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So... a rumor that DTEA would become a pot play sends the stock +70% on MASSIVE volume (traded 13 mn shares today vs. 250k ADV). The company isssues a release saying 'there is no news'
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<p>So... a rumor that DTEA would become a pot play sends the stock +70% on MASSIVE volume (traded 13 mn shares today vs. 250k ADV). The company isssues a release saying 'there is no news' (we will not be infusing our tea with the weed) and stock closes down -25% as the cannaibis crazed daytraders who bid up the stock unload. While the company appears a mess, it has $39 mn ($1.5/share) or so in net cash as of most recent B/S (though likely burned some cash since) so it isn't going BK immediately - meanwhile the implied vol of the Oct/Nov OTM calls (5 & 7.5 strikes) is ~240% or so given the wild action in trading today. Buy the stock, sell the calls (in what proportion I'm still working out) seems interesting as it's conceivable that the stock retraces its losses (there was no news - just a seeming six-sigma turnover in s/h base) while the calls head toward zero.</p>
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