YB new stock pitches (Mon, Jul 28)

Groupon (GRPN) is facing significant risk as it distributes Microsoft products through third-party vendors who operate SharePoint networks with foreign administrators, particularly Chinese. Consumers purchasing these heavily discounted Microsoft 365 products through Groupon unwittingly connect to these foreign-controlled networks, where any files saved to OneDrive or SharePoint become accessible to these administrators. Despite the clear data security implications, Groupon actively promotes these cheap SKUs through advertisements and social media to boost revenue. With a market capitalization of just $1.36 billion as of July 23, 2025, Groupon conducts minimal due diligence on these vendors, whose data collection value likely exceeds Groupon's entire market cap. The issue is particularly concerning amid ongoing nation-state cyberattacks attributed to Chinese actors exploiting SharePoint vulnerabilities. Given the recent government crackdown on foreign-backed operations targeting Americans, Groupon faces substantial risk of federal investigation, potentially leading to suspension or complete shutdown of operations, making GRPN an attractive short opportunity.

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NewPrinces S.p.A. (NWL.MI), formerly Newlat Foods, is an Italian food conglomerate executing a pan-European expansion strategy by acquiring mature, neglected food brands from multinationals like Kraft Heinz and Mitsubishi. The company focuses on improving production efficiencies and reducing working capital in these acquisitions to enhance their value. In July 2024, NewPrinces made its largest acquisition to date, purchasing Princes Limited, a British food producer with £1.7 billion in revenue, which more than tripled NewPrinces' revenue base. Following this acquisition, the company plans to list 25% of its now majority-UK business on the London Stock Exchange later this year. NewPrinces has continued its acquisition spree, recently buying a Diageo factory in Northern Italy and agreeing to acquire Kraft Heinz's European baby foods business for €120 million. While shares have appreciated in response to these successful acquisitions, they remain attractively priced, with rumors of another significant acquisition in the works that could potentially drive the stock price higher.

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InMode Ltd. (INMD) presents a compelling short opportunity despite appearing attractive to value investors with its historical growth, 3x earnings ex-cash valuation, and aggressive share buyback program. Revenue is rapidly declining as competitors gain market share, and when annualizing the most recent quarter, the valuation increases to 10x earnings ex-cash, which isn't particularly cheap for a business in decline. Most concerning is the drop in consumables and service revenue, indicating decreased utilization of existing machines—a fundamental weakness in the business model. Despite the ongoing buybacks, INMD appears to be a value trap that will likely underperform the market going forward, making it a unique, uncorrelated short opportunity.

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