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Folks what i’m about to show you in this video is going to be very very important because whether you care about this stock we’re going to talk about in this video or not this is going to be highly relevant to stocks you personally own or you will own in the future and we’re talking about stocks that are heavily shorted and uh what i just witnessed here after

Hours is uh you know borderline pure evil some people would say isn’t this like straight up manipulation of the stock price after hours and uh there’s certainly debates to be made okay but what i’m going to show you is something that is almost impossible to prove but when you start putting the pieces together you start to very quickly realize oh my gosh like

This is like uh some pure evil activity and this is why another one of those reasons why it makes it so hard to do any short-term moves in a stock okay so corsair gaming if you didn’t know is one of the most heavily shorted stocks in the entire stock market about 30 percent of its float is short which is heavily heavily shorted anytime you’re in anything over 10

Percent short is uh pretty heavy if you’re over 20 it’s you know you’re way up there and if you’re over 30 you’re in insane levels of shorting activity right and so we know there’s a crazy amount of people that are short selling corsair gaming right and they’ll have their reasons or not their reasons whatever you know i think a lot of folks look at these as kind

Of like retail trader names easy stocks to shake the retail traders out of right or investors retail investors traders whatever um you know it’s especially if people don’t have experience in the market they see a stock price going down and they start to get frustrated they sell they make bad decisions and and that’s kind of what happens right and so horizon

Area of course their earnings come out after uh the bell essentially and what are the earnings well corsair basically beat on revenue they came in at 510 mil that easily beat the 495 mill that was expected they came at 35 cents eps which beat expectations of basically expectations with 25 cents so they crushed it on eps and they had a very nice beat on revenue

Okay so that’s good good news that’s really good news especially for a stock like corsair gaming which has had a lot of bad news baked into it so the fact that they come in with beat and beat and a lot of people figure if anything like a lot of people thought corsair was going to miss on revenue and miss on eps because we know a lot of the smaller companies have

Had some troubles dealing with inflation all the costs of everything going up right and so you’re looking at that and you’re like okay this is pretty good um anything else here well yeah there’s something else guidance guidance is always very important is this a massive miss here as far as guidance goes well no it is not that is right in a line it’s actually just

Slightly above what analysts were expecting analysts had midpoint of 1.99 billion dollars for corsair gaming to do essentially as far as their revenue goes in 22. and the company got it for 1.9 and 2.1 which is once again the mid points 2 billion so that’s just over what else was expecting so here we are in a situation where corsair gaming beat nicely on revenue

Beat huge on eps and it looks like their guidance is slightly better than what analysts were expecting and the stock price is obviously beaten down through the floor the valuation’s very low and so in this situation you would assume probably a pretty you know positive stock price reaction right especially when you consider the fact that this stock’s trading at a

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15. 15 trillion p uh yahoo finance has about 11 forward p and a price to sales ratio of under one for this company which is just ridiculous to even think about right so with the valuation being down the way it is in the stock price being beaten down the way it is right and coming in with those great numbers you would expect the the stock price to react positively

Right and sure enough it does it reacts positively there it goes right i took this picture here i was like i gotta see you know i’m gonna track this all after hours and see what’s going on so i just took this picture with my phone real quick here and uh yeah nice up over six percent and so after hours trading it’s going pretty well right stocks trading back and

Forth but it’s overall nicely positive right and then suddenly out of nowhere out of nowhere the stock price tanks numbers had already been out for quite a while at this point um everything was known uh the stock price reaction was really good in a matter of 60 seconds the stock price goes from up six percent or so tulsa was trading down to 11 12 in a matter

Of a minute and it was like what just happened who just dumped a massive amount of shares on on the market like why did this stock just hang to the floor right now after hours it came back and came back so it showed strength after hours in terms of right after the earnings came out it also showed strength after suddenly massive amount of shares were dumped on the

Market right so twice the stock showed a strength but suddenly you know the stock price momentum got completely destroyed essentially and what you’re going to see here and i’m not a big one into the technicals in the charts and let if i’m pulling up something like this it has to be some big crap that happened let’s just put it that way because you know i usually

Don’t care about the candles or any of this stuff so for me to pull this up something big had to happen and something big did happen somebody just dumped a whole bunch of shares on the market all within like a minute just boom sell and um for what reason what reason everything’s good everything’s great everything’s better than expected stocks beating down there’s

No way along saw those numbers and we’re like oh i’m out of amount of corsair gaming no no no especially when the stock price had been moving up it was showing nice momentum the valuations like ridiculously low all the numbers were beat and suddenly just somebody just throws a massive amount of shares on the market so many shares that you know after hours you know

Couldn’t even recoup it essentially okay that’s a little fishy right and once again the stock showed resilience coming out of that big dump of shares all of a sudden that happened see here’s what you can do if you’re a short seller right let’s say you’re shorting a stock to the max like a corsair gaming let’s say uh you got 15 million dollars short position on the

Stock for instance right you’re short 15 million dollars worth of shares well you could easily buy a half million dollars or a million dollars worth of shares and the reason you own those shares is not really to hedge your position at all the reason you own those shares is so if there’s any big price momentum going on in the stock right especially after hours

Where there aren’t as many shares trading in a stock like corsair game because it’s a smaller company right we’re talking about you know a 2 billion or under a 2 billion market cap it’s a small cap company right you could easily kill price momentum by dumping you know let’s say thirty thousand fifty thousand eighty thousand shares all at once in the market and

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There’s not going to be enough buyers there to buy it up essentially right and so you get this um massive just kind of flood out there so what was seen as a good earnings report positive the stock was being bought up all of a sudden if you’re a short seller you throw those shares on the market no one can buy it up fast enough and it tanks down the stock price and

It kills it completely kills that entire move upward in the stock price in a matter of a minute in a matter of a minute that entire momentum can be completely destroyed okay and also suddenly the good earnings report the beats and all that doesn’t matter because somebody may be a short seller probably a short seller because like i said from the long perspective

There’s no reason to have sold out you know especially all at once like that like you don’t do that if it’s long you’re going to go into this like no this is positive price momentum i’ll cash out of some shares here and there you don’t just dump all your shares at one moment for no reason but somebody went ahead and did that and like i said if you’re a short seller

It makes a lot of sense to just hold some shares around and then go ahead hey i’m going to kill this entire momentum all of a sudden people start second guessing themselves thinking oh man maybe i should sell as well or maybe i shouldn’t buy this stock because now there’s no price momentum there right and you you take the vibe from being that’s a good quarterly

Report wow they beat on revenue they beat the eps they they’re guiding a little better than what analysts were expected and now said it’s like oh the stock price is down and they tried to really kill it right i mean that stock price like i said went all the way down to down 12 because they flooded so many shares out there in a matter of a minute they flooded that

Many shares out there and with the stock you know like corsair that’s not going to be heavily traded it makes it difficult right if this was apple stock it’s a different scenario you can’t really kill it like that the momentum and the reason being is apple’s too big even if you’re a big short seller you’re still not going to kill the price momentum in stock like

That with corsair gaming it’s rather i don’t want to say it’s easy but it’s not super hard to kill the price momentum if you don’t want that stock to go up and you don’t want to see it going to 21 22 23 and look at what the stock was doing it was doing very very well they figured let’s kill this baby before all senate ends up going up 15 20 25 and also the shorts

End up having to be in a short squeeze situation right and all of a sudden when the shorts start getting squeezed that’s when you see some epic moves look at snapchat last week when that one made a 58 move and so the shorts always have some things kind of in the back of their pocket and this is why you know it’s almost impossible if you’re trying to play these

Things from a short-term perspective and i learned this lesson many many years ago because the short sellers are they got a lot of tricks up their sleeve and they won’t win over the long term but they can win these short term battles because they got all these tricks up their slave and if it means that they’re gonna buy some shares and uh all of a sudden dump

Those shares if there’s some price momentum they’re gonna go ahead and do that essentially right and so it just makes it so tough to battle with these guys and that’s why i try not to play any short-term options or short-term trades or anything like that because it’s just you got to realize who you’re going against and um you know they got a lot of firepower on

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The other side and to try to beat them in the short term is is almost impossible right so as far as where those stocks uh ending up here at the end of uh trading after hours uh about a four percent move or so so you know not not horrible um but also not the up six percent or maybe it would have gone up ten percent or twenty percent we’ll never know if it wasn’t

For that that flood of shares also out there in a sudden moment out of nowhere we’ll never know where this one actually traded out at and so tomorrow it’ll be interesting to see what happens with this stock price when actual markets open because we know in the actual market that’s where especially retail investors like to make their moves right and that’s where

Usually a lot of longs like to make their moves now some people got shares and after hours for 18 and i don’t know 15 cents or 18 and 20 cents uh good for those folks but um you know it’s it’s uh it’s part of the game and you might say well is that is that legal yeah that’s perfectly legal there’s nothing you know anybody could do about that if you want to short

Sell a stock like that and also you know buy a good chunk of shares and dump them on the market after hours to kill price momentum there’s technically nothing illegal with that and i know that frustrates a lot of people but it’s what happens and you know with companies like that they have to deal with that and so it ends up leaving a sour taste in a lot of people’s

Mouths essentially where they’re like oh why they beat earnings they did so good the valuation’s so low and the stock price went down four percent it’s what ends up happening is just what you have to do deal with in the short term now for long term investors this is the best situation possible right because as a long-term investor you’re focused on the next three

Five seven years and you know short sellers they can only play these games for so long essentially and so over the next three five seven years if corsair does well and it’s a 60 80 stock it doesn’t really matter to you and you can buy shares for cheaper right but for anybody playing it from a short-term perspective short-term call options and things like that or

Just short-term trading you know this type of activity can be ultra frustrating and there’s really nothing anybody can can do about it in the end in this situation right in terms of corsair i haven’t got a chance to listen to their earnings call yet so i’m going to listen to that whenever we get that on the hungry bull if we don’t have it up five tonight i’ll just

Listen to it on the investor relations page uh essentially i’m very excited to hear that from what i heard the conference call went really well people are really really excited uh overall but yeah nonetheless guys uh that’s moral a story and if you ever owned highly shorted stocks be ready for the shorts to play a whole lot of games okay that’s just the way it

Is hope you guys enjoyed this video as always we got a massive deal coming up for the private stock group financial fortress make sure you take advantage of that if you want the deal as soon as it drops check out pin comment down there and also don’t forget to subscribe the channel if you’re not already subscribed thanks for joining me we talk stocks in the market

All the time baby much love and have a great day

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Sold Heavy By Financial Education

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