Appen, Entropy, DCF Models & Investor Behaviour, page-116

I'm not concerned at all about the current price action since those shorting the stock will have to buy their shares back eventually. There's no reason to suggest Appen will not reveal y-y growth in next weeks report and the potential for a miss on Appen's own guidance has already been priced in. It looks like even if next weeks report is negative this will have largely already been price in as well. The biggest hit is likely to be foreign exchange related and not related to the fundamentals of the company in my opinion.

Even if Macquarie are correct and there is increased competition in this sector this will still not justify the current price action unless Appen were not able to sign a sufficient number of contracts for 2021, which seems unlikely. Appen is a pioneer in this space and is one of the very few turning a profit.

It seems to me there are some big players just looking to turn a quick profit and trying to leverage the current uncertainty. I don't think Macquarie is as well connected to industry as their research note will have you believe. They have essentially sold out of Appen, so they couldn't care less about the company, but it seems this is their first 'big play' for the year and I don't think it's going to pay off for them.

If they really believed their own research note (or really want to scare the market) they will need to drive the price much, much lower to $17-$19. The funny thing is, at these prices Appen will become heavily undervalued even in spite of the worst case scenario, so I can't see Appen hitting these prices even after next weeks meeting.

DYOR, not advice, GLTAH