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New Trade - 5/29/23 - RGTI


 

Rigetti Computing (RGTI) is one of two Quantum Computing stocks that I am watching. I reviewed DWave Quantum (QBTS) as well as IONQ (IONQ). I passed on both QBTS and IONQ because they both are going to need to raise capital in 24 and QBTS only had only $120k of revenues in the first quarter.


All three stocks have had big price moves in sympathy with NVDA, but only RGTI has cash to sustain ($+100m). It also has low debt (21% debt to equity), low short interest (>5%) and low Price to Sales (7.84) and Price to Book (1.03).


None of that paragraph matters to me except their cash position because I only want to date this stock, not marry it.


Back to RGTI.

Because the stock was up so much on Friday, it is HIGH HIGH risk. Also, with the pending Debt Deal shenanigans still in full swing, risk is even higher.


Therefore, I will be only doing a VERY SMALL position - like 5 contracts.


ENTRY PRICE: 1.02

STOP PRICE: .86 TO .74 (Yellow box) - loss at .74

TARGET: 1.55 (Yellow line)


I WILL NOT CHASE THIS and am fine if it gaps up even more - I will be patient.


Right now, the August 2.5Calls would be worth .28 if the stock hits the target. If it falls to the stop box, the calls would be worth .03 to .04.


The November 2.5Calls at .40 or better are a superior option in my opinion. If the stock falls to the stop, the calls would be worth .21 and if the stock hits the target, the calls would be worth .60, 50% gain. Its a R1 so not fantastic. BUT, I also believe that this company could be bought out by IBM. There are nothing but rumors on social media which are worth the paper they are written on.


MY PLAN:

I will watch the stock at the open as well as the overall market and see if weakness develops. I want better pricing which will only occur if we get a pullback.

I AM NOT ENTERING THIS TRADE YET. I am watching.


I will be releasing two other QC candidates later this week. One is an ETF which allows for some diversity and no single stock concentration.


Finally, when available, I will endeavor to add any related research materials I find or have access to. They are not to be disseminated as they are subscriber only.

 

Research Reports:

rgti thomson reuters
.pdf
Download PDF • 85KB
 

This is not investment advice. Nothing in this document should be construed as investment advice. The opinions offered are the Author's only. This document is for entertainment purposes only. Always consult with your advisors before investing any money. Readers of this document agree that they will not use this information to make investment decisions.

DO ATTEMPT TO FOLLOW THE AUTHOR'S INVESTMENT, IF ANY. THE AUTHOR MAY OR MAY NOT INVEST IN ANY COMPANIES LISTED IN THIS DOCUMENT. THE AUTHOR IS NOT A REGISTERED INVESTMENT ADVISOR AND DOES NOT HOLD THEMSELVES OUT AS ONE. THE AUTHOR IS NOT A REGISTERED REPRESENTATIVE AND DOES NOT HOLD THEMSELVES OUT AS ONE.
 



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