Jul. 23 at 8:51 PM
$ACI I'm viewing this setup very similarly to what happened with
$PLNT back in May:
- An underperforming stock price that has been sliding for an extended period of time. ✔️
Both stocks have been sold-off aggressively over the past 12 months, and were crushed after releasing their earnings reports.
- A major flush of existing shareholders that have lost patience and decided to move on. ✔️
In the case of
$PLNT over 20% of the total share count traded in a single day. For
$ACI it looks like it's going to be right around 10% of the total share count being traded today (the single largest trading day for
$ACI since going public in 2020 [aside from an index inclusion in 2025, but that doesn't really count]). This is important, as it effectively resets the patience of the shareholder base. Anyone that wanted out, would have sold today.
- Now this next point is crucial: businesses that are doing okay. ✔️
Neither have been great, and guidance has been reduced to reflect that. They still make money. People aren't going to suddenly stop using them overnight and the valuation looks rather attractive given the long-term prospects.
- As an added bonus, the management teams at each
$PLNT and
$ACI realized there are issues and they laid out plans to address those issues. ✔️
$PLNT basically said they messed up their marketing message and they are working on fixing it, while
$ACI recognized they need to alter their operating structure and reduce costs in order to be more competitive.
$PLNT stock rebounded quickly (exited my position there), but I'm anticipating a more drawn out recovery for
$ACI. I loaded up on ITM
$ACI LEAPs today. Time will tell if this plays out the same way as
$PLNT.
