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Bullish Case: LoanDepot could capitalize on improved mortgage lending trends and tech investments, increasing investor confidence further, potentially pushing LDI above $3.50 in the medium term.

Bearish Case: Persistent cybersecurity issues and potential litigation risks may further erode confidence, driving LDI below $2, given the historical volatility shown in the return surface.

Potential Outcomes:

1) 40% chance of resolving cyber issues, restoring investor confidence.

2) 30% chance of market oversight due to strong fundamentals.

3) 20% chance of new data breach revealing larger issues.

4) 10% chance of tech recovery significantly boosting the stock.

Trading Oracle: Consider implementing a short put credit spread in the next month, defining risk while allowing profit from potential price stagnation around $2.80-$3.00. Adjust positions based on market sentiment and upcoming tech performance reports.

August 22, 2024