What is Cody planning to do with his LPS short into their report tonight…

Email from one of our subscribers:

I wanted to send Cody an email regarding LPS and heading into the earnings report tonight. What is he planning to do with his short?

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Well, I’m holding my short in this name steady.  LPS was one of the five worst performing stocks on the NYSE last quarter — just when we’d shorted it.  LPS is still down some 35% or so from where I started shorting and buying puts back just 100 days ago or so.

That means I’ve got huge gains in both the common short position and the puts.   To review though — I believe this company will end up being a major scapegoat in the entire multi-trillion dollar mortgage-gate disaster that is still developing in front of our eyes.   And that means I do expect this company heads even much lower than it is already in coming months, quarters and years.

How to play it into the earnings report tonight?  It depends on whether  you think management will be really forthcoming in just how much litigation and outright criminal fraud exposure this company has right now.   The management has no choice but to at least acknowledge some of the reality of their predicament on these conference calls, but since all financial firms, including LPS, have ridiculous leeway in how they recognize and report their numbers/losses/earnings/revenues/etc, I wouldn’t be trying to game this report tonight.

If the stock pops tomorrow, I’d welcome the chance to build this short and put position in LPS up even more than it is already.  And as you know it’s been my biggest short position since I started trading again this year after having taken a 2.5 year TV timeout.

Steady as she goes, folks.   Lots more pitches are coming…wait for ’em.