What Happened:
Shares of secondhand luxury marketplace The RealReal (NASDAQ: REAL) jumped 7.01% in the afternoon session after Scion Asset Management, the hedge fund run by Michael Burry, who gained fame for betting against the housing bubble, revealed a stake of more than 684K shares in its latest filing. The move may spark interest and sway market sentiment given Burry's track record.
What is the market telling us:
The RealReal's shares are very volatile and over the last year have had 120 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 20 days ago, when the stock gained 8.7% on the news that the company is on the radar of private equity suitors for a possible acquisition. Earlier this year, the company presented a new savings plan to reduce operating expenses, including downsizing staff and optimizing its real estate footprint. In line with this plan, The RealReal will lay off around 230 workers, representing around 7% of its workforce.
The RealReal is up 18.8% since the beginning of the year, but at $1.30 per share it is still trading 65.2% below its 52-week high of $3.74 from May 2022. Investors who bought $1,000 worth of The RealReal's shares at the IPO in June 2019 would now be looking at an investment worth $44.81.
Is now the time to buy The RealReal? Access our full analysis of the earnings results here, it's free.