 million they have to pay 9.5%, plus grant around $1 million in warrants around $12.50. Someone (Eric's cousin?) collected $271,000 for arranging the deal. (LOL!) Obviously, RICK is gearing up to do some more acquisition. Timing seems pretty good, with the NASDAQ hitting all time highs most days now. If strip club business picks up with people spending their stock market winning, and they don't fuck up managing them too badly, maybe their plan will actually work. I decided not to buy the stock while it is in the $11.70 to $12.50 range. It appears to be consolidating here who knows for how long before it next breaks up to its next level ($15?). While I think it's future is clearly up in this market, I'm into even easier money elsewhere. Maybe when it breaks above $12.50 I'll ride it up for a couple to a few dollars a share.
  • Dougster
    •
    11 years ago
    Ah, some good news for RICK regarding the NYC property: [view link] The savings on rent are about $1 million a year so also good news.
  • rickdugan
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    11 years ago
    Rick closed at 10.68 today, over $2 under its October high of $12.75. This is in the face of a red hot stock market. What a surprise. See above for my comments, which were made during the ridiculous mania. I still maintain that this sucker will soon be back down under $10.
  • Dougster
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    11 years ago
    Ah, yes, has been weak lately, I let it drop off of my radar. If your cynicism is high again maybe I need to consider buying in again, however. I believe the drop has been on much lower volume than the rally. I'll take a look at it this weekend, but, truth is I have some other darlings, so would probably only go with a small position "just for fun" (2500 to 4000) if I do get back in. I'll get to back to you on that.
  • Dougster
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    11 years ago
    ^^^ 2500 to 4000 shares. Getting a new broker and we'll what their margin requirements are for it.
  • rickdugan
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    11 years ago
    My "cynicism" has been consistent throughout - lol. I said that it was a bad long-term investment as it was running up, called its peaks insane and predicted that it would drop back down, and lo and behold here it comes back down. Bow wow baby. And I have not been remotely impressed with the acquisitions. Acquisitions are only beneficial to profit margin when (1) they are bought for less than they are worth; and/or (2) provide cost savings through economies of scale/synergies. There are very few economies of scale to be gained through purchases of geographically spread out clubs since each one must have local management and purchase through local liquor and other distributors, so that brings us back to cheap purchases. But after seeing that air space purchase, I have doubts on that front as well. This company keeps making bad decisions and cares more about flash than ROI. Ruff ruff.
  • Dougster
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    11 years ago
    rickdugan: "My 'cynicism' has been consistent throughout" Yes you have been consistently bearish on it but if you feel the need to make a point of speaking out maybe the bears are too confident, and have, or are about to, overdo it. Also, as has been my thesis all along if that stock price runs up, for whatever reason, good, bad, or ridiculous they can do a big secondary offering on the open market, clean up their balance sheet, and expand. If the market continues as hot as it is into next year (which I am expecting) and their revenue and EPS continues to grow, it will make a very interesting offering. Can you imagine the coverage it would get on CNBC? And if the tone was very negative due to their crappy balance sheet you can bet there would be plenty of buyers. Anyway, thanks for reminding me about this. Not saying I'm going to buy here, but definitely something worth looking into before Monday.
  • rickdugan
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    11 years ago
    My speaking out is a random event and the "bears" (meaning anyone who can read financial statements) have been consistently skeptical. Even during the absurd upswing in share prices, lenders were not been fooled and continued, then and now, to bend this company over the table for additional financing. And a secondary offering? LMAO. Not likely IMHO, for any number of reasons. What this company needs to do is to stop making flashy, high profile purchases in one-off locations, at least while its balance sheet is in the toilet, and start playing to its strengths. Instead of making one-off purchases in places like NYC and Vegas, they would be better off purchasing clubs in places where they already have a presence, thereby leveraging their economies of scale with managers, vendors, and even the sourcing of dancers. There is a reason why most strip club chains are regional, which is because they lose most of their purchasing power and cost savings mechanisms when they venture too far from where their other clubs are located. But buy away if you like. It is fun as a novelty stock I suppose. :) in areas where they already have a significant presence.
  • Dougster
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    11 years ago
    rickdugan: "And a secondary offering? LMAO. Not likely IMHO" Yes but many thought the rise from $8.50 to $12.50 was also very unlikely and it happened anyways. The market just loves to rally stocks when everyone is skeptical. rickdugan: "What this company needs to do is to stop making flashy, high profile purchases in one-off locations" I think it's all part of their plan. They are quite aware of just how bad their balance sheet looks to guys with yellow notepads and pencil sharpeners. Nevertheless they have continued to focus on growth at all costs and "flashy names". I say it's because, in the bigger picture, they are looking to borrow not from them through a secondary in the public market. Just waiting for a time of general market hype, nearing a 1999-2000 pitch. What's the catch of that happening? Many say, at this rate, we will be there in the next year or two. If that happens - just wait until word of their secondary makes it onto CNBC. Can you imagine the circus? What I think the company really needs is new management - a new CEO in particular. That could go a long to getting them on the road to a good path, and maybe generate enough hype to get the stock price up and insure enough buyers for a secondary? rickdugan: "But buy away if you like" Check this out. My new broker apparently shares your view of this stock and has a 100% margin requirement. Meaning the shares are worth absolutely nothing as collateral. And it's not like the new broker is super conservative about margin either - no special requirements for PCLN or TSLA, whereas my old broker had these at 40% and 60% respectively. So unfortunately with margin requirements that high, the stock performance is nearly academic to me now. I think all I'll do is to look to pick up 500 shares each at $10.50, $10, and $9.5.
  • rickdugan
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    11 years ago
    Dougster posted: "They are quite aware of just how bad their balance sheet looks to guys with yellow notepads and pencil sharpeners." It wasn't bean counters who bent them over the table for their last few rounds of financing, making them cough up high interest rates, warrants and other sweeteners, but rather serious investors. Nor was it bean counters who raped them just to get those financing deals sold in the first place, but rather people who do put corporate borrowers and lenders together for a living. And to be clear, there is going to be no secondary offering, no spin-off of debts to a REIT subsidiary, and no other magic balance sheet move that will suddenly improve their solvency issues. They are too far in the hole now for any type of orderly restructuring of their debts and are on the border of distressed debt territory. At this point, either they are going to earn their way out of the mess, with some negotiated debt rollovers and/or refinancing along the way, or they won't. Time will tell how this plays out, but I am eager to see how the next round of financials looks. ;)
  • Dougster
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    11 years ago
    RickyBoy: "Time will tell how this plays out, but I am eager to see how the next round of financials looks. ;)" Well they've been increasing revenue and earnings steadily, and just cut expenses via saving rent at the NYC location (see link above). If they were about to go broke due to their crappy financials, it would have happened already. Weren't people on this board talking about that 3 years ago? Anyway, question for you. Let's get this on the record. Would you short them at this price or just stay away all together? (My broker has them on the easy to borrow list. Might want to see if the status changed at your broker, if you are serious about wanting to short them. Let us know if you do and we'll see what happens. :-) )
  • rickdugan
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    11 years ago
    ^Not after it has already come down over 16% from its high about 5 weeks ago. It would have been a great short at over $12 and I am kicking myself for not pursuing it more then. Don't get me wrong, I still think it has much more drop left in it. When it was peaking I held firm to my position that it would eventually drop back below $10 and I still maintain that it will. However, the risk/return profile involved with putting on a short at this point is much less attractive, especially with the borrowing cost and the opportunity cost of capital tied up in margin.
  • Dougster
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    11 years ago
    Ah, that's too bad. If you had said you were shorting I would have gone long for 3,000 shares tomorrow instead of waiting to get in for a piddly little 1500 shares. Guess I stick to the original plan - 500 shares each at $10.50, $10, and $9.50. I agree with your statement about opportunity cost in this market. Plenty of low risk/high reward plays out there compared to this one. (RICK I rate as relatively high risk but high reward.) Even if you consider it a total dog it's hard to short any stock in this market. Regarding borrowing costs it looks like at least a couple of brokers have plenty of shares to lend out and won't be charging you interest to borrow. (Fidelity's shorting tool doesn't work on the weekend but I'll see what the deal is with them after the market opens tomorrow.)
  • Dougster
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    11 years ago
    Fidelity has it rated "hard to borrow". However, that may be overstating it. 1.5 million shares available to short at only 2% annual interest.
  • Dougster
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    11 years ago
    @RickyBoy: this things is dropping like a stone. At this rate my order will be filled before the end of the week. You sure you don't want to short it?
  • Dougster
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    11 years ago
    @RickyBoy: My $10.50 order was filled, but my $10.00 was missed, so I changed it to a limit order at $10.40, and cancelled the $9.50. Net result is I have 1000 shares so far averaged in around $10.42. I also decided to keep my old brokerage account open, just so I had place to keep these shares with lower margin. We'll see how it goes today, but maybe I'll up the position to 2500 shares after all. Are you still feeling skeptical about this stock? :-)
  • Dougster
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    11 years ago
    Ah, screw it, went in for 2500 averaged at $10.43. I better just not look at that account for the next 3 months, yah? :-)
  • rickdugan
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    11 years ago
    "Are you still feeling skeptical about this stock? :-)" Yup.
  • Dougster
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    11 years ago
    I've got 100 NFLX in that account (bought at $348.20). Let's see which one does better. NFLX in the lead so far!
  • Dougster
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    11 years ago
    Another negative piece on Seeking Alpha regarding RICK [view link] again by CJ, "CJ is an anonymous investment professional. CJ is currently open to investment consulting and employment opportunities". Piece just says a couple of things that are already very well know, i.e. RICK has alot debt and their purchase of the jet was pretty dubious and just to feed their CEOs super-inflated ego.
  • Dougster
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    11 years ago
    Looks like it may be getting ready to launch again, RickyBoy. Maybe you and tittyfuck should get in now?
  • Dougster
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    11 years ago
    Surging after hours on good guidance RickyBoy: [view link] Isn't funny how, as I predicted above, as soon as you started squawking about how bad it was around $10.40, that was a near a bottom. Ready to admit you are wrong finally or just going to blame another conspiracy theory and say some day you will be proven right? :-)
  • Dougster
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    11 years ago
    Shit! Read the details of that link? We'll definitely be past $12.75 now, probably by the end of the week. Even though I admit I'm not nice to you and tittyfuck generally, you got to admit I completed handed this one to you on a silver platter two posts above.
  • Dougster
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    11 years ago
    I love how RickyBoy was so quick to throw txtittyfan under the bus on this one to try and weasel away from things he said in the past. By saying market timing is for fools he calls his buddy txittyfan a fool since txtittyfan does day trade (albeit very poorly). Not too surprising since I'm the past RickyBoy said only idiots try and time the market. Then when I pointed out he was calling txtittyfan an idiot he oh, oh I only meant trying to time the currency markets, equities is fine... So funny how RickyBoy can't keep his story straight especially when you put a bit of heat on him and compare to things he said before. Looks like Etrade is starting to believe more in RICK. Margin requirements lowered from 50% to 40%.
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