You have strongly recommended NUVEI for quite some time and I was hesitant after involvement with LSPD. However, when another reputable investment newsletter (with a very conservative outlook), recently recommended this loser (NUVEI), I decided to take the plunge and pull the trigger. Boom, down 50%.
My question is about warning signs. How can one detect such things in advance? Obviously, nobody did, but for company to loss 50% of its value in less than one month, there must be something? No insider selling (or buying) unless it was done another way. The insiders must have known that they were going to lose half of their investment. Maybe they don’t own much? No idea?
I think something stinks here.
Anyway, I am off to Sleep Country.
Insiders cannot predict market 'reactions' any better than anyone else. Insiders own 1% but there has been no material transactions in the past two months. The degree of the decline confirms that it was a shock to all investors. That being said, insiders must have known there was the potential loss of a big client. This information probably should have been press released at the time it was known, and not just with the quarterly results. NVEI's explanation ('they were not a good fit') didn't exactly inspire confidence, either. The sales forecast cut was minor, but EBITDA guidance fell by 'at least' 8%. Still, the stock reaction was harsh. But momentum has a way: multiple brokers lowered targets, and investors see leverage as more of an issue if growth slows. The stock had done very well into May when it dropped on the short attack. But it was still well up on the year in mid-July so the quarter resulted in some harsh profit-taking/reversals. Could management have handled this better? Certainly. So this adds to the credibility issue. We would not be surprised to see some heads roll here, or an activist shareholder get involved.