Cutting Take Outs!

New Acorn trade. Revisiting an old favorite.

Perhaps some adult supervision might have prevented the US administration from placing tariffs on a population free (ex-penguins!) island in the South Atlantic?

• The note’s cover art has nothing to do with its content, but all those ‘Liberation Day’ penguin memes were making me nostalgic.

The 🐿️ is on the road next week. There will be no new thematic note or podcast this weekend as I want to spend more time on the weekly portfolio review which will be in your inboxes on Sunday morning EST.

However, I did want to get this idea out to you ahead of the weekend.

Cutting Take Outs!

During the past few weeks, it has felt like an opportune time for the 🐿️ to review his full ‘bull pen’ of equity short ideas. We have had a great experience so far with India and the private equity related plays.

However, one of names in that ‘bull pen’ has been screaming at me for ages. It carries all the hallmarks of a textbook fundamental ‘short’:

• Flawed business model (selling dollar bills for 50 cents)

• Voodoo accounting metrics

• Prolific issuer of stock-based compensation

• Insiders selling stock like their lives depended on it

Until now, 3 ingredients were missing from the recipe: (i) a technical break in the chart and (ii) some type of clear macro catalyst; and (iii) a ‘news fail’. We just got all three.