Young hedge fund manager Zack Buckley, who runs Miami-based Buckley Capital, totally crushed a stock with his short today.
First, he kicked off his presentation at the 8th annual Value Investing Congress by saying that the whole shorting China trade is over. Well, that was seen as an easy short. So what’s next?
Buckley says he’s short Splunk– a software platform company.
Buckley says that Splunk is in a “very tough competitive position”. It’s squeezed into a niche between quality and price, he explains. Its competitors include HP, Intel, Oracle, Microsoft, among many others.
In conclusion, Splunk has a weak business model with low recurring revenue, he says. It’s an undifferentiated product in a rapidly changing, fiercely competitive industry, he says.
Check out what his presentation did to the stock.
It was already weak to begin with, but during his presentation volume spiked and the stock price fell further.
Photo: via CNBC data