Let's Go Splunking - Splunk Inc (NASDAQ: SPLK)

I finally get to write about a stock in my line of work -- CYBERSECURITY! So awhile back, I was tracking the DMs of a few friends in my Mansa Musa Network. I don't recall which ones, but it may have been my guys from the A-Billi squad: Mario Gabelli (Gamco Investors) or Jeffrey Smith (Starboard). But long story short is SPLUNK had been underperforming in the stock world. In the regular world it's like the person that has been single for too long and is finally looking for someone to "Put a Ring on It". So, like the horrible reality TV shows of today, they announced they were looking to hook up in a very public way. I saw my buddies mentioning the value in SPLUNK, but I didn't pull the trigger early on. I was tardy and finally decided to pick up some shares ONLY when they finally announced they had found a partner. This partner was the deep pocketed company, called CISCO. They are well known for their enterprise networking and routing equipment. If you don't know what I'm talking about, it's the device most people attach to their home network for internet that allows you to have wireless or WIFI service.

Definitely do not quote me because it has been a while, but I believe the buyout price was set at $157.50. So, what I did was use a well-known trading strategy on wall street. You've heard me refer to it before at the arbitrage approach. This means if I have high confidence that the deal (or hook up) is going to get done, an investor like me can benefit from the "spread" or difference between the price of when the deal is announced and what the final buyout or hook up price is. The risk becomes IF the deal does not get done (if the bride is left at the altar), this situation becomes a train wreck. Is this possible? Yes, it is --- see my posts on Tegna. This deal was thought to be all but certain and then the FTC stepped in and said the deal was harmful for customers across the country. So, you saw a stock go from $17 to nearly $22+ and come all the way back down because the deal was under investigation and ultimately canceled.

Now back to SPLUNK. I wanted to show you all what corporate governance looks like and what ownership looks like from an investor's standpoint. I got an email telling me it's time to vote on whether I think the merger should occur. I've pasted that screenshot here. I hope and believe this means we are one step closer to closing the deal. This is a great example of how hookups can help your portfolio.

Peloton (PTON) - Is it Going Down in the DM?

 

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Also Coming Soon - a series on #HowtoInvest. People have been reaching especially after the spikes in Gamestop, AMC, and other stock to learn the basics. I self-taught myself how to invest beginning at the age of roughly 18 and have never stopped. To be a good investor and ensure you are not gambling (speculating), I'll cover (hardest parts of investing in RED):

Budgeting 101 - How to Fund Ur Investments?

Why Stocks as an Investment?

What is Ur Investment Profile + Personality?

How to Pick Stocks?

When to Buy Stocks?

How to Enter My Trade?

How Many Stocks Should I Own?

When to Sell Stocks?

Am I Speculating (Gambling)?

Peloton Interactive Inc (PTON)

I get many readers ask me the question: "What do you mean when you say Value Stocks"? Then I refer them back to my favorite analogy. I have stuck in my head, from my youth, that candy bars should be $50c. When I travel the country and have to stop at a gas station, I WILL NOT buy candy unless it's $50c. I'm stubborn like that. I'll get the king size bar only if it's $1 dollar. A value stock is when you've done your homework and know what you think it should sell for like my Reese's cups. A value investor like myself tries (key word) to only buy when I see my Reese's cups (or a stock) AT or BELOW this level. Yes, go ahead and make fun of me but I'm principled in that way. I apply the same standard to stocks. I prefer to buy when I see it on sale and have a price in mind. 

Don't believe me just watch moment: Go back and search for one of my best investments ever, Sprint. Sprint got "beat down" like they stole something, and I swooped in. When T-Mobile came calling, they offered a higher price to merge (as we say here "date" or "hook up" with) Sprint. It was truly a beautiful trade and we made lots of money. 

I think Peloton is starting to shape up the same way my Sprint trade did. This stock was once as high as $150 just a year ago. To me, Peloton is just a bike but the stock skyrocketed once it came public. It has fallen from grace to a low of $22 dollars. Like the winter olympics, you don't want a stock chart that is sloping downhill...not good.

Rumor has it companies may be sliding into their DM trying to hookup. I bought some Peloton today because it reminds me of whenever I find Reese's cups for $50c. Usually, it's a time to load up because I just don't see if often. With Peloton, I still struggle with the need for an overpriced exercise bike. I will probably need to interview some actual users to fully understand all the benefits, but I said the same thing about the Apple iPhone and many people are happy with paying for an overpriced phone. I think there is definitely a market for the "connected" use of the bike but clearly, I didn't agree with the price of the stock. I finally feel somewhat vindicated, now that the stock has cratered but it took a while to get here. Long story short, is I can see clearly now the rain is gone. And I think Pelton is worth some risk if Amazon, Apple or other suitors wanna hookup.

Symantec / NortonLifeLock - It Goes Down In The DM

It's December and I wanted to recap my best performers this year. I hope these notes serve as a way to help develop a strategy and display that it's not hard to invest in things you know.  Ironically, I trade enough that I don't know exactly who were top dawgs until I began doing a little bit of data analytics over the year. So I'll let you know who surprised me and why they made the list from my notes.

Symantec Corp. (SYMC) now known as NortonLifeLock NASDAQ : NLOK

In 2019, Symantec Corp. stumbled onto my radar. Quick background, they are one of the old guards in the IT and cybersecurity space.  They are huge and in almost every large companies data center and for consumers like you and me...many of us use their Norton Anti-Virus system on our home computers. I started hearing rumblings that the financials have not been good and the CEO was stepping down, which led the stock to fall, over 10% I believe (May 2019).  So hear is a name I know is in every large company across the globe and in many households.  So I put my alert to buy Symantec and being a little greedy I waited to pounce at an even lower price. This example shows investing is about both timing and price. 

How my trade unfolded:

Early July 2019 - News hit that Broadcom Inc. had DM'd (my version of trying to hookup) with Symantec Corp. for somewhere around $28 a share. I was right YES! But only on the time of the stock, being greedy on the price, I did NOT own any shares and the stock had probably moved up from around $22 to $26. It wasn't official because Symantec Corp. said if you like it put a bigger ring on it...$28 ain't good enough. For me, watching this was tough because it made sense, but you win some and will lose many. But never forget about the ones that got away.


July 15 2019 - News broke that Broadcom Inc. was officially no longer in Symantec Corp.'s DM. They wanted no part of a golddigger, reaching for more money. Symantec Corp. was officially left at the alter and the stock dropped big time over 15% and was back where I first found it. A song popped into my head: "You don't know what you've got until it's Gone" and I decided to finally
buy Symantec Corp. Why, it was like Broadcom Inc. had done all of the hard work of getting the phone number and then giving it to me to make the call. So I went in big because I knew Symantec Corp. should be trading around the $28 dollar range. Now that's what I call a wingman.

August 8 2019 - Yup you guessed it Broadcom Inc. had the same song in their head too and wanted Symantec Corp. back. But they were more cautious and only wanted to buy Symantec Corp.'s enterprise business which supports those big companies that I talked about...NOT the anti-virus business they sell to consumers like us. How much: $10.7 billion deal, the stock move up to the 24-25 range.

November 5 2019 - Symantec Corp. (SYMC) is no longer in the enterprise space so they are "Feeling Good As Hell" with their new focus on consumer security products and identify protection and change their name to NortonLifeLock NASDAQ : NLOK   (Note: they bought LifeLock a few years ago)

December 10 2019 - Saw news today that McAfee (owned by Intel now) and a few Private Equity Firms are DMing NortonLifeLock. So the stock has jump above $26 dollars on the news

I wanted to thank Symantec / NortonLifeLock, Broadcom, Intel McAfee, and the Private Equity Firms for giving me my best position of the year and all the drama that unfolded better than a scripted drama show or TMZ news feed because I can make $$ of this drama.  Thank you Yo Gotti and Lizzo for songs that popped into my head as I wrote this. Reminder, if I can do it you can too.  I'm tagging Symantec / NortonLifeLock because I think other suitors may be lining up. #investandchill   #investingintheDM #hookupalert