ELD has already rallied strongly after the agricultural services business delivered a small beat for FY23 earlier in the week – MM’s thoughts on ELD FY23 result. The sharp rally was triggered by the combination of the good result and significant short position, i.e. there were ~10m shares /7% of ELD reported as short-sold. This is one stock that MM hasn’t played well in 2023, having exited in August for a 9% loss at $6.47; cutting the position looked on point when the stock fell another 15%, but this week has seen a sharp reversal of fortunes, which is what we had been originally targeting.
- We can see ELD testing $8 into Christmas, but the risk/reward is not enticing following such an explosive rally.
MM is neutral to bullish toward ELD
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