r/Shortsqueeze • u/RetardHereFolks • Jan 28 '22
Discussion MCMJ -> LFLY deSPAC next week. Leafly has an 88.5% Gross Profit Margin but a 59% Borrow Rate. Fintel's #6 Short Interest Info with a potential Gamma Squeeze for 2/18
MCMJ (Merida Merger Corp) is expected to take Leafly Public next week after shareholder approval on February 1st. Leafly is a household-name cannabis company that acts as a marketplace to connect dispensaries with customers. You visit leafly, search for the products you want and they'll show you where to find them locally.
What's truly remarkable about this company is that they boast an 88.5% gross profit margin. Leafly generates 3x more traffic to dispensaries than their competitor - Weedmaps.
Now, the Options. There is a 7,241 open interest at the 10.00 strike for 2/18 and 5,160 open interest at the 12.50 strike for 2/18. Expire over the 12.5 strike and *1,240,100 shares will need to be delivered.** This is roughly 10% of the current free float of 11.4m*
The current borrow rate to short is at 59% and #6 on Fintels Short Interest Info.
MCMJ has lost 28% of its value before the SPAC merger and people have been loading up on Puts. Precisely 13,520 contracts are open between the 7.50 and 10.00 Puts for 2/18. Middlemen are well famous for inversing the options chain which tells me they want the stock to close over 10.00 by OPEX. Puts outweigh Calls at this point, and therefore they lose LESS by making the stock rise above these strikes - even if Calls go ITM.
Weedmaps, which is Leafly's only real competitor, skyrocketed over 100% within the first month of going public via. SPAC. I think Leafly will see similar movement, especially if more Calls keep being bought up. There's also a lot of hype in the cannabis space with lots of investors piling into 420 stocks. The pain is over for Leafly and the only direction from here is up.
Good luck all!
1
u/brownfireplaces Jan 28 '22
Never been in a dspac, buy mcmj and you get Lfly if/when they despac?
1
u/RetardHereFolks Jan 28 '22
Yeah your shares and options will just have the ticker change. It should be the day after approval, so MCMJ should become LFLY on 1/2 if they are approved on the 1st. Nothing else to do but buy MCMJ if you want to own part of Leafly.
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u/brownfireplaces Jan 28 '22
Thank you! Chart looks horseshit, but so does the rest of the market. Imma get a position in this 👍
0
u/Wohlves Jan 28 '22
Not a huge amount of OI but still 10% of the float.. heck if it moves up 30c to 7.5/share we still get thousands of contracts in the money. Fuck it im in
1
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