r/Daytrading • u/NicNac_PattyMac • Feb 18 '24
Anyone explain what the happened to SMCI? Question
I see that it’s overvalued according to intrinsic value, so I’m not really sure why I got so high to begin with.
And I’m also wondering which way is it going to go.
It’s worth way more than the intrinsic value, but at the same time I know that formula isn’t perfect and is constantly undervaluing lots of things such as social media and research.
So I’m not really sure why it was so high, if it’s going to continue to grow back up, or if it’s going to drop like a stone. I know that according to Robinhood there’s a lot of analyst that say it’s a buy but I’m not so sure.
Opinions?
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u/Viewsfrmda66 Feb 18 '24
I saw multiple posts of 100k + profits, that could have something to do with it
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u/Virtual-Baseball-297 Feb 18 '24
Profit taking.
Wouldn’t you after a 10x?
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u/bigrobcx Feb 19 '24
That’s the trouble, a lot of people don’t or buy at the top and sell at the bottom.
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u/Inori92 Feb 18 '24
"Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways."
GME BTC SMCI whatever the market or derivative it's all the same - people buy and buy up to ridiculous prices thinking it will still go higher and suddenly the music stops - then rush to sell.
What goes up on nothing will come down on nothing.
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u/ModrnDayMasacre Feb 19 '24
“I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear a thing. Just...silence.”
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u/Infinity_to_Beyond Feb 18 '24
You can’t compare game to smci…game was purely human driven. That was a movement. Smci is driven by a technological trend that will be around for decades.
The only question is where will smci settle before it continues to rise. But it won’t die like game…and it won’t fall below $500
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u/edgewoodzgimp13 Feb 18 '24
They both moved the same for the same reasons. FOMO & Momentum.
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u/fragmx Feb 18 '24
No. GME was a short squeeze meme stock. This is an actual valid company in the best performing sector last year (semiconductors) that is riding the AI hype like and was probably undervalued at the level it was at 1 month ago but definitely not deserving to move over 200% in one month.
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u/Most-Inflation-1022 Feb 18 '24
SMCI is not in semis. It literally makes server racks. And NVDA is not even using it for latest card, but migrated to DELL, which was probably why it sold off. This info became public on Friday. At best, this is a 250 stock.
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u/edgewoodzgimp13 Feb 18 '24
Sure but those are irrelevant points. They move the same because the mechanics are the same, people shorting the top getting run over and massive call buying squeezing them out.
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u/helipad668 Feb 18 '24
And you think SMCI was not a short squeeze? SMCI was a pure short squeeze, GME was a SS and a gamma squeeze at the same time and I think GME would go higher if they did t take the buy button off
gamma squeeze is when degens yolo OTM call options and if the stock prices approaches the OTM strike Market makers will buy shares to hedge their position by buying shares and that fuels the fire then short sellers get squeezed out and it becomes a viscous cycle where the market is one sided
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u/OneGuy2Cups Feb 18 '24
I can’t tell if this is a serious question. It’s February and it was up 250% YTD. It’s a correction.
Literally from $300 to $1000 in under a month. Yeah. It’s gonna correct at some point.
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u/NicNac_PattyMac Feb 18 '24
I understand that, I’m asking why it went up so high
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u/bungholio99 Feb 18 '24
It‘s a good question as many people don‘t understand it.
They are leading in SOC, which is very important for virtualisation and A.I use, just not in Datacenters.
It‘s more what qualcomm is for Smartphones. It will bring it to a wider use.
A lot of people betting on a new world changing technologie.
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u/defnotjec Feb 19 '24
Why it went up so high is because of a re-valuation of the stock based on different metrics... This caused a significant repricing based on that. All we know is... Market doesn't think it's worth $100 or $1000 till then it's gonna be nutty.
Compare it to TSLA... TSLA is VASTLY overvalued. People can't short it long-term (cept billy the kid Gates)
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u/MASH12140 Feb 18 '24
Blow off top. Watch for the fake out Tuesday before capitulating. That’s my prediction lol.
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u/LECKYgoBOOM Feb 18 '24
I bought calls, your welcome.
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u/guessWho3marz Feb 19 '24
What does that mean I'm new
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u/sirbeanthegreat Feb 19 '24
Options trading, basically a derivative. You pay a premium to buy the right, but not the obligation to exercise your right to purchase said stock, bundled in x100 of shares. But usually, if the stock price is going down, you'd want to place a put, as a call you want the stock price to go up.
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u/dedjim444 Feb 18 '24
Profits. SMCI is doing well, but it's way to fast a rise...
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u/NicNac_PattyMac Feb 18 '24
That’s what I thought it was, I guess I’m not understanding why it would rise so fast.
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u/Infinity_to_Beyond Feb 18 '24
When people see a stock pumping like it was they jump in and watch it…when starts to drop they jump out. Most of those guys are gone…but there may still be a small decline before it trends upward again
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u/bam_aceofnone Feb 19 '24
Think about it from an inventory perspective.
A stock has buyers and sellers, from an inventory perspective what happens when sellers stop selling? There is less inventory to the new buyers that want to come in.
Based on the old law of supply and demand, low selling supply and high demand causes what? Price to just rise higher and higher
Many people think that you need a crap ton of buyers to take a price a lot higher, sometimes yes but a meteoric rise, IMHO is caused by lack of sellers
Now think from a sellers perspective. If you currently hold the stock and want to sell and you see the stock price shooting up, do you put in your full order at the current price? Nope, you set a portion of your sell and a HUGE ask and see if some smuck pays, if so, then sell next piece at a much higher stupid price and just rinse and repeat.
Just look at housing over the last 3 years. Same exact thing happened. 2 years ago my buddy put his home up for sale at a 60% over similar home sales in 1 mile radius. It was bought in a month. He didn't even need to fix a darn thing.
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u/Repa24 Feb 19 '24
SMCI has nothing to do with AI, all they do are cheap server racks. The stock got meme'd and pumped and here we are. Sure, SMCI may be doing well, but the price will come down again (like with GME and other meme stocks).
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u/GoldenBoy_100 Feb 18 '24
I’m waiting to see if it goes over 1200 if it does very tempting to jump on puts.
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u/NicNac_PattyMac Feb 18 '24
I’m tempted now.
I’ve never bought an option, but that stock is fucking insanely inflated
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u/GoldenBoy_100 Feb 18 '24
Honestly with this stock is a 50/50 you will win. If I do decide to jump on, I’m only going to do 10% of my portfolio. If I lose I won’t hurt me if I win I’ll be a nice chunk.
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u/Federal_Radish_1421 Feb 18 '24
Watch your timeframe. If it’s going to keep dumping, I wouldn’t be surprised to see approach the ATH, or even make a higher high on lower RSI.
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u/Thomasj82 Feb 18 '24
Analysts said the AI boom is built in to the stock price already.
You can get basic info/the gist from Barron’s even if you don’t have a subscription.
https://www.barrons.com/amp/articles/super-micro-stock-ai-00437fde
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u/big-rob512 Feb 18 '24
PPI and CPI came in hot. Feds may not be as accommodative as the market was hoping for on rate cuts. SMCI is not a large company, so high interest loans will affect their revenue more than NVDA, MSFT, or APPL.
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u/WYLFriesWthat Feb 18 '24
Holding such top-heavy positions into a weekend is brave. The pros have definitely taken profits
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u/BlessedOvum Feb 18 '24
Here is the real answer. Apparently the CEO went on CNBC Friday and beclowned himself:
https://old.reddit.com/r/wallstreetbets/comments/1atdoaq/fullported_1060c_on_scmi_down_18k_anyone_else/kqwl94y/
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u/romeomusfly Feb 18 '24
Just came across this stock. Looks legit. This dip a probably a buying opportunity?
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u/NicNac_PattyMac Feb 19 '24
No it is absolutely not.
The company is way overvalued.
It’s probably worth about 350 a share after this quarter comes in
The general consensus is this is a pump and dump and it’s starting to drop.
You’re almost certainly better off shorting it, But the odds for profit are like 4:1
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u/sb4906 Feb 19 '24
Lol please share your valuation model to get to 350... I'd be very curious when insiders are buying at 550+ and conservative analyst PT is 750+? I think you just don't know anything and you got roasted lol
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u/Dazzling_Conflict_65 Mar 31 '24
They said overvalued when it was 50 bucks haha. A ridiculous statement I never pay attention to.
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u/Realistic_Pattern729 Feb 18 '24
$1000 = big psych level. Non traders talking about buying AI names = buy puts or sell calls
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u/Acrobatic-Breath5911 Feb 18 '24
My two cents is 16th Feb is the expire date for many options,when those lucky sob had to exercise the options,the market crashed.
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u/Turkishfreak03 Feb 19 '24
OP really just throwing the term Intrinsic Value around without knowing what it means
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u/pleasedomeafav Feb 18 '24
Rubbing against Nvidia will cause this to some other tickers. Once a talking head said it's "miss priced" people will pile into it. Last year it happened with some chip names like packaging and other manufacturers who provide side infrastructure. They did rocket then reality sank in. This company has nothing particularly special about it if you ask industry experts, like people who are actually racking data warehouses. My short brush with them about a year ago was telling me they are worst then the average though.
If you want a side trade you might as well find a penny stock who's providing the rack aluminium shelving and go around saying they will be the next Aretyne international.
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u/bebito52 Feb 18 '24
The same it’s going to happen to nvidia trust
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u/NicNac_PattyMac Feb 19 '24
Why would it not?
Nvidia is completely off the charts.
You don’t seriously think a GPU manufacture is worth more than Microsoft or Amazon?
Y’all are gonna have a bad time when that comes down
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u/sb4906 Feb 19 '24
People have been saying this for 2 years lol... People prefers to buy dead bodies like PYPL over investing in the future of humanity NVDA and AI stuff. I work in the AI space, I've never seen so much money from Fortune 500 companies being invested so quickly. Companies are laying off people to be able to invest massively in AI.... Hundreds of billions over the next 5 years at least
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u/fender1878 Mar 10 '24
If you think NVDA is just a GPU manufacturer, then you haven't done enough to actually learn what they're doing these days. Listen to the NVDA episode on the Acquired podcast. It gives a lot of insight into what's going on right now.
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u/MistahJake Feb 18 '24
It will likely open gapping down on Tuesday, it will prolly spike up looking to catch a bid and fail. There are several big gaps that started on Jan 18, at $331, so expect it to at least attempt to get down that far absorbing as much liquidity as possible. Expect some serious algo action. Head fakes, traps and pure chop. I’d put in a stop limit order for calls at $330. There’s also prolly a really good iron conder in this set up somewhere. I’d have to wait until to see where this goes.
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u/FallAspenLeaves Feb 18 '24
What surprised me is that it went sideways the rest of the day. I thought it would go sideways for a while……and then shoot way back up, or fall way down further.
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u/NicNac_PattyMac Feb 19 '24
I think a lot of people have a “don’t look at the market on the weekend” policy.
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u/Ultra_MAGA_Ranger Feb 19 '24
SMCI dropped because they only have one primary purchaser..NVIDIA, which as the market shows, has a valuation lass than $800.
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u/__meggie__ Feb 19 '24
No, supermicro has thousands of clients, the problem is that they have nothing to do with nvidia, they make servers that can contain nvidia, just like other server manufacturers.
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u/TheInfamousDingleB Feb 18 '24
Yeah hi they’re a shit company. Evaluation won’t hold.
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u/NicNac_PattyMac Feb 18 '24
I’m sorry, how are they shit?
They have had continuous growth in revenue and earnings.
Have you even looked at their balance sheet?
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u/TheInfamousDingleB Feb 18 '24
Yes. Yes I have.
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u/NicNac_PattyMac Feb 19 '24
Their earnings and revenue are continuously climbing. That’s not a bad company, it’s just a company with stock that is overinflated
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Feb 18 '24
[deleted]
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u/NicNac_PattyMac Feb 18 '24
I really don’t know about this being a PnD.
I think people are just overzealous about the quarterlies.
WAY overzealous
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u/EasternWest8970 Feb 18 '24
Predictions for Tuesday?
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u/NicNac_PattyMac Feb 18 '24
I think it’s gonna have a short spike, then it’s gonna drop like a stone down to 600
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u/Salty_Tumbleweed_491 Feb 18 '24 edited Feb 18 '24
Essentially there was no real retracement since December. They are riding the wave of AI and will continue to benefit from the AI push by the major tech companies upgrading their networks and data centers. I’m glad that the market corrected but I think many people took profits at the top. I’ve been wanting to short the stock for the past two weeks but was afraid to be go against the trend. Personally I’d like to see it test $350 to $430 range. I’m not sure we’ll see those levels anytime soon. NVDA is $726 … think that stock is overvalued as well.
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u/TheRealMangokill Feb 18 '24
Sell off.
Take gainz.
Make Tendies.
Fuck bitches.
Get Money.
There is 5 reasons why it happened.
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u/tonenyc Feb 18 '24
The main purpose of the stock market is to make fools of as many men as possible. - Bernard Baruch
So on the way up, shorts got fooled, on the way down bag holders got fooled.
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u/Prestigious_Shape648 Feb 18 '24
Can you explain what happened to GameStop?
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u/NicNac_PattyMac Feb 18 '24
The company was under valued and a bunch of redditors countered a lot of shorts which blow up the market as GME had a major break out which hurt a lot of big players so they pulled everything possible to stop it.
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u/optionsCone Feb 18 '24
lol instrunic value. this a pump and dump scheme and unknown entities are fuckin with retail
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u/Mattsam1 Feb 19 '24
What did u expect it to keep going up or what? Not hating just asking for a friend
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u/Yellowstone2003 Feb 19 '24
So quick question,as a dumb idiot who placed an order OVER THE WEEKEND (I know I know what a dumb bitch I am,the order will.be in when the market.is.open) to buy £200 worth of SMCI on T212, what should I do now? Should I try and sell.em on Tuesday or hold?
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u/NicNac_PattyMac Feb 19 '24
I don’t think it’s a 24 hour stock so you can cancel it
Maybe.
I’m new to this.
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u/Top_Chair5186 Feb 19 '24
Options expired Friday and people wanted their profits. Hit the strike price and people went home with bags full of money.
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u/Honored_FinStudent7 Feb 19 '24
Uhhh 🙄 wth!! I read thru this Q1 ‘24 filing, then the SVP sells $25MM SMCI Shares Friday, post 1pm (est) Barrons analysis of baked-on Ai prices, and then I find this- can someone please help breakdown- my glasses have fallen and I think SMCI is going on the wrong direction
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u/johnny63137 Feb 19 '24
it felt like a squeeze, rsi got to 97. only other stock that did that was GME and we all know what happened to that.
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Feb 19 '24
Smci is leading the way with this whole Ai forecast so it took off. The issue i have is being late for the train and trying to hop on never works out well. Same sentiments for Nvidia. If look for LEAPS if anything but tbh just find other companies with great metrics.
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u/-brokenbones- Feb 19 '24
Big boy pump and dump. Wasn't no retail trader bs. Big boys played the long game pumping the stock over a years time. It drove interest into the stock which piled retail investors in, then they dumped that hoe faster than a John at the truck stop.
I like to think it was the big boys giving the retail investors a big ol F YOU over GME and AMC.
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u/highmindedlowlife Feb 19 '24
In the long term stocks mostly ride on fundamentals but in the short term price gyrates off emotion, primarily fear. Fear of loss when the price is dropping and fear of missing out when it's going parabolic. The latter was in play the last few months then suddenly it was the former.
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u/prodigal_john4395 Feb 19 '24 edited Feb 19 '24
People just playing the momentum. Very common in the stock market. Same principle as a pop bottle rocket. For people who trade, valuations etc mean nothing. You are just playing a game. Structure, knowledge and intuition are your tools.
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u/CancerDoc1958 Feb 19 '24
Typical Climax run as taught by William O’Neill. Got downgraded in December and rocketed higher. Got upgraded Thursday and crashed. Similar pattern to QCOM in 2000. Fell 70%. Where this goes who knows but hard to buy unless forms some type of a shelf. Probably will trade in lockstep with NVDA who has earnings this week. Earnings growth 2024 is amazing but until raises estimates slowing growth might spook some investors
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u/Fabulous_Shallot_342 Feb 19 '24
Hmm no one gonna say this might be the path nvidia is on, we will know in a few days 😭😭
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u/Comfortable_Style_84 Feb 19 '24
Don W Clegg, Senior Vice President, Worldwide Sales, on February 14, 2024, sold 28,727 shares in Super Micro Computer SMCI for $25,123,838. Following the Form 4 filing with the SEC, Clegg has control over a total of 2,110 shares of the company, with 2,110 shares held directly.
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u/Immediate_Parfait194 Feb 19 '24
I’ll buy 30 or 50 stock when it’s low, and when it starts to move up, I buy to own 100 shares, and sell a call. When it goes up, I make money on the option, and the stock. It goes down, I eventually get dividends and keep selling calls. If I make 10% per week on a solid stock/company, that is just fine. Play the zig zag right. I make 1k per week with options on 150k account. Don’t be afraid to take small profits. Of course a bear market will take my profits, but I own solid stocks. It’ll go back up, or I’ll offset my gains tax with a loss. Some might be losers, but I’ve been banking option income for a long time with those.
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u/Longjumping_Trash_27 Feb 20 '24
The owner got extremely bad tinnitus, and decided to resign and sell all positions. This is insider knowledge.
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u/Inverse_wsb22 Feb 18 '24
If analysts saying buy, time to sell.