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The Case For Shorting ORGO


As many saw yesterday, ORGO was on my trade alert radar yesterday morning. The stock now has come into the public eye as more and more information is coming out. The main reason for my case for the push the other day, as the stock was coming down from 16 to about 13 on the open , is that a report came out about it's dealing with the US government.

"Value Investors Club issued a report alleging issues at Organogenesis Holdings, Inc., indicating that the wound care medical company has been improperly billing the federal government for $250 million annually. The Company also set the price for its new wound covering, Affinity, “exorbitantly high”, which Medicare reimbursed, while making the product lucrative for doctors to use through large rebates."

This seems to make a very strong case, that was there fraudulent behavior ,in its actions in its day to day operations, and repercussions are coming. But if that isn't bad enough in itself, there is also going to be legal action against the board members. INSIDER Trading reports revealed that the board members and high rank officers all started dumping their stock before the report surfaced.

Wall Street still may have hope for the stock, but with these allegations there is a strong case for a bearish run, even with the already huge 30% hit the stock has taken.

The play here is to buy either Nov 19 21 or Jan 21 22 puts at the 12.50 strike level. I believe that the stock could tank to $4-5 dollars in a month or two. You would essentially cap your risk at your investment value i.e buying $1000 worth of puts . Your upside could be great, as a drop of that magnitude would create exponential return .

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