Someone Bought $27 Million in Calls Into a 47% Crash

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The analysis focuses on NBIS, a stock that has experienced a significant decline, falling 47% from its June high of $299.86 to a recent low of $159.17. Despite this sharp drop, the stock is still up 90% year-to-date. The speaker highlights that the stock fell 36% in 17 days, requiring a 57% increase to recover to its previous levels. Significant put buying was observed in the final minutes of trading on October 27th, with $26.91 million in calls purchased over two consecutive days. Analysts have modeled potential upside targets around $301, aiming to reclaim previous highs. However, the break-even points for the March 230 calls are at $246, and for the April 260 calls are at $278, both below recent highs. Michael Burry has taken a bearish stance by shorting NBIS with June 2027 puts. The company's increasing debt, with total debt doubling to $8.4 billion by March and further financing rounds, is a concern. Despite the stock's sharp decline, revenue growth remains strong at 454% year-over-year, with a fiscal year guide of $3.4 billion. Earnings are due on November 3rd. The high short interest of 20% of the float could lead to a short squeeze if positive news emerges, but the market sentiment appears to be weighing on the stock due to increased debt and financing costs.

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