Hey there. Fundamentally, at this time nothing has changed with Lightspeed. I know it's not the answer most want to hear, but it's realistically the only answer we can give right now.
The company is facing some significant pressure due to 3 main catalysts. For one, the short report issued on the company. Secondly, the extensive selloff in payment processing companies (Paypal, Block, Nuvei, even major credit card companies). I mean when we look at a company like Block, it's trading 60%~ off highs. Paypal 50%~, Nuvei over 60%.
And finally, it doesn't help that the NASDAQ is undergoing a significant correction. In fact, if the markets hadn't of rebounded in a big way this afternoon, we could soon label the NASDAQ as officially entering a market crash at 20%+ losses.
The company reports earnings in early February. This will be an absolutely critical quarter, and one we will have our eyes on. A good quarter is unlikely to raise its price if this environment persists, but it will at least give some investors confidence.
On a price to sales basis, Lightspeed is now trading at valuations we saw during the peak of the 2020 market crash. I know it's insanely frustrating to hold this one. But it hasn't given me ANY reason to sell, so why would I sell? At current prices, this company has enough cash on hand to buy back 25% of its shares.
With all that said, as we've mentioned a bunch here at Premium, it's very important we limit our exposure to highly speculative stocks like Lightspeed. Typically, I'll take a 1% position in these companies. I've gone a little heavier on Lightspeed primarily due to the fact I added it at quite low levels in 2020. But, it still remains a very small portion of my portfolio, and a struggling share price or even a slow recovery won't impact the entirety of my portfolio too much.
As an investor who makes decisions based on the underlying fundamentals of a company and not the price movement of shares, there really isn't any more I know now than I did last quarter, rather than the fact interest rates are going to be rising. Does this justify a 75% drop in share value? Absolutely not.
We know a lot of members hold Lightspeed. Which is why we will have PLENTY of coverage when it reports earnings in early Feb.