Amazon cut a deal with Generac to supply backup generators for its data centers. Received warrants to buy $340 million in stock. Generac's share price jumped over 40 percent because investors apparently forgot what warrants are.
Warrants give Amazon the right to buy stock later at a set price. They don't have to exercise them. They probably won't exercise them. But retail traders saw "Amazon" and "buy stock" in the same headline and decided that was enough due diligence for a Wednesday morning.
Generac makes backup generators. Amazon needs backup generators because when AWS goes down for six minutes, seventeen Fortune 500 companies cease to exist. The warrants are structured so Amazon benefits only if Generac's stock price climbs higher than it already has. Which means Amazon negotiated a deal where they get generators now and maybe pay for equity later if the stock does well. Meanwhile every dipsh*t with a Robinhood account paid full price this morning.
The technical setup was garbage before the news. Still garbage after. The 40 percent move happened on hope that Amazon might buy stock in the future. Not will buy. Might buy. If conditions are favorable. And if Jeff Bezos wakes up feeling generous, which he doesn't.
This is the same company that makes investors piss themselves every time it breathes near another industry. Amazon bought a doorbell company and home security stocks tanked. Amazon opened a grocery store and Kroger lost billions in market cap. Now Amazon gets the option to buy a generator company's stock and traders treat it like a binding marriage proposal.
Generac's chart looks like someone surprised it with a defibrillator. Straight vertical line. No consolidation. No base. Just pure uncut speculation that Amazon's warrant package means eternal love. Those warrants expire worthless in most scenarios, but nobody read that part.
Forty percent in one day because maybe Amazon will buy stock later if they feel like it.
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