BBAI Stock Analysis #shorts
- 3 months ago
Bigbear.ai rose 260% last Thursday in one of the biggest moves of the week.
But the story isn’t quite what it seems.
The main catalyst for the move is an apparent contract win with the U.S. Air Force worth $900 million dollars.
There was also some chatter online about the stock being a potential short squeeze given that 13% of the float was sold short ahead of the announcement.
But, the 900 million dollar award does not mean $900M in revenue is coming in.
It's what’s called an IDIQ contract which means indefinite delivery / indefinite quantity.
As Bigbear itself said, the company has simply been selected *to compete* for orders.
Some analysts are aware of this issue with Oppenheimer reiterating a price target below $1 and William Blair also believes the news is being misread.
The short squeeze thesis also looks overdone.
#stocks #investing #stockmarket #overlookedalpha #finance
But the story isn’t quite what it seems.
The main catalyst for the move is an apparent contract win with the U.S. Air Force worth $900 million dollars.
There was also some chatter online about the stock being a potential short squeeze given that 13% of the float was sold short ahead of the announcement.
But, the 900 million dollar award does not mean $900M in revenue is coming in.
It's what’s called an IDIQ contract which means indefinite delivery / indefinite quantity.
As Bigbear itself said, the company has simply been selected *to compete* for orders.
Some analysts are aware of this issue with Oppenheimer reiterating a price target below $1 and William Blair also believes the news is being misread.
The short squeeze thesis also looks overdone.
#stocks #investing #stockmarket #overlookedalpha #finance