Here's why I'm shorting Soundhound, a current WSB darling
Posted: Dec 09, 2024
- NVIDIA crossed $100M threshold in securities holdings which included SOUN
- SOUN artificially hyped its revenue through Amelia acquisition
- Amelia, a legacy business, represents 2/3 of Soundhound's revenue with declining performance
- Soundhound's revenue is declining despite misleading statements
- Soundhound's business model is flawed with dependence on physical product sales
- Soundhound's revenue is exposed to US tariff policies and customer concentration
- Soundhound's partnership with NVIDIA is less strategic than portrayed
- Soundhound paid a much higher price for Amelia than disclosed in press release
- Implied valuation of Soundhound is very high compared to other companies
- Soundhound stock is overhyped and potentially a poor investment due to misleading practices and declining revenue
What do people on Reddit think?
🚨 Reddit sentiment: negative - The majority of comments express skepticism and negative sentiment about SoundHound's business operations and potential for growth, with multiple users highlighting risks and misleading financial representations. Summarized comments: - SoundHound's record revenue growth is misleading and heavily reliant on the Amelia acquisition - The core SoundHound business is shrinking and highly dependent on a few key customers - The hyped Nvidia partnership is considered overblown - The company's valuation is suggested to be astronomical and unreasonable - Amelia's acquisition cost is potentially much higher than reported, contributing to misleading growth - Revenue is declining 9% year over year when excluding the Amelia acquisition - 62% of revenue comes from just two automotive customers, posing a significant risk - Sentiment on investing is generally negative, with suggestions to short the stock Stock tickers discussed: $SOUN
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