The Curious Case of $CART

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Good afternoon traders. I was just looking over some conference calls after yesterday’s earnings and I noticed something quick and interesting I wanted to share that may set up a trade idea for us this coming week.

Everyone knows Instacart (ticker: CART) as the grocery delivery platform, but what surprised me was the amount of people who HATE the stock.

In fact, almost 45% of the float on CART is sold short, making it the third most shorted stock in the entire market.

What’s interesting is that their IPO lockup expiry is tomorrow, February 15th and I think this can be a valuable catalyst for them soon for a few reasons. First, I think they may keep the stock up in order for previous holders to exit at a reasonable price, but second, is what came from their earning calls.

Here were a few of the highlights:

• Share repurchase program increased by an additional $500 million, bringing total capacity to approximately $930 million as of February 9th after the IPO lockup expiry

• 250 team members laid off in restructuring

The chart is basing here and looks pretty strong and over $28 I think this can break out and head towards $40, especially with this amount of short interest a lot of people would be caught on the offsides.

Just a quick article from me, hope you are all having a great week and I will see you soon.

Thanks for reading,

-Adit Dayal