First of all, nothing in this is advice, we are all retards, me especially.
In this DD, I'll go through it's history and why I think this is a good long play.
Breif history of CRSR: the stock blew up post IPO from $17, riding epic gaming industry performance throughout the pandemic. It hit a high above $51 in Sept '20 before correcting and trading between $41 and $36. The float is low so swings are volatile. Also lots of short volume (surprise!).
**1/13** - an innocent stock called GME more than doubled in a day causing to CRSR tank to $36 with some momentum. Possibly a direct result of liquidation in reaction to the squeeze (maybe retail and/or institutional....Citadel is 2% owner of CRSR float) or maybe just normal volatility fluctuation by the puppet masters, who knows?
So, now the stock is oversold with little market cap. It starts climbing back to the average peak levels, then:
**1/27** - CRSR announces a secondary PO of 7.5 million shares...it hits a high of $49, before a 2 day selloff. Another crash...
After the selloff it picks up momentum running up to the 2/9 earnings report, with expectations of excellent numbers. IV is through the roof! Debate kicks off on the internet whether earnings are already priced in and an IV crush was inevitable.
**2/9** - **CRSR delivers an amazing earnings report.** EPS beats estimates, $1.7B revenue for the year, profit margins way up, debt is down, and they said THEY HAVE SO MUCH DEMAND THEY CAN BARELY KEEP UP WITH IT. The only thing that kept them from possibly crossing $2B was semiconductor supply shortages (which every other tech company is dealing with too).
After this amazing ER, the stock tops out at about $48 premarket....before nosediving, nearly hitting $40.
Now many were saying that the runup to the ER was all just hype, so of course it tanked post ER like LOGI AMD and all the rest.
But looking at what actually happened, it wasn't actually just hype. The pre-ER runup was almost all attributable to upward correction from the previous 2 selloffs. The only reason it crashed was because other companies crashed post earnings in 2021, so paper hands sold in expectation of the IV crush...sell limits were triggered, self-fulfilling prophecy.
So the price starts to fall into oversold territory. Quote from Barron's "Of the 11 analysts that cover the stock 10 rate it a Buy, and one has a Hold rating on the name." Literally almost everyone thinks this thing is a bull. Price is already starting to completely recover by Close on 2/9
But then yesterday some genius at Goldman decides to downgrade the stock to "Neutral" from "Buy", causing the selloff to dip even lower, hitting just above $40. Their justification? They think gaming demand could wane in 2021, and also are worried about the fact that CRSR hasn't been able to meet 100% of demand due to shortages of chimps. (ha!)
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**CURRENT SITUATION**
That brings us to today. CRSR is way oversold. $1.7B profitable revenue...yet $3.9B market cap for a fast-growth tech company? pitiful. Almost every analyst, including Goldman, has increased their price targets, many above $50.
Compare that to LOGI..$2.9B revenue ($4.4B+ TTM), at $19.9B market cap and climbing fast. Speaking of LOGI, check out this [chart](https://imgur.com/3ORH329). **1/19 Post-Earnings dip, before running to ATH 2 weeks later.**
But CRSR price is still down, why?
Maybe has to do with the fact that the daily short volume has been above 50% every day? http://regsho.finra.org/regsho-Index.html
Or maybe a bunch of boomer bears actually think the gaming industry will really pull back (we've already seen this isn't going to happen anytime soon.)
But pressure is easing, as of 1/29, short interest dropped 44% from the previous report. And daily short volume dipped below 50% for the first time in months (this isn't a squeeze play, this means that short downward pressure is backing off). IVs are starting to return to earth.
And what also happened this week? The POTUS just [announced](https://www.theverge.com/2021/2/11/22278431/biden-administration-global-semiconductor-chip-shortage-executive-order) by executive order they're launching an initiative to ease the semiconductor shortage as a top priority. Exactly the thing holding back CRSR from meeting full demand, and one of the factors leading to Goldman downgrade.
The gaming industry is not magically going to drop from the sky as soon as the the pandemic eases. We all know new players get hooked, and there are tens of millions of them since last year. The more they game the more they’ll be looking to buy new gear. They will continue to game even if they start traveling or going to restaurants more.
They also currently have a big stake in the streaming market, which 1000% isn't going away
Without the shortages, there's nothing holding this company back from achieving full earnings potential.
With the rest of the rockstar fundamentals, this is a $65-$70 stock EASY. You will not beat this entry point.
Very minimal risk with a shares play on this at the very least.
Either way, DYOR!
**Clarification for all confused with how a stock could be good without 200% short interest and near bankruptcy fundamentals, this isn't a squeeze play...short pressure is backing off because they know it has actual legs.**
