Short Seller: This Stock is "Running on Fumes"

Report: WTRH vs. UberEats and DoorDash is like a JV team playing the Lakers

by Andrea Kramer

Published on Mar 20, 2019 at 2:04 PM
Updated on Mar 20, 2019 at 2:25 PM

The shares of food delivery concern Waitr Holdings Inc (NASDAQ:WTRH) are swimming in red ink today, in apparent reaction to brutal commentary from The Friendly Bear. Specifically, the analysts opined that WTRH stock is "running on fumes" and "unlikely to exist in 18 months." Along with citing an "alarming" cash burn, The Friendly Bear also pointed out the growing competition from UberEats and DoorDash, saying WTRH looks "like a JV high school basketball team facing the Kobe/Shaq LA Lakers." As such, the analyst set a $1 price target for the security.

Against this backdrop, Waitr stock is down 10.1% to trade at $12.45, at last check -- set for its worst day ever. The shares have traded rather erratically since surging in early October, spiking to a record high of $15.06 in mid-November, before quickly pulling back to support at the round-number $10 level. More recently, WTRH is still up more than 15% so far in March, bolstered by well-received earnings and upbeat analyst attention -- something else The Friendly Bear took issue with.

WTRH stock chart March 20

Specifically, Jefferies last week started coverage of Waitr with a "buy" rating and $18 price target -- an endorsement "based on fluff," according to the aforementioned short seller report. Currently, all three brokerage firms following WTRH maintain "buy" or better opinions, and the consensus 12-month price target of $18.67 represents a premium of nearly 50% to the stock's current perch.

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