PLAY is up almost 14% for the day and 6% after hours, even after a huge earning miss. They announced earnings of -.35 cents per share, missing expectations by .78 cents per share. A huge miss, about 181% below expectations. And there was a dramatic dip right after the announcement but then the stock rocketed higher than any point this past week. Just wondering if anyone has insight into what happened here. I can’t find any news. (I hold like 85 shares at an avg price of 10.35, nothing major, just curious)
Dave and Buster’s (PLAY) has huge earnings miss but stock rockets upward
byu/cimarronaje instocks
Posted by cimarronaje
6 Comments
every time I been to Dave and Busters the games are broken, scam you out of tickets when you hit the bullseye and generally is worse than a carnival game. They better be making bank on shitty margaritas or this company is feeling like its left in 2008
Looks like the market makers are squeezing the huge short interest. I can’t see anything else there that is a positive.
After hours market is not a reliable indicator. Also the quotes are wrong many times. That being said it’s only up 32 cents after hours ATM.
What was the guide?
I’ve made and lost quite a bit on this issue. To be completely honest, as another redditor mentioned the AH price action is not a reliable indicator, the stock also doesn’t really move in any particular favour with regards to its underlying fundamentals. Which I believe is largely due to their turnaround plan, as we haven’t seen how capable the newly installed CEO is in turning around YoY comp growth. Its largely traded on sentiment, since their isn’t even enough data points to reliably gauge how effective their plan will be, by Q3, I believe it’ll reach a more fundamental level. Ive read through the earnings call on the terminal and I’m actually quite positive on their plans, but again as they mentioned, we’ll have a better gauge on how well the business is expected to perform, once they get through the micro sports events they mentioned.
Another aspect to mention is the short interest of the issue, often times the price spikes (>7%), with these events clustering, which may be due to shorts covering causing some trend followers (or should I say trend following algorithms) to buy into the price action, causing a sort of reflexive and self reinforcing rally. Only for prices to become extended, where volume peters out and it starts trading a range, allowing shorts to re-enter and continue the cycle. Something that I think is only possible due to its limited float.
Its actually very fun to watch this stock, especially the book, due to how thin the volume is, you can see market makers actively place and cancel orders to get the price to one side of the book, and when a retail traders uses a soar and scoops shares from multiple venues.
Though, to answer your question I wouldn’t be surprised if prices reach $14 before the April 17th expiry, it often drifts to max pain. I also wouldn’t be surprised if it tanks to $9 or lower, I find, after an hour or two after market open to be a good gauge of the stocks breadth for day.
And yes, I’m currently holding 100, $10 naked Puts for Oct 16th, which I might hedge by selling a near dated higher strike Put to create a diagonal spread. Got to love the gambler alter ego lol
I can’t even remember the last time someone told me they were going to Dave and busters lol