Okay folks, Violent. So I got a short video for you today. I want to discuss one 3.92 stock that is exploding. It has a setup and characteristics that we've seen before with a lot of other early squeezers, and I want to give you my thoughts on whether or not there's a lot more upside here.

I got asked to cover this one quite a lot today, and what can I say? Charlie is a man of the people. Okay, in this pretty rough market condition, you know that one thing that I'm really looking for is smaller stocks that have gotten beaten down dramatically and have gotten really overcrowded. On the short selling side, that's what originally drew me to liking the after setup, back when it was in the low twos and it had barely started its run. My research in view on the lovely little outer gator ended up being right and it ran all the way to seven dollars.

And perhaps we have another wave coming as it just retook that five dollar crucial battleground today. It's still early on in the week, but watch what happens if this holds above five coming into Thursday and Friday. But Arrogator is an example of a winner. And in this market condition, it's very, very tricky to find winners, whether that's on squeeze setups or on fundamental conviction place.

And I certainly don't want to paint the picture that it's easy or cut and dry to find a winner because it's not. a lot of your game is going to be based on your research, but it's also going to be based on your risk management. Even the biggest winners are going to end up being the biggest losers at the end of the day. But when we see something that's making moves and showing setups that we've seen before, we gotta talk about it.

and we gotta break it down. And with Redbox, the company that we're talking about Rdbx, business-wise this is one of the worst. I mean, Redbox is known for these little Dvd machines they put outside grocery stores and in popular areas you've probably seen them around. I live in La and the homeless folks pitch their tents to these, which is certainly sad on multiple levels.

They still operate 40 000 disc rental kiosks across outlets, but they have gone on to adapt to trends by offering Redbox on Demand, Redbox, instant Redbox, Live Tv, and Redbox. Plus, they've even tried to build out their own content platform and support it with ads and subscription fees similar to a lot of other platforms out there. You go over to the last investor presentation back in September of 2021. They are still projecting physical rents to be an appropriate market to operate and moving forward.

They said 4 000 digital video screens are being installed in prime retail placements to enhance in-store marketing capabilities, and they are hoping that also draws people to their streaming network. But don't get confused, their main business right now is still those legacy boxes. In 2019, Redbox Digital made up just 20 million of revenue, whereas Redbox Legacy made up 809 million in 2022. They are expecting that to be 712 million versus 193 million.

And that's a big growth rate for streaming. It certainly is. But considering that not just the Legacy businesses in death mode, but the overall sector that they're entering the streaming sector, well, that's not doing too hot either. Post Pandemic numbers are getting tighter and tighter and the competition's getting fiercer and fiercer.

And this is a company that is trying to grow out of basically nothing. I mean, they do have a brand name going for them. A lot of people know the company, but if you look at big Dogs, like even Netflix struggling, it's hard to say. Well, I'm bullish on Redbox.

I'm not saying it's impossible, but if you look at this from a business standpoint, it's tough to see how they're going to actually earn substantial shareholder value. Best of luck to the team over there. Nothing personal. it's just a hard business to pivot.

I wouldn't want to do it. I'd rather jump off a very, very big bridge. But the question today isn't about the company itself. it's about its candidacy as a squeezer, a squeezy Mcsqueezy Mcsquezel tin.

And obviously, despite the fact that the stock is down 85 from all-time highs and went public via Spack last year, it's hard to argue that short sellers were completely off on this one problem. wasn't that they were off, or that Redbox doesn't deserve to go down. The problem is where they decided to attack it and how much they threw at the stock and the fact that people are noticing the setup that they're in and buying the stock. Short sellers attacked the stock at precisely the worst time, and they would have gotten away with it if it wasn't for those meddling traders that were speculating on a squeeze open the chart.

When did short interest start skyrocketing the most? Well, when Redbox had already dropped down from like 27 bucks to nine and you saw the biggest increase once, it had already dropped down to four, three, two, and one dollars a share. So in other words, short sellers thought, oh, Dvd rental boxes. That sounds like a pretty damn good business model when this was at 25 a share, and then when it dropped 50, 67, or even 80, they're like, oh wait, no. Actually, that's a pretty bad business model now that I'm thinking about it.

better short it. now. Why would they not aggressively short this at higher levels? Isn't there more profit potential at higher levels? Well, part of that is because when a company first goes public in this case, via spec, it's harder to find shares to borrow. And if you're a short seller most of the time, you're not going to establish your first original short position on a stock until the trend has moved in your favor.

Most people think that short sellers go and they look at a business model and they decide Okay, yeah, this company's overvalued. I'm going to short it now. Most the time they just look at okay, Is the stocks trend downward? If it is, let's accelerate it. Sometimes every now and then they will look at the fundamentals.

Sure, But the point is, the reason that you didn't see huge attacking at these levels. Or really any attacking is because you didn't see a trend downward where they'd feel okay. Yeah, I'm shorting with the trend. If you are establishing your short position in an increasing stock right after it goes to market and sees huge height flows, you're at a much much higher risk than if you had just waited for the market to agree with you that it deserved to go down and then you could profit off that downside along with the rest of the market and accelerate it and cause the holders to panic excel at a loss, which was all fine and dandy of a strategy, and they implemented it well.

The problem though, is that once Redbox got kicked down to the floor, short sellers decided to really try to nuke it. But that ended up in the squeeze rally hither when squeeze speculators started playing it, and in a likely attempt to try to either crush that rally or average up on their short positions, you saw utilization hit for the first time 100 percent. And then after the fact, a huge increase in failures to deliver was reported, which was a telltale sign of what well that short sellers ran out of actual shares to borrow and the one-sided market that their endless selling power had helped create had essentially been tapped out for that time period, creating this dynamic where for a period of time, they weren't able to suppress these buyers. Now the interesting thing is, this time around, we were once again at 100 utilization and the price just broke above where it broke the last time.

and this time around, you have even less shares on loan, which means the immediate ability of shorts to react to this new uptrend has substantially gone down. And you look at the or tech stats, we have 43 percent of free floats sold short, and judging by the multi-month stagnation from early February to mid-march and judging by the overall massive sell-off that took everybody that didn't want to be in this position out from the last five months of downtrending, I'd argue that most of the float that you're dealing with right now is locked. and what you're seeing in this pricing right now is the fight between short sellers and momentum trading, squeeze speculators And in the short run, if you look at these stats, I'd argue that if you see this, managed to hold above the fours and manage to retake some levels into five or six, you'll see some short sellers squirming pretty damn quickly. The key with any of these squeeze rallies is what.

Well, it's momentum. And to that extent, it's also fomo adding and accelerating and giving fuel to that momentum. And when you have substantial evidence that the float is really locked up, that could become a really rapidly and self-fulfilling prophecy. Just a question of whether this ends up getting picked up by overall retail communities or other types of squeeze speculators.

Do I like Redbox as a business or anything in a fundamental sense? No, it's terrible. But if you're looking at it from a technical perspective or a squeeze setup perspective, it's getting very, very interesting. Anyways, folks that caps off today's video. If you have any other tickers that you'd like me to cover, make sure to comment them down below.

I do look at most the comments and I do take a lot of different ideas on what to cover from the comment section. If you're looking to join Zip Trader you and learn how to trade very violently before our ever give up coupon code expires at the end of this month which is Saturday, I'll go ahead and put a link to that down below and that caps off today's video. Have a good one folks and I'll see you tomorrow.