Deja Vu All Over Again: An Unsolicited Whitney Tilson Explains Why He Is Short Green Mountain, Long NetflixSubmitted by Tyler Durden on 11/13/2011 22:27 -0500
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...
Pardon our ignorance, but shouldn't a value-focused hedge fund that has been in operation for 7 years, and has nearly daily TV and media exposure, outperform the S&P net of fees? Actually, scratch that, shouldn't any hedge fund still in existence after 7 years, outperform the S&P?
Whitney Tilson Explains Why He Went Long Netflix, Says He "Hasn't Lost His Mind", Cites Business Insider To "Defend" ThesisSubmitted by Tyler Durden on 10/26/2011 10:59 -0500
And now the "letter" we have all been waiting for...
It appears yesterday's FSLR CEO "departure" was no fluke. The company just came out with earnings which in addition to being a current quarter disaster with EPS coming in at $2.25, on expectations of $2.67, also added disastrous guidance to the mix. To wit: First Solar now sees year EPS $6.50-$7.50, compared to $9-$9.50 previously, and is now forecasting net sales of $3 billion - $3.3 billion, compared to $3.6 billion -$3.7 billion previously. And combining the worst of both the Netflix and Amazon press releases, the company has also announced it is cutting its CapEx, and is further exploring options to reallocate overhead expenses. We hope Whitney Tilson wasn't buying this one on the way down too as the company may be headed for $0.00 soon to quite soon. Of course, if his plan, like in NFLX, is to keep adding more on the way down and averaging lower, he will be more than content.
And just as we were thinking of buying some deep OTM calls...
Now that Netflix has lost its lustre, its coolness factor, and frankly, its cash flow (which it never had to begin with), here comes the Monday Morning Quarterbacking with some damage control from the CEO which is too little, too late. That said, if Whitney Tilson is re-shorting the company here, everyone should pile in ASAP.
The myths of this market continue breaking one after another. After two substantial and long overdue trading blow ups in the past 24 hours, we next turn to that other momo miracle: Netflix, which at last check had plunged 12% to about $180 following an update from the company, in which it said it subscriber growth will come in below plan. Of course, the only ones surprised by this move, are those who are actually long NFLX (and those who bought into Goldman's topticking upgrade which brought the stock to over $300 however briefly). We expect "value investor" of very high conviction, Whitney Tilson, who lately has been known best for shorting low and covering higher, to soon resume his bearish position in the name. And yes, we still expect that the company will very soon come to market with a dilutive equity offering to raise cash and stench the relentless real cash burn.
For the second month in a row, Dan Loeb's $7.9 billion Third Point retains gold as its top position. And if that was his only holding he would have done quite well. Unfortunately, he also has quite a few equities, and courtesy of his net 17.7% exposure to equities (and 18.5% to credit) his funds dropped anywhere between 2.7% and 4.5%. Even so, Loeb's flagship fund is up 3.9% YTD, a performance 13F-chasing Whitney Tilson (not to mention mutual fund Paulson & Co.) can only dream about. Loeb continues to be most bullish on ABS credit, while accentuating his hatred for govvies, which account for his biggest short net exposure or -10.3%, an increase from last month's -8.9%. Top equities (except for confidential and FX positions - oddly a new footnote disclaimer, was not there last month - does it mean Loeb has engaged in a major "confidential" position or is he now a major FX trader?) for 3rd Point are Delphi, CIT, Technicolor (a new addition) and El Paso.
So Much For "Value Investing" - Whitney Tilson Plunges 13.3% In August, Down A Mass Redemption-Inducing 21.1% YTDSubmitted by Tyler Durden on 09/01/2011 15:09 -0500
If anyone works in finance, chances are they have at some point, or more likely, constantly, received emails (we want to keep it civil) to participate in the Value Investing Congress, which purportedly, promotes ideas based on, well, value. Alas, if that is indeed the case, then primary sponsor Whitney Tilson's T2, has to urgently look up the definition of velue. To wit: "Our fund declined 13.3% in August vs. -5.4% for the S&P 500, -4.0% for the Dow and -6.4% for the Nasdaq. Year to date, it’s down 21.9% vs. -1.8% for the S&P 500, +2.1% for the Dow and - 2.2% for the Nasdaq." Even more to wit: "On the long side, our portfolio got clobbered across the board despite generally good company- specific news regarding our major holdings (discussed below). Amidst a tumultuous month in the markets, investors dumped stocks that were even slightly illiquid, or that are valued primarily on future, rather than current, profits – both traits that characterize many positions in our fund. One of our biggest advantages is being willing and able to look out 2-3 years when most investors are looking out 2-3 months (or, in many cases, 2-3 microseconds), but this hurt us last month." But wait, despite what is basically the start of yet another hedge death watch, Tilson sees smooth sailing ahead. "In our view, the turmoil of the past month has created the best bargains we’ve seen in the market since the chaos and panic of late 2008 and early 2009. Of course stocks aren’t anywhere as cheap now as they were then, but the risks aren’t nearly as great either (we think many people didn’t realize or have forgotten how close we were then to a worldwide Great Depression), so on a risk-adjusted basis we think our portfolio is as attractive now as it was then." We can only hope Whitney has some, any, money left to spend on chasing these amazing value bargains. In the worst case, the fees from the VIC conference should find the purchase of at least one block of ES.
Our Biggest Surprise From The "Patriotic Millionaires For More Taxes Initiative": Whitney Tilson Makes Over A $1,000,000Submitted by Tyler Durden on 08/15/2011 14:44 -0500
When we read about the "Patriotic Millionaires" initative, in which anyone can submit a name and an email address, and indicate they make over a million dollars, while patriotically proclaiming their desire to be taxed more, our biggest surprise was not that nearly 400 Americans gave the IRS a carte blanche to go through their 2011 tax returns line by line, but that Whitney Tilson actually makes over a million per year. It appears the "Value" Investing Congress still has money left over after spending millions on R&D for uncovering revolutionary ways for its VIC conference invite (80% off, but only if you respond in the next 10 minutes) blast mail to pass through every single spam filter known to man (or so it would appear to disinterested 3rd parties who have tendonitis from hitting unsubscribe countless times). That said, we are confident all of these patriotic individuals will gladly submit at least an additional 10% of their gross income to the IRS, and provide proof of doing so, regardless of how successful their highly patriotic and altruistic campaign ends up being. Because otherwise those tempted to do so, may actually accuse said "millionaires" of hypocritical posturing. Incidentally, perhaps next said self-proclaimed millionaires, who count in their ranks such rich men as Nouriel Roubini, Leo Hindery, Mike Steinhardt, and Edie Falco can also disclose the liability side of their balance sheets.
Lately, Whitney Tilson's "value investing" record has taken some bruises (today's latest MSFT fiasco notwithstanding: bottom line is sometimes stocks are "value" for a reason), although he still makes presentations better than most. Below is his latest comprehensive analysis of the economy "An Overview of Behavioral Finance and the Economy, What Worries Us, Our View of the Market, and Some Stock Ideas." Lots of pretty charts and some good overall observations, with an emphasis on housing and macroeconomics.
Lights Out Netflix? Facebook (And Its 600 Million Users) Enters "Zero Barriers To Entry" Video Streaming MarketSubmitted by Tyler Durden on 03/08/2011 08:51 -0500
Has anyone seen the latest Whitney Tilson NFLX reshort memo? Because if the news that Facebook and its 600 million registered users is entering the video streaming market is true, and it appears to be, the "value inventor" should promptly forget that he topticked the market with his short cover a few weeks back, swallow his pride and actually make money. As for Netflix, the world's most ridiculous zero barriers to entry business model is about to realize why most SWOT analyses typically at least cast a casual glance at said barriers to entry. Because when there are none, you can go from hero to zero in a like amount of time. All Things Digital reports: "The social media giant is taking its first step to connect you with
movies and TV shows, while collecting a fee in the process. It’s going
to let users rent movies directly from the site, using Facebook Credits
to pay for the transaction. First up is “The Dark Knight”, from Time Warner’s Warner Bros.. It will
cost 30 credits, or $3, for a 48-hour rental, via an app the studio has
built for the site. More movies, along with the ability to purchase the
titles outright, are coming." And so, the race to the bottom in Netflix margins begins. Next up: we repeat our prediction that NFLX will be forced to come to market with an equity offering, which will promptly cut the value of the world's most overpriced stock by at least 33%.
it's not just the Federal Reserve that is in denial but the commodity speculators, the equity investors and even the bond investors as the ALL believe they are going to get paid while MATH says that's not even remotely possible.
While it is not surprising that the Swiss Franc is surging almost as much as silver in today's flight to safety episode, and even "value investor" Whitney Tilson is rumored to be shorting Netflix again after topticking his cover with immaculate perfection, what is a little disturbing is that the dollar has plunged to the lowest levels since February 3. The reason, of course, is that with global unrest spreading like Molotov cocktail fire, and implied US GDP plunging by 5% in the past week on the hike in oil prices, it is becoming very evident that the recovery myth is now over, despite claims by the NAR charlatans, and another round of quantitative easing is almost inevitable. What that means for the dollar is precisely what one can see on the chart below. As for the use of funds in the upcoming QE episode, perhaps the Fed can instruct the Primary Dealers to go out and buy some WTI this time instead of just crowding into Apple and REITs...