I Told Ya So

If you’ve been following my posts about Peloton (PTON) and taken my advice, you’ve done quite well for yourself. Just to recap, back in December 2020, I explained why, at $161 per share, Peloton was grossly overvalued and, therefore, recommended shorting the stock.

Then, in May 2021, I followed up with another post detailing how correct the prior advice had been. At the time of that post, Peloton had lost about half its value, falling from $161 per share to $83 per share. I said, however, that there was still time to profit from selling this stock short, as I thought the proper valuation for Peloton was about $28 per share.

Well, here we are. Peloton right now has broken through my $28 valuation, falling to $24 per share. My advice now is to close out your short position and take your profit. While the stock may continue to drop a bit more, that’s simply investor panic and/or price momentum.

In summary, had you purchased $1,000 of June 2022 deep out-of-the-money puts back in December 2020, you’re sitting on a tidy profit, upwards of $200,000. If you listened to me and are cashing in, well done! And if not, shame on you.