After reaping a 26% gain short-selling ANGI (NASDAQ:ANGI) over the past 3 months, I have decided to buy-to-close.
Similar to when I last closed my Angie’s List short in December, board members have been making small open-market purchases. Until the business model changes, nothing really will here either, but in the past, board member open market purchases have been a good short-term indicator of a bounce. The stock subsequently rose 50% from December thru January.
I also believe that the recently installed Chairman could finally light a fire under management. The firm laid off 97 sales employees and re-structured the commissions system earlier this month. Perhaps this was an admission that the current business model is unsustainable? Time will tell.
During a period when most Internet sector stocks have risen to ludicrous heights, ANGI has been a great short for me. The stock is down 50% since I my short position in October, but I believe the board shakeup could portend changes to the Angie’s List subscription model. For now, I move back to the sidelines.