SoundHound AI Stock ATTACKED By Short Sellers! What Does It Mean?

Momentum Investor
21 Mar 202406:36

TLDRThe video discusses Sound Hound's current market situation, addressing allegations made by short seller Cppy Bar and recent downgrades by Wall Street analysts. The author refutes the claims, highlighting Sound Hound's differences from chat GPT and normal customer churn. Despite the bearish price action, the focus is on the company's potential with ongoing talks with top restaurant chains. The speaker remains bullish, seeing the current situation as a consolidation period with potential for recovery, and maintains a target price of $12.

Takeaways

  • 📉 Sound Hound's stock price is experiencing weakness and is being targeted by short sellers.
  • 🧐 A Twitter user named cppy bar has released short reports on Sound Hound, accusing the company of misleading investors and inflating revenue.
  • 🚫 The comparison between Sound Hound's voice AI product and Chat GPT is deemed unfair, as they serve different purposes.
  • 🔄 Sound Hound has lost a key customer, Mercedes-Benz, but this is considered a normal part of business operations.
  • ⚖️ Cppy bar's credibility is questioned as he was previously sued for defamation by Safety Shot, another company he targeted.
  • 🤝 Sound Hound is reportedly in talks with top 10-15 restaurant chains in the U.S., which could significantly boost their revenue.
  • 📊 The market is concerned about the lack of commercial news, leading to uncertainty and bearish price action for Sound Hound.
  • 💹 Despite short-term bearish trends, the AI sector remains strong and Sound Hound's fundamentals are still positive.
  • 📈 The forecast for Sound Hound suggests a period of consolidation with share prices fluctuating between $5 and $8.
  • 💪 The speaker remains bullish on Sound Hound, holding shares and considering buying more if the price drops to $4.

Q & A

  • What is the main concern regarding Sound Hound's stock performance?

    -Sound Hound's stock is experiencing weakness and is being targeted by predatory short sellers, coupled with downgrades from Third Rate Wall Street analysts.

  • What are the key allegations made by the short seller CPPY Bar in their reports on Sound Hound?

    -CPPY Bar alleges that Sound Hound is misleading investors by comparing its product to Chat GPT, has lost key customers, and uses deceptive accounting to inflate revenue.

  • How does the speaker refute the claim that Sound Hound's product is on par with Chat GPT?

    -The speaker refutes this by stating that Sound Hound management never claimed parity with Chat GPT, and that comparing a voice AI product with a large language model is unfair and inaccurate.

  • What happened to the previous short report by CPPY Bar on Safety Shot?

    -The short report by CPPY Bar on Safety Shot was found to be defamatory, unfounded, and malicious. The author was sued by Safety Shot and forced to take down the report.

  • What is the speaker's stance on Sound Hound's management response to the allegations?

    -The speaker believes that Sound Hound's management should focus on delivering results and new customer revenue rather than engaging in litigation with the short seller.

  • Which restaurant chains is Sound Hound currently in talks with, according to their CFO?

    -Sound Hound is in talks with the top 10 or 15 restaurant chains in the United States, although specific names are not mentioned.

  • How does the speaker describe the recent price action for Sound Hound's stock?

    -The speaker describes the price action as bearish, with sustained selling throughout the day on high volume and a violation of the lower bound of the price wedge.

  • What is the speaker's forecast for Sound Hound's stock in the coming weeks or months?

    -The speaker forecasts a period of consolidation for Sound Hound's stock, with the price bouncing around between $5 and $8, unless significant news changes the outlook.

  • What is the speaker's personal strategy regarding Sound Hound's stock?

    -The speaker is holding onto their shares and remains bullish on Sound Hound. They may consider buying more if the price drops to $4, provided their outlook remains positive.

  • What is the speaker's target price for Sound Hound's stock?

    -The speaker's first target price for Sound Hound's stock is $12, although they acknowledge that this timeline may be pushed further into the future.

Outlines

00:00

📉 SoundHound's Market Performance and Short Seller Allegations

The video discusses SoundHound's current market performance, highlighting that despite the market's upward trend, SoundHound's stock is experiencing weakness due to alleged predatory short sellers. The video creator addresses two recent short reports by a Twitter user named cppy bar, critiquing the shallow content and lack of evidence in the accusations. The first accusation claims SoundHound is misleading investors by comparing its product to chat GPT, which the creator refutes by explaining the differences between the two products. The second accusation about losing a key customer, Mercedes-Benz, is downplayed as a normal business occurrence. The third accusation involves deceptive accounting practices, which the creator suggests may be clarified in the future. The video also mentions a previous lawsuit against cppy bar for defamation, highlighting the creator's skepticism towards the short seller's credibility. The creator advises SoundHound management to focus on delivering results rather than litigation, and shares optimism about potential major restaurant chain customers, despite recent bearish price action.

05:00

📈 SoundHound's Market Outlook and Strategy

The video continues with an analysis of SoundHound's market outlook, emphasizing the need to look beyond short-term price action and consider the broader market context. The AI sector's strength and SoundHound's positive fundamentals are highlighted, along with a forecast for a period of consolidation for the stock. The creator shares their personal stance on holding SoundHound shares, expressing a willingness to buy more if the price drops and their outlook remains positive. The creator's first target price for SoundHound is $12, although they acknowledge this timeline may be extended. The video concludes with a call to action for viewers to like and subscribe for daily updates on SoundHound.

Mindmap

Keywords

💡Sound Hound

Sound Hound is a company specializing in voice AI technology. In the video, the speaker discusses the company's challenges with short sellers and market perception, emphasizing that despite negative reports and price action, the fundamentals of Sound Hound remain strong and the company is actively pursuing significant customer deals.

💡Short Sellers

Short sellers are investors who bet against a company's stock by selling shares they don't own, with the expectation that the price will fall. In the context of the video, short sellers are accused of preying on Sound Hound, contributing to its declining stock price through negative reports and market manipulation.

💡Predatory Short Sellers

Predatory short sellers are individuals or entities that engage in aggressive tactics to manipulate a stock's price downward for profit. They may spread false or misleading information to create negative sentiment and trigger a sell-off. In the video, the speaker alleges that Sound Hound is a target of such predatory behavior, which is seen as an attack on the company's reputation and stock price.

💡Third Rate Wall Street Analysts

This term is used to describe analysts who are perceived as lacking expertise or credibility in the financial community. In the video, the speaker criticizes these analysts for issuing downgrades on Sound Hound without substantial evidence, suggesting that their actions contribute to the stock's negative performance.

💡Chat GPT

Chat GPT is a large language model developed by OpenAI, known for its ability to generate human-like text based on input. In the video, it is mentioned in comparison to Sound Hound's product, with the speaker arguing that the comparison is unfair because Sound Hound focuses on voice AI, which is a different technology from the language processing capabilities of Chat GPT.

💡Customer Churn

Customer churn refers to the loss of customers over a given period. It is a normal part of business and can occur for various reasons. In the context of the video, Sound Hound losing a key customer like Mercedes-Benz is mentioned, but the speaker downplays its significance, suggesting that it is a typical business occurrence and not a cause for alarm.

💡Deceptive Accounting

Deceptive accounting involves the manipulation of financial statements or reports to present a company's financial health in a more favorable light than the actual situation. In the video, the speaker disputes allegations of deceptive accounting against Sound Hound, explaining that the company's revenue recognition is based on ongoing work with an existing client and is therefore legitimate.

💡Capi Bara

Capi Bara is a short seller active on Twitter who has released negative reports on Sound Hound and other companies. The video describes Capi Bara's history, including a lawsuit from a previous target company, Safety Shot, which found the short report defamatory and led to the report's retraction.

💡Stock Price Action

Stock price action refers to the movement of a company's stock price over time, including trends, volatility, and market sentiment. In the video, the speaker analyzes Sound Hound's recent price action, noting the stock's decline and the market's nervousness about the lack of commercial news, which is affecting investor confidence.

💡Bull Market

A bull market is a period of time when stock prices are generally rising or are expected to rise. It is characterized by optimism and confidence in the market's upward trajectory. In the video, despite Sound Hound's recent challenges, the speaker emphasizes that the overall market and AI sector are still in a bull market, suggesting a positive long-term outlook for Sound Hound.

💡Consolidation

In financial markets, consolidation refers to a period when a stock's price moves within a relatively narrow trading range, indicating a pause or stabilization before the next significant price movement. The speaker in the video suggests that Sound Hound is entering a consolidation phase, where the stock price will fluctuate between $5 and $8 until there is a significant market-moving event.

Highlights

The market continues to go higher, but Sound Hound is experiencing weakness.

Predatory short sellers and Third Rate Wall Street analysts have recently targeted Sound Hound with downgrades.

The video discusses short sellers and the uploader's lack of concern regarding today's price action.

The uploader is not a financial advisor and advises viewers to seek professional financial advice.

A Twitter user named cppy bar has released two short reports on SoundHound, which the uploader finds shallow.

SoundHound is accused of misleading investors by comparing its product to chat GPT, but the comparison is deemed unfair.

SoundHound has lost a key customer, Mercedes-Benz, but the uploader believes the commercial impact is minor.

Accusations of deceptive accounting by SoundHound are addressed, with the uploader suggesting the company may clarify this soon.

The author of the short report on SoundHound was previously sued by a company he targeted, Safety Shot.

The short report author, a Brazilian resident named Eagle Apple boom, was found to be spreading misinformation.

SoundHound is currently in talks with top 10 or 15 restaurant chains in the U.S., according to their CFO.

The market is nervous due to a lack of commercial news, leading to bearish price action for SoundHound.

The uploader expects SoundHound to enter a period of consolidation with share prices bouncing between $5 and $8.

The uploader remains bullish on SoundHound and is holding shares, with a first target of $12.

If SoundHound wins a significant new customer, it could help arrest the current slide in the stock.

The uploader suggests that the best way to counter the negative sentiment is by delivering results and new revenue.

The uploader may consider buying more SoundHound shares if the price drops to $4, provided the outlook remains bullish.

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