June 20, 2021 -

C3 kicked me in the balls today. Should've sold earlier in the day, but saw the news about the contract they secured with Intelligent Waves for the Air Force and thought the stock would increase because of it. Obviously C3 did not go up at any point today and instead decided to drop like a rock for the rest of the day. What are y'all feeling about this stock? Get out now or hold for it to maybe go back up? Already took some Ls with $MARA and I'm not trying to fully repeat that here, although it might already be too late.

February 27, 2019 -

So we all know about Roblox, Airbnb, DoorDash, and Affirm IPO-ing this year. I'm here to tell you there's one company that is beyond slept on. Introducing Palantir's little brother, C3.AI

What is C3.AI?

For those of you that actually care about a company before dumping your McDonald's paycheck into it, here's some info. C3 markets itself as an Enterprise AI company founded by Thomas Siebel. For those that don't know, Thomas Siebel created Siebel Systems which revolutionized Consumer Relationship Management and was later bought out by Oracle. Now back to the Enterprise AI bit. Basically traditionally companies go through different vendors for each of their AI and ML needs. C3 aims to fix that problem by offering an entire suite of tools that are inter-compatible with each other causing easier usability and more productivity. They have contracts in essentially every industry with companies such as 3M, Shell, and Raytheon, AsrtraZeneca and received a $95M contract with the Department of Defense for the F35 fighters and the US Air Force for maintenance on older aircraft.

Why C3.AI?

I won't bother you with words but I'll let the pictures from their S-1 filing do the job.

https://preview.redd.it/ojd7b196g8261.png?width=2449&format=png&auto=webp&s=94feeb7f9d8e37cccd803983b5a928e613750b05

https://preview.redd.it/gpb7nry6g8261.png?width=2449&format=png&auto=webp&s=3651e1b7a1bd403774524bfdfdb88d4b8cb979a7

https://preview.redd.it/9pzly028g8261.png?width=7680&format=png&auto=webp&s=76afb284750b4698c2c57049637600a9a964f71f

https://preview.redd.it/mvwi9gw8g8261.png?width=7680&format=png&auto=webp&s=22b05a4f6bf3c833982f82666063674e6be99291

https://preview.redd.it/8guycek9g8261.png?width=3840&format=png&auto=webp&s=1008e2507e9d0afb904fc24a70ca50272dd0cf74

The TL;DR

SaaS Model-Driven Architecture

Government Contracts

Integration with major cloud players

71% Year on Year Growth

TL;DR of the TL;DR

Palantir took us to the moon but C3.AI will make sure we get to the moon.

Shares couple days after IPO for the dip then load up on LEAPs when it IPOs

Here's the link to their S1 filing where I got most of the information from.

Edit: They haven’t announced IPO date or price. It’s under upcoming IPOs though on MarketWatch.

Edit: They announced the price today at $31-$34 and expecting to raise 527 million. Microsoft is set to take a $50 Million stake.

June 9, 2022 -

I'm mostly a serious investor, but I do have a gambling itch that is sometimes hard to quench.

Every so often I lurk here for laughs and face palms, but today I bring you a stock that is going somewhere. I don't really know where, but it's going to provide serious action.

I don't have the time to give you all the DD, that most of you don't deserve, but I will provide you with one snip below. This is unsustainable. The shorts will either win, or they will get absolutely decimated. I've been playing this thing long for a few months. I'm going to continue to play it long. If you think I'm an idiot, feel free to put your money where your mouth is. <insert some joke about somebody's girlfriend's boyfriend> Smart money would probably be playing this both directions, but I'm sticking 100% oriented to the heavens. This stock cannot stay at $40/share. Pick your direction, have fun.

November 9, 2019 -

TLDR: Short C3.AI! Price target $42.0. $AI is gonna crash 50% back to IPO price after FY’21 earnings. Here's the opportunity to make some 🍗🍗 today: I bought OTM Apr16 puts at $75 strike and July16 puts at $55 strike. Expecting 113% return on the April puts when the stock crashes to $65. Expecting 210% return on the July puts once the stock craters to 42. Why? Because C3 is the epitome of “the Establishment trying to tech”: an energy consulting company pretending to be AI SaaS so that investors can ratchet its shares 500% higher than fair value and then dump at the expense of the little guys. Despite sluggish top-line growth, dismal economies of scale, and penetration headwind into “new-world” customers, C3 is still currently trading at 50x P/S (price to sales). Tom Siebel, the filthy-rich CEO, already PumpedNdumped $200M of his shares last week, so we apes need to band together now to "PUT" this out before institutions sneak it into our retirement index funds.

Want more details? Read on.

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$AI slipped 10% last 2 weeks and there's SO MUCH MORE TO FALL!

After looking into it for 20 min, my OpenAI friend put it best:

“Holy sh*t girl, this is seriously just the Establishment pretending to tech!!”

But before digging into the details of this farce—sorry, SaaS company, let me first give a shout out to u/indonesian_activist, u/BenjaminFernwood, and everyone else who supported me and my options analytics tool (which I will make available to all you 🦍🦍🦍 ASAP so you can visualize real-time implied price probabilities on any ticker of your choice at any time! Keep tabs on that GME!!!) Your upvotes have enabled this ex-hedgie quant girl to make her first ever DD post 😃😃 (aka this one).

Now let’s break down why you should sell C3.AI from 3 supporting perspectives:

(1) The fundamentals perspective

(2) The quant perspective (where we'll look at 2 specific good-looking options trades to put on)

(3) The apes-vs-hedgies perspective

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(1) The fundamentalist argument:

• Terrible revenue growth: C3.ai IPO’ed on Dec. 8, 2020, and reported its first quarterly (Q3) earnings on Mar 1, 2020. Stock plunged >30% that week, from $120 to $85. What happened?! Growth numbers sucked. Top line was basically flat to decreasing throughout COVID (~1% QoQ in April 2020, -2% in July, +2% in Oct). Clearly nobody had the frivolous time to listen to Tom Siebel’s buzzwordy service offerings in a down economy. Then finally on March 1, after riding the coattails of IPO hype, the company finally reported 19% QoQ growth. But nobody was impressed because that’s still too damn shabby to justify a valuation more than 65x TTM revenue.

• Overblown multiple: Today, even after sliding 30%, C3 is still valued at ~51x price to revenue, which is insane! For reference, comparable B2B AI/ data analytics companies (aka consulting services and abstraction layers on top of Hadoop & Tensorflow) are only 10x-15x at best:

Alteryx: 11.7x (23% QoQ growth in most recent quarter)

Sumo Logic: 11.2x (30% YoY growth)

Cloudera: <5x (12% YoY growth)

• The only other similarly valued comparable is Palantir at ~44x. Bulls (aka Wall Street’s sycophantic sell side analysts) may use PLTR as a lame justification for C3’s current valuations, but unlike C3 Palantir is actually looking at real 45% QoQ revenue growth—more than DOUBLE that of C3’s, even while maintaining a 700% bigger denominator (PLTR’s annual recurring revenue is ~$1.4B)! Comparing C3 to PLTR is like comparing your wife's boyfriend to Emma Watson!!

• Enormous customer concentration and churn risk: C3’s top 3 customers accounted for 44% of total revenue in 2020 and the top 2 accounted for 36%. Imagine if one of those contracts churned. Then what? Oh, and in case you were wondering who those lucky titans are: Baker Hughes and Engie. Any value C3 provides these oil moguls just goes toward accelerating global pollution. In fact, in 2020 59% of sales came from the oil and gas industry! Just lovely. I really want to meet the biz dev genius who said “let’s go after the most capex intensive customers, cuz they surely gots the free cash flows to be loose with their wallets!” Uncle Siebel seemed to realize this gaffe only once he decided to go public. Now C3 is chasing after “high tech,” trying desperately to compete against Palantir/ Databricks/AWS and a cornucopia of other startups, including open source and in-house teams. Too late. Meanwhile it also changed its name TWICE from C3 Energy to C3.IoT to C3.AI… Still think this is an “AI” company? ‘Nuf said.

• Even the Chief is bearish! As soon as his 90-day post-IPO lockup expired on March 8, Siebel dumped 2.26 million shares! (See the SEC filing table below). Now just how big was this big dump? To give y’all some perspective, during the IPO in December, C3 sold just 15.5 million shares, so Siebel single-handedly increased the supply by 15%!!! How the F did he push all those shares through the dark pools? Oh, and he got to increase his net worth by $200M in the process. Not that he needed such pennies when he was already worth over $3.6B in 2018 from Oracle. Meanwhile, TPG reacted like “Huh? CEO and Chief Engineers taking big dumps? Ima 💩 💩 along with them!”

Tom Siebel causally cashing out $200M: "look at my successful PumpNdump!"

But wait, there’s more to rip on Siebel and his management, um, skills…? During the Q3 earnings call, an analyst from Morgan Stanley named Peggy asked for the customer conversion rate (literally the second most important KPIs of any enterprise SaaS company, after revenue growth rate!!). And what did the Chief have to say?

direct quote from Q3 earnings

• Hasn't EVERYONE figured out by now this is a CONSULTING COMPANY?? What’s the big deal, you ask? What’s wrong with consulting? In case you’re not familiar with post-2010 Silicon Valley tropes, consulting => scalability no-go. When a company needs to build a custom “product” for each new customer it onboards, it can only grow linearly with the number of TAMs and FDEs (forward-deployed solution engineers, aka consultants) it hires. In other words, ain’t no tendies to be made from operating leverage, ain’t no economies of scale, and ain’t no margin improvements to be expected down the pipeline. So how did C3 come to trade at higher-than-SaaS multiples? Easy. Tom Siebel is a veteran at the infinite “Hot Potato” game: where at each funding round, VCs just keep betting that the next round will bring in new money even more willing to jack up valuation stakes until finally the pyramid peaks at the expense of … yep, you guessed it: public market retail investors (aka you, me, and the institutions managing our retirement plans). What does Siebel have to say about all this? “I mean we are focused on being a software company. We're not focused on being a software services company..." Ok look, no real software company says they're focused on being one; they just are. (If you want even more cringeworthy Siebel quotes, just read the full earnings call transcript. And in case you wanted even more proof that C3 is a downright services business, just open up Linkedin. As of March 15, there are 603 profiles currently working at C3.AI: 195 (32%) turn up under the title “forward deployed engineer,” 166 (28%) turn up under the title “product manager,” and 188 (20%) turn up under the title “solution engineer.” In other words, 80% of the company is pre-or post- sale consultants.

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(2) The quant perspective (get ready for some stats):

That’s right, this “female ex-hedgie quant” is back with her options visualizations. This time I promise to provide more explanations.

Let’s start with a simplified thought experiment that illustrates what’s going on with $AI. It’s March 16. 3 days before the nearest expiry. Current spot is $86.50. Say you ask 10 apes to set a price target for $AI on Mar 19. Assume 3 of the apes reply $75, 4 reply $80, 2 reply $105 and 1 replies $110. Mean estimate is therefore $86.50 (3*$75 + 4*$80 + 2*$105 + 1*$110)/10, which must necessarily equal the current spot price – by definition, spot is the market expected value at any given moment. However, the mode from the 10 responses is $80, which is significantly less than mean; in other words, $80 is the maximum likelihood price target for Mar 19. So which is “more correct”? $86.5 or $80? And what explains the divergence?

If you think the “outliers” here ($110, maybe $105) are just foolishly off and believe they’ll correct their views over the coming 3 days down to $90 or $95, then you should believe $80 is more correct. However if you think there truly is disproportionate risk to the upside in price movements for the next 3 days, then you should believe $86.50 to be more correct.

This simplified thought experiment paints a decent picture of what’s currently going on with $AI in the real markets. See graph below showing the price target estimates set by all active options traders (aka the implied probability distribution curve). While no options trader literally said “I think $AI will trade at X,” X can be solved-for mathematically for each transaction based on the purchase/sale price of the options contract and a method called Breeden-Litzenberger. If you want more details on the math, just DM me.

On the three closest expiry dates, the market assumes there is disproportionately higher downside risk in price movement. You can tell based on the skewed-right shape of the probability distribution curve (i.e. the peak a.k.a. “maximum likelihood estimate” is to the left of spot shown by the dotted line meaning most folks would set their price target below $86.19). So both fundamentals and quants agree that the stock has more to fall.

buy puts in the "A" and "B" range

Now most importantly, where are there good trading opportunities??? How much 🍗🍗 can I expect to make?

• One play is to buy some close OTM April 16 puts if you think $AI has more to drop in the next month. Take a look at where I circled “A” on the graph.

• If you expect AI to hit 65 before expiry, you can buy the 75 strike puts (at $4.70 as of writing), and realize an ROI of 530/470=113%.

• Alternatively you can buy the 70 strike puts (at $3.10 as of writing) and realize an ROI of 190/310=61%

• Next, look at the pair of puts labeled “B” for July 16 (one at 50 strike and one at 55). Remember how there’s the annual FY21 earnings release in May!?! If the entire Street hasn't awakened to their senses yet, this will be the catalyst. If $AI drops to $42 by mid-May and you buy the 55-strike puts today ($4.20 as of writing), you're looking at an ROI of 880/420=210%!

• Group "C" is overpriced. Don't buy those ITM puts!

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(3) The "apes vs. wall street" argument

Thirdly and lastly, I present the “us vs. the Street” perspective. Take a look at who’s currently long C3, ranked by % ownership from top to bottom. The story goes like this: growth equity investors (like TPG) get “first dibs” at some valuation, pass the hot potato to banks and “fast money” hedgies (like Tiger and Tudor) during IPO at some much higher valuation (where high net worth individuals get “second dibs”), who then pass the hot potato weeks or months later to “real money” pension/mutual funds at even higher valuation (where apes like us keep our retirement plans… so we get “third dibs”). But third dibs is last dibs; it’s a burden not a privilege. Because by that point, when the music stops, we apes get stuck with these overvalued tubers and there’s nobody lower down the totem pole to dump them onto.

In case you thought you had no exposure to C3, think again! Do you own VTS? Does your 401(k) plan own it? Do you own small-cap indices? Mutual funds and ETFs are where bad stonks get swept under the rug to hide amongst the good ones because most retail investors don’t know or don’t care enough to actually look at the full list of holdings!

🦍🦍Unite, we apes gotta work together to cancel out all the bad stonks we're passively owning!! PUT 'em out!

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EDIT: Options Visualizer Tool is now hosted! Still working on some of the explanatory descriptions but wanted to get this out to y'all ASAP: http://stonk-math.com/

What other tools and features do y'all think could help you make more informed trading decisions? Tell me and I'll build it!

May 1, 2022 -

Hello fellow regards,

Since SNOW went south real fast and CRM + MARA will drop more when casino opens, this is the plan for Today:

Both C3.AI + PSTG are up premarket and I think they will be similar to ACMR yesterday. Useful for a quick pump & dump by EOD. Maybe C3.AI stock jumped due to CFO change, idk. But PSTG:

Pure Storage (PSTG) came out with quarterly earnings of $0.50 per share, beating the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Pure Storage shares have added about 16.3% since the beginning of the year versus the S&P 500's gain of 6.5%.

Another play could be PSNY, if will jump to 2.3-2.5, but who knows. Although the ship may have sailed yesterday

Let me know how we can lose money on Thursday

April 19, 2025 -

Yolo!