VIRT: Adding Virtu Financial to Investing Ideas (Bear Side)

Takeaway: We are adding Virtu Financial to Investing Ideas (Bear Side).

VIRT: Adding Virtu Financial to Investing Ideas (Bear Side) - z virt

According to Hedgeye CEO Keith McCullough:

I've been waiting for one of Jonathan Casteleyn's best new ideas (on the bear side) to bounce to the top-end of the range (on decelerating volume)... and here's what I've been waiting for.

 

Shorting VIRT is a good way to express what I'm really bullish on right now (have been since July of last year), and that's market volatility.

 

Per JC, "shares of newly issued Virtu Financial (VIRT) are very richly valued and despite principal risk in their daily trading operations, the stock is being priced in-line with the exchanges.

 

VIRT has no tangible equity capital to absorb a potential trading loss and would have to draw down credit lines should their historical track record in trading break down. We estimate shares are worth $18 per share or the mid point of our scenario analysis."

 

Short Green,

KM