Currently gunning for HF recruiting and found a piece of shit stock that ought to be shorted out of existence. All my previous stock pitches were Longs; how would you structure your pitch for a Short?
Thinking about:
I. Recommendation
II. Company background
III. Thesis
IV. Valuation
V. Catalysts + why short now
VI. Risks
| +21 | 3x SWE FAANG Intern -> Fundamental Analyst @ HF | 13 | 1d |
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| +13 | Fund 1 8%, fund 2 5%, when will fund implode? | 6 | 8h |
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Catalyst + why short now is the single most important thing
You also need to describe your "source of view". Why is the market wrong about this stock? Please don't be $TSLA...
Checked the broker TP for Tesla today after their results: min is 89.28 and max is 2,156.85 hahaha
It's worse than you think.
I think the structure is okay. All I would say is include the thesis you're disproving in the recommendation so it would sound something like "Company A is here today because people think X is true but that is not true because of Y and people will realize this because of/when Z happens".
Yes, always know the bull/bear debate and articulate why the bears are right.
Seems right but you need to spend a lot more time on V and VI than you would for a long - unlimited downside if you get it wrong & an ongoing cost to just hold the position (likely to be material if it's genuinely a piece of shit company as it'll be heavily shorted already). For risks make sure you think about who might step in and buy the entire company.
And make sure you've checked availability / cost of borrow to check it's actually an implementable idea. Lots of 'no-brainer' shorts are practically impossible to short in any kind of size.
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