My point was that the stock trades on expected future annuity value of the install base. If you want to short it, you need to believe that either 1) the entire concept is bunk, or 2) the concept is real but won’t catch on to the degree expected (and therefore the 100x multiple is predicated on nothing but hopes and dreams).
If I were going to short this company, the inquiry would be bracketing that value within a reasonable range, discounting it back at an appropriate rate, and then comparing that to the stock price. I’m not sure what the current stock price discounts in terms of future annuity value because I haven’t done the math problem.
The reason I haven’t done the math is because, IMO, there are too many moving variables get a good picture, and I wouldn’t want to argue with a market that is inclined to believe the “story” (nor with a company that manipulates its stock price by not taking calls from the buy side, and being in bed with the sell side). It seems to me that you could spend a lot of time guessing and still not come up with a firm answer, which doesn’t fit my research criteria for “return on invested time.”
Further, I think the keurig is fantastic and, unlike SODA, is not a fad concept, so I would be inclined to pass until it looked like the story was petering out. Shorting into a long running growth story in relatively early innings is a good way to lose money. If I had to guess off the top of my head, this is probably in the 4th or 5th inning at the latest (though I don’t have any specific numbers to back that up).
Anyway, to me asymmetric short profiles are ones that are likely to go down a lot but “can’t” go up more than the current valuation for definable, fundamentally-based reasons – that has nothing to do with what the market does or doesn’t do. GMCR doesn’t fit that profile. Stocks like HEV, where the business is dead in the water but where the stock is trading high on hype, are good profiles.