New positions I have initiated without doing thorough research. (I’m not kidding when I say that I haven’t done much research…)
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IMAX
Imax: short thesis
The main reasons to short Imax (in my opinion):
- Overvalued. The P/E ratio is roughly 50 (higher if you ignore profits from tax-related reasons).
- They are close to saturating their markets and therefore Imax’s profits will start dropping in the future.
- Historically, the company has not made money and still has negative retained earnings. The economics of its niche is not good.
- Slightly aggressive accounting that inflates profits.
I don’t think that I am the only person with this idea as Google Finance shows that Imax has 65.89M shares outstanding and the short interest has shot up to 12.2M shares short (see NASDAQ site). That’s roughly 18.5% of outstanding shares short. The borrow is very cheap. Continue reading
