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Deja Vu All Over Again: An Unsolicited Whitney Tilson Explains Why He Is Short Green Mountain, Long Netflix

Tyler Durden's picture




 

The last time Whitney Tilson presented his "investing thesis" case in public, he got promptly anihilated as was to be expected - there is a reason why real hedge funds keep their positions secret. This time, "it will be different." Incidentally, it is not a hedge fund manager's job, no matter how tiny said hedge fund is, to plea to the broad investing public: it makes one appear like a petulant child. Their job is to outperform the S&P since inception: a task T2 still seems to find daunting...

T2 Partners performance since inception vs the S&P:

An artist's rendering of how this latest episode of unsolicited transparency will end:

http://i.imgur.com/5MEv2.gif

Full "explanation" for those very few who care:

 

 

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Sun, 11/13/2011 - 23:33 | 1874606 trav7777
trav7777's picture

dumbasses, bitchez

Mon, 11/14/2011 - 00:00 | 1874644 Careless Whisper
Careless Whisper's picture

Mister Tilson's hedge fund needs a new business model. May I suggest the following: sell worthless (aka shitty) CDOs to Police and Teacher Pension Funds, then buy Credit Default Swaps that pay big bucks when the shitty CDOs default. Why re-invent the wheel?

 

Mon, 11/14/2011 - 00:15 | 1874657 X.inf.capt
X.inf.capt's picture

WIPE OUT!

BITCHEZ!

and when that wave pushes us onto that reef....

WERE GOING TO GET TORE UP!

Mon, 11/14/2011 - 10:12 | 1875305 Pegasus Muse
Mon, 11/14/2011 - 15:26 | 1876436 Barbar
Barbar's picture

actually below 80 netflix is a good buy if you care to look at their financials.

Mon, 11/14/2011 - 01:07 | 1874753 Freddie
Freddie's picture

Who runs a hedge fund out of NYC?   I thought the good ones were in CT or even Long Island like Simons.

Mon, 11/14/2011 - 01:33 | 1874788 Freddie
Freddie's picture

LOL!  Are you serious? This guy's returns match the S&P 500?  You can get that from SPY or even the cheaper ishares S&P500 ETF.  I wopuld guess you can get an S&P 500 ETF for less than 20 basis points.  Who invests with this clueless clown?

Sun, 11/13/2011 - 23:34 | 1874608 caerus
caerus's picture

too little too late i think...

Sun, 11/13/2011 - 23:37 | 1874610 Hopium Dealer
Hopium Dealer's picture

Netflix will never be a $150 stock again, let alone, $300.

Mon, 11/14/2011 - 00:12 | 1874659 onarga74
onarga74's picture

Jackin their prices up when everyone was trying to figure out what to cut back had to be one of the top corporate blunders of the year. 

Sun, 11/13/2011 - 23:46 | 1874623 Freebird
Freebird's picture

Exactly, who friggin cares?
Regarding these muppets, that vegetable byrani has been quiet lately no

Sun, 11/13/2011 - 23:50 | 1874629 tom a taxpayer
tom a taxpayer's picture

Uh-oh…Obama and Christine Lagarde - the hot, new POWER couple.

http://today.msnbc.msn.com/id/45279703/ns/politics-white_house/

  Was that Obama surfing in Hawaii?

 

Mon, 11/14/2011 - 00:07 | 1874653 whoisjohngalt11
whoisjohngalt11's picture

They do make a beautiful couple ;-)

Mon, 11/14/2011 - 01:14 | 1874765 slewie the pi-rat
slewie the pi-rat's picture

i think he's a little bit old for her, altho christine will never be the darling of the private high school boyz like our blythe

if we had a caption contest:  "Qadaffi's gold?  No...Sylvio told me you had it..."

Mon, 11/14/2011 - 02:28 | 1874871 MsCreant
MsCreant's picture

He wants to suck her nose. I feel the tension.

Sun, 11/13/2011 - 23:57 | 1874640 disabledvet
disabledvet's picture

What did i do to lose my blue status?

Mon, 11/14/2011 - 00:04 | 1874649 jmoney
jmoney's picture

When was the last time Whitney had an ORIGiNAL thought.....green mountain after einhorh, Lear after Ichan, and who knows how many positions following ackman .....why does anyone listen to this follower?

Mon, 11/14/2011 - 00:10 | 1874655 navy62802
navy62802's picture

The T2 fund performance chart above also shows a lack of originality and foresight.

Mon, 11/14/2011 - 01:44 | 1874806 Freddie
Freddie's picture

He could have just bought the S&P 500 or do what "smart" mutual fund managers do - buy Berkshare Hathaway.

Mon, 11/14/2011 - 00:04 | 1874650 Astute Investor
Astute Investor's picture

Publishing his investment treatise on a Sunday?  Tilson must be trying to show he is the hardest working man in show business, but it won't change the fact that T2's returns still suck.

Mon, 11/14/2011 - 01:08 | 1874755 Freddie
Freddie's picture

Maybe Tilson can get a job as a junio analyst at Bridgewater.  Sucky returns only last so long in the hedge fund world.

Mon, 11/14/2011 - 00:12 | 1874658 Roy T
Roy T's picture

 

Tilson completely ignored the huge off balance sheet content expense items that NFLX has to bring on eventually, including the recent one billion dollar deal for hit shows like Gossip Girl or some other nonsense.

Mon, 11/14/2011 - 00:17 | 1874660 MrPalladium
MrPalladium's picture

Oh, boy!!

These investment analysts do not understand the entertainment business and do not understand the power of copyright. Netflix streaming is a pipeline operation and they do not own the pipeline. Amazon actually does the streaming for them.

In contrast, the media libraries and content owners will, over the long haul, extract all the profits. The price of content for Netflix has gone up ten fold over the past 3 and 4 year licensing cycle, and nary a word in the analysis about whether this catastrophic cost trend will continue.

What nobody seems to understand is that, unlike patent protection, copyright is for all practical purposes perpetual. The fact that Reed Hastings fails to understand this simple fact is fatal to the long run profitability of the company. Back when NFLX was trading north of $280, it could have purchased LionsGate (LGF) at a 100% premium for about $2 billion in stock. If it had done so, NFLX would have attained a blocking position. No other streaming company could ever have purchased the rights to stream Lionsgate's 8000 film library plus its television distribution properties. If Hastings really believed in the future of streaming he would have pursued several other media properties simultaneously as well.

What he did instead was to sell a huge percentage of his personal stock holdings while NFLX was the coctail talk darling stock.

He missed the boat and will end up, if he is lucky, with the equivalent of a new and unexciting public utility equivalent driving up the stocks of media companies such as LGF.

Mon, 11/14/2011 - 09:08 | 1875196 fourchan
fourchan's picture

correctomundo!

 

that entire report misses that.

Mon, 11/14/2011 - 00:14 | 1874662 Buffet's Jet
Buffet's Jet's picture

I'm gonna fade this if that's all right

That guy is right in the pit about to get barrelled and just leaps of his board into the lip like that. WTF? Oh wait I get it. I didn;t know Tilson could surf

 

Mon, 11/14/2011 - 00:20 | 1874665 Conman
Conman's picture

The momo ride is over.

Mon, 11/14/2011 - 00:26 | 1874674 SunBlaster
SunBlaster's picture

Even the name Netflix implies you gonna get screwed, it's worth $35-$40 per share max, not more than that.

Mon, 11/14/2011 - 00:32 | 1874689 random shots
random shots's picture

Geez, Tyler...the way you are kicking the poor guy you think he forgot to pay his Zero Hedge advertising dues...err...uhh...yea...

Mon, 11/14/2011 - 00:44 | 1874712 Coldfire
Coldfire's picture

You'd have to be an idiot to give money to this Tilson fellow. Those performance charts are fu-gly.

Mon, 11/14/2011 - 01:20 | 1874777 chump666
chump666's picture

That surfer try to kill himself? Hilarious, just jumped right into the rolling lip.  Then the rocks.  That guy is f*cking dead.

Mon, 11/14/2011 - 03:26 | 1874909 jomama
jomama's picture

epic wipe out, dude, watch that reef!

Mon, 11/14/2011 - 03:42 | 1874920 Colonel
Colonel's picture

Nice animated gif Tyler. All that's needed to go with it is the Beach Boys
Wipe Out song.

Mon, 11/14/2011 - 06:28 | 1875007 Carlyle Groupie
Carlyle Groupie's picture

This time, "it will be different.".

I believe! Praise be. The lord will provide.

Mon, 11/14/2011 - 07:38 | 1875065 Taint Boil
Taint Boil's picture

Deer in the headlights = you see it coming.

Wipeout = you never saw it coming.

Mon, 11/14/2011 - 08:43 | 1875137 tmftdoyle
tmftdoyle's picture

Mr. Tilson suggests that Netflix Enterprise Value/Subscriber of $199 makes it cheap relative to other media company's valuations without discussing the impact of monthly churn or monthly free cash flow per subscriber. Netflix, with monthly churn pushing 5 percent, and negative cash flow per subscriber (when one accounts for the payable build related to streaming rights), is laughably overpriced at $200 per subscrber. Drop a zero Whitney and you get toward an appropriate per subscriber value.

Mon, 11/14/2011 - 09:04 | 1875181 privatehedge
privatehedge's picture

Perfect Tyler - in the pocket , all it needed was a commitment to make it - classic metaphor for these market. indecision = injury / harm .

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