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ICARUS EXCLUSIVE: Trade Play – ASX.WTC WiseTech Global Ltd

Söze is Selling WiseTech Global

Quick Sum give a pretty good overview of the firm. “WiseTech is a provider of software solutions to the logistics industry. It develops, sells and implements software solutions that enable logistics service providers to facilitate the movement and storage of goods and information.”

WTCs target customers have been experiencing such large surges in volume that surely WTC is going to have a bumper year. There is so much online ordering taking place, that Australia Post can’t even send parcels in 7 business days let alone letters in 5.  Really AustPost ???? You’ve got one job. Pick something up and then drop it off somewhere else. It’s not like you have only just started doing this either, you have had 200+ years practice to lean on !! 

With such a massive boom in their potential market, surely there is huge demand for software that makes life easier, cheaper, faster, and more efficient? 

One would suspect the upcoming Annual Report to be released on the 19th August will see better than hoped for results, and thus a subsequent rise in the share price? Söze says No. 

Indeed, the results might be so bad, Söze is selling. (But Söze is NOT saying you should SELL because that would be financial advice, and we all know nobody can give financial advice, unless qualified to do so under the appropriate rules and regulations of this totally equal and fair world we live in).

Interesting Stuff
WTC has recently provided traders some great support and resistance sideways trades to find 10%+ with. Little downside, also little upside, but a safe play to play.

But of all the tech stocks, WTC is one of the few that hasn’t recaptured pre-kungflu highs. In fact, its either performed really badly, or was way overvalued before. But seriously, when has a tech stock ever been overvalued…..

Recent Developments
So why is Söze Selling? Two main reasons. The owner is selling, and a major investment bank is suggesting it as well.

Usually one would be forgiven for being sceptical of broker/investment bank downgrades. One could be forgiven for thinking they have an agenda. 100% they do. The same agenda we have. To make money. On August 12th, an investment bank downgraded WTC to “sell” at a reduced price target of $18.40. WTC subsequently fell 8.3% right through support levels to hit $18.95 on that ink being posted, but it seems not everyone listens to Investment Bankers, WTC closed the week up at $19.33. But bear in mind, it doesn’t take much volume to move WTC, it’s always got shallow market depth, and if someone even of a medium size comes in, it’s going to wipe up or wipe down quickly. 

Secondly, and more importantly, RealWise Holdings (Co controlled by WTC founder/CEO Richard White) sold down 2.4m shares on 30th June. Roughly 0.76% of total on issue. White got $47m and some change. Pretty interesting he sold just before EOFY, but could be due to a lot of reasons. Tax, other investment opportunities like maybe PPE and mask making business, or new car(s), or a bigger TV for his home. 

But if it isn’t tax reasons, and it wasn’t an URGENT business opp that needed funding straight away, AND White was confident that the upcoming annual report would have great news for investors, why sell so many of your shares so close to a potential massive uptick when the report comes out? Don’t know…

Söze Summary
I was actually going to buy this stock on Thursday, thinking how could they not have had killer annual figures. So of course, I did some digging, and came up with these two warning signals. Now I might argue and trade against Investment Bankers from time to time, but I would be a bold trader to place a short term trade on a stock that the owner has just sold a fairly large amount of shares on. 

With high probabilities of a downside of 15++% and a upside of maybe 10%, plus when I take into account professional sentiment, So this article that is “NOT professional advice and is NOT recommended you make ANY trading decision based on” is about me selling WTC with a 3% capital allocation position.

Söze is full of Shit Counter Points
Something to consider is WTC short positions have not been building lately, which does tend to counter my argument, but heh, a brave person one would need to be with out any previous guidance to go on, and that the market is loving any good news this reporting season. If I get my short wrong, it’s going to gap so hard on me that when the annual report comes out, I’ll remember if it for a while.

So just to make sure nobody accuses me of being selective in my information I pick. Note that two significant shareholders have recently both added to their considerable positions in the company. One would assume that if there was bad news coming, they would have got the wink wink, nod nod. Your call, you have all the info now, pro and cons, so don’t complain that I didn’t give it all to you. But remember, I didn’t say for you to do anything that could be construed as financial advice, this is a pure philosophical, Pulitzer price winning piece of prose, about what I am doing in my account.

P.s. Söze Not So Söze Good
Just so everyone doesn’t think Söze is so amazing all the time, I got hammered on gold last week. How the fvk does gold do a 7 year, 24 hour record fall in a global pandemic and with leaders around the world removing free market capitalism from society?? Who knows, all I do know is it hurt…. Big time !!!

“Not everything that can be counted counts, and not everything that counts can be counted” 
Keyser S

Stuff I read to write this Pulitzer Piece
Wisetech Global Limited Company Profile
Morning Star Corp Calendar
Why Mesoblast Northern Star Seek Wisetech Global Shares Are Sinking Lower
Finance News Network
Wisetech Global
Thomson Reuters

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