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Andrew Shapiro

 
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  • The Capital Hill article and idea is really interesting but banks will hate it because they make higher than risk free rate on that portion of the home value which is 'risk-free' and they wouldn't want the government to compete or remove this from their margin. But great way to get government and tax payers out of guaranteeing whole home loan value.
    Feb 7, 2011. 02:03 PM | 1 Like Like |Link to Comment
  • Reading International -- RDI -- Sell signals [View instapost]
    Reading is not a stock to be reading or trading off of price charts. I think you may be better off doing fundamental research and reading the 10-Q's and 10-K's very closely on this one.
    Feb 5, 2011. 12:59 AM | Likes Like |Link to Comment
  • Imax: Big Movie Experience, Bigger Profit Potential [View article]
    Viking - been following your writings and was previously impressed. But now concerned with what is known as style drift.

    You begin above on premise current market price is not reflective of true screen count and revenue growth: "will allow IMAX to grow its screen count, and thus its revenue base, faster than expected." and then you estimate those higher numbers.

    Fair enough - But then, based on those numbers you determine current price 18x multiple on those already future 2012 earnings is is a "modest". Isn't there alot of gas in each of the inputs you are using to fit and be so compelling in what you have said in profile of your "Greenblatt, Klarmann, or Graham/Buffett type stocks, and short Jim Chanos" mold?

    I am a tad disappointed. Come back to the fold and your stated roots before its too late.
    Feb 4, 2011. 09:28 AM | Likes Like |Link to Comment
  • International Growth Is Key for Imax in 2011 [View article]
    Sony? That name, along with Disney, was likely some rumor tossed out on the last day of the year to help some investors get a bumped marked price. A studio is not going to buy nor, in some instances due to several supreme court decisions, namely Paramount and United Artists, is not allowed to buy movie exhibitor. Disney fairly immediately categorically denied the rumor. It was a Japanese holiday for Sony to deny it and IMAX execs pretty much came out and denied the rumor. At these valuations, IMAX doesn't add value to most any buyer. Investors are going to have to rely on expectations of continued growth built into the stock being maintained or expanded.
    Feb 3, 2011. 09:21 AM | Likes Like |Link to Comment
  • Netflix Q4 Sends Shares Higher but Shorts May Still Have the Last Laugh [View article]
    price to sale valuations similar to dot-coms didn't work for the dot-coms but even if it did, Netflix has serious "cap ex" that those dot-coms didn't - content costs to attract and retain the subscribers necessary to create and sustain those sales.
    Feb 3, 2011. 12:30 AM | 1 Like Like |Link to Comment
  • Netflix: Don't Short Reed Hastings, But Content Is Still King [View article]
    Conference call' questions pre-screened, filtered and answers pre-scripted and no chance of real time follow-up is NOT Transparency nor Accessibility.

    I submitted questions for the Q4 "conference call" and they were not presented nor answered. This despite some 'questioners' having a 2nd round of questions 'presented' at the back end of the conf call.

    While the sizable decline in marketing spend was explained in this charade of a "conf call", that didn't address where/why sizable subscriber growth came from in the face of lower marketing spend. Is such subscriber growth sustainable with continued lower marketing expense and to what level must marketing expense return to sustain current level of subscriber growth?

    Bottom line - Netflix should have a conf call with live interaction and oppty for follow up like most other public companies following best practices. Even at 'dog and pony' show, investor can ask unscripted questions and can point out or follow up when answer given aren't really answers.
    Feb 3, 2011. 12:26 AM | Likes Like |Link to Comment
  • Netflix: Don't Short Reed Hastings, But Content Is Still King [View article]
    An additional point is that critical mass may drop the per subscriber cost of content acquisition for Netflix, but, given netflix' limited streaming offerings at present, the incremental absolute cost to netflix of content acquisition is still huge and higher than what they are even paying out and accruing for now.

    This is why Netflix mgmt has said they HAVE TO choose between new subscriber acquisition/marketing spend and content spend. They can't and won't do both and still be able to keep margins under control. Mgmt said they can and will control margin but can NOT control or predict subscriber growth.

    My belief is that current market price dynamics are not based on cash flow projections focused on margin projections but almost entirely on subscriber growth estimates. - the exact item even mgmt says that they cannot control or predict.
    Feb 3, 2011. 12:20 AM | Likes Like |Link to Comment
  • Sparton: An Undiscovered Turnaround [View article]
    The P-8 Poseidon plane discussed below will be an enhanced replacement for the current P-3 Orion that deploys Sparton’s sonobuoys.

    “The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013. Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.”

    Presumably the Indians and Aussies will need Sparton sonobuoys too.

    for a nice picture of this new plane see:
    defense-update.com/wp/...

    ----------------------...

    The Seattle Times
    Business / Technology

    Originally published January 24, 2011 at 5:54 PM | Page modified January 24, 2011 at 8:41 PM
    seattletimes.nwsource....

    Navy inks $1.6B contract for initial P-8 Poseidon production planes
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    By Dominic Gates
    Seattle Times aerospace reporter
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    When Boeing won the Poseidon contract in 2004, the initial $3.9 billion development phase of the program required it to develop and build five flight test airplanes and two ground test airplanes. A sixth flight test plane was later added to the contract.

    The P-8 first flew in 2009 and so far three flight test planes have been transferred for tests at Naval Air Station Patuxent River, Md.

    The fourth test airplane is having its military systems installed at a new P-8 line inside the old Thompson site building across Marginal Way from Boeing Field. The fifth test airplane arrived at Boeing Field from Renton on Saturday and will this week transfer to the Thompson site. The sixth flight test airplane is under assembly in Renton.

    The first ground test airplane completed the static tests required for certification this month. In September, that plane will be refurbished and converted for use in live-fire target practice at Naval Air Warfare Center, China Lake, Calif.

    Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.

    The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013.

    The U.S. Navy contract is worth $15 billion if Congress eventually authorizes funds for all 117 production airplanes. Boeing estimates that spare parts and maintenance plus foreign contracts could pump up the total value of the P-8 program to as much as $40 billion over two decades.

    More than 1,000 Boeing employees work on the Poseidon program in Seattle and Renton.

    Dominic Gates: 206-464-2963 or dgates@seattletimes.com
    Feb 1, 2011. 11:32 AM | Likes Like |Link to Comment
  • Sparton: Turnaround Team Returns Micro-Cap Manufacturer to Profitability [View article]
    The P-8 Poseidon plane discussed below will be an enhanced replacement for the current P-3 Orion that deploys Sparton’s sonobuoys.

    “The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013. Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.”

    Presumably the Indians and Aussies will need Sparton sonobuoys too.
    ----------------------...

    The Seattle Times
    Business / Technology

    Originally published January 24, 2011 at 5:54 PM | Page modified January 24, 2011 at 8:41 PM
    seattletimes.nwsource....

    Navy inks $1.6B contract for initial P-8 Poseidon production planes
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    By Dominic Gates
    Seattle Times aerospace reporter
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    When Boeing won the Poseidon contract in 2004, the initial $3.9 billion development phase of the program required it to develop and build five flight test airplanes and two ground test airplanes. A sixth flight test plane was later added to the contract.

    The P-8 first flew in 2009 and so far three flight test planes have been transferred for tests at Naval Air Station Patuxent River, Md.

    The fourth test airplane is having its military systems installed at a new P-8 line inside the old Thompson site building across Marginal Way from Boeing Field. The fifth test airplane arrived at Boeing Field from Renton on Saturday and will this week transfer to the Thompson site. The sixth flight test airplane is under assembly in Renton.

    The first ground test airplane completed the static tests required for certification this month. In September, that plane will be refurbished and converted for use in live-fire target practice at Naval Air Warfare Center, China Lake, Calif.

    Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.

    The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013.

    The U.S. Navy contract is worth $15 billion if Congress eventually authorizes funds for all 117 production airplanes. Boeing estimates that spare parts and maintenance plus foreign contracts could pump up the total value of the P-8 program to as much as $40 billion over two decades.

    More than 1,000 Boeing employees work on the Poseidon program in Seattle and Renton.

    Dominic Gates: 206-464-2963 or dgates@seattletimes.com
    Feb 1, 2011. 11:03 AM | Likes Like |Link to Comment
  • Sparton: Ready to Cash In on the Naval Arms Race [View article]
    The P-8 Poseidon plane discussed below will be an enhanced replacement for the current P-3 Orion that deploys Sparton’s sonobuoys.

    “The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013. Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.”

    ----------------------...

    The Seattle Times
    Business / Technology

    Originally published January 24, 2011 at 5:54 PM | Page modified January 24, 2011 at 8:41 PM
    seattletimes.nwsource....

    Navy inks $1.6B contract for initial P-8 Poseidon production planes
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    By Dominic Gates
    Seattle Times aerospace reporter
    The U.S. Navy on Friday formally approved a $1.6 billion follow-on contract to Boeing to produce the initial production versions of its P-8 Poseidon anti-submarine airplane, a militarized version of the Renton-built 737 airliner.

    When Boeing won the Poseidon contract in 2004, the initial $3.9 billion development phase of the program required it to develop and build five flight test airplanes and two ground test airplanes. A sixth flight test plane was later added to the contract.

    The P-8 first flew in 2009 and so far three flight test planes have been transferred for tests at Naval Air Station Patuxent River, Md.

    The fourth test airplane is having its military systems installed at a new P-8 line inside the old Thompson site building across Marginal Way from Boeing Field. The fifth test airplane arrived at Boeing Field from Renton on Saturday and will this week transfer to the Thompson site. The sixth flight test airplane is under assembly in Renton.

    The first ground test airplane completed the static tests required for certification this month. In September, that plane will be refurbished and converted for use in live-fire target practice at Naval Air Warfare Center, China Lake, Calif.

    Boeing is also assembling the first P-8 for the Indian Navy, which ordered eight of the jets. The Australian Navy is working closely with the U.S. Navy on the program and is also expected to order the P-8.

    The contract announced Friday is for the first six production aircraft out of a total of 117 that the U.S. Navy said they'll need through about 2025. The first P-8 planes are due to be deployed in 2013.

    The U.S. Navy contract is worth $15 billion if Congress eventually authorizes funds for all 117 production airplanes. Boeing estimates that spare parts and maintenance plus foreign contracts could pump up the total value of the P-8 program to as much as $40 billion over two decades.

    More than 1,000 Boeing employees work on the Poseidon program in Seattle and Renton.

    Dominic Gates: 206-464-2963 or dgates@seattletimes.com
    Feb 1, 2011. 11:00 AM | Likes Like |Link to Comment
  • Netflix: Dismal Owner Earnings, Priced to Plunge [View article]
    Rob- Netflix' critical mass may drop the per subscriber cost of content acquisition for them, but, given netflix' limited streaming offerings at present, the incremental absolute cost to netflix of content acquisition is still huge and higher than what they are even paying out and accruing for now.

    This is why Netflix mgmt has said they HAVE TO choose between new subscriber acquisition/marketing spend and content spend. They can't and won't do both and still be able to keep margins under control. Mgmt said they can and will control margin but can NOT control or predict subscriber growth.

    My belief is that current market price dynamics are not based on cash flow projections focused on margin projections but almost entirely on subscriber growth estimates. - the exact item even mgmt says that they cannot control or predict.
    Jan 31, 2011. 11:26 PM | 3 Likes Like |Link to Comment
  • Short Netflix? Questions Remain Regarding Cash Flow and Sustainability of Results [View article]
    great article -

    An additional point is that critical mass may drop the per subscriber cost of content acquisition for Netflix, but, given netflix' limited streaming offerings at present, the incremental absolute cost to netflix of content acquisition is still huge and higher than what they are even paying out and accruing for now.

    This is why Netflix mgmt has said they HAVE TO choose between new subscriber acquisition/marketing spend and content spend. They can't and won't do both and still be able to keep margins under control. Mgmt said they can and will control margin but can NOT control or predict subscriber growth.

    My belief is that current market price dynamics are not based on cash flow projections focused on margin projections but almost entirely on subscriber growth estimates. - the exact item even mgmt says that they cannot control or predict.
    Jan 31, 2011. 11:12 PM | 4 Likes Like |Link to Comment
  • The Short Case for Netflix: Disconnect Between Business and Valuation [View article]
    Guraaf- There are certainly some assets that someone would want to acquire rather than build from scratch but there is a limit on price for those certain assets that someone could/should pay. I think the price that would be accretive to even the most wildly over-valued acquirer was exceeded a long time ago.

    Critical mass may drop the per subscriber cost of content acquisition down for Netflix but given netflix limited streaming offerings at present the incremental absolute cost to netflix of content acquisition is still huge and higher than what they are paying now. This is why mgmt has said they have to choose between new subscriber acquisition spend and content spend. They can't and won't do both and be able to keep margins under control. Mgmt said they can and will control margin but can NOT control or predict subscriber growth.

    My belief is that current market price dynamics are not based on cash flow projections focused on margin projections but almost entirely on subscriber growth estimates. - the exact item even mgmt says that they cannot control or predict.
    Jan 31, 2011. 11:02 AM | 1 Like Like |Link to Comment
  • Five Reasons to Short Netflix This Earnings Call [View article]
    I don't question your view of the product but for the assertion that "access just about any movie you want, anywhere and anytime". Netflix does not presently offer via streaming that kind of content and to do so will cost the company hundreds of millions of dollars which will have an impact on bottom line cash flow generation.

    Furthermore, netflix movies for most are not as addicting as starbuck's coffee and thus there is price elasticity for most.

    Yes the company will do what is necessary to do to sustain itself and grow. IMO, they are likely to raise money via a stock issuance in a direct secondary or acquisition of content or assets using their incredible current market valuation. I would if I were on this company's board.

    However, what the company does to 'succeed' has little to do with the market price of their securities in the market. NFLX stock could be $80/share $140/share or stay at its current price/share and achieve all that you described. My view is simply from these price levels, there is a greater chance of a decline, than a further rise.
    Jan 31, 2011. 09:44 AM | 1 Like Like |Link to Comment
  • Five Reasons to Short Netflix This Earnings Call [View article]
    510432-

    You wrote "easily allow NFLX to add a minimum of 5-6M subs a year for the next 5 years (DVD/streaming)" citing several reasons for "millions" of new subscribers and households to exist.

    My figures supporting a more limited US market size than you obviously assume come from US Household numbers from the US Census and high speed broadband internet connectivity figures from US Dept of Commerce.

    1) I don't believe there will be anything close to what you figure in NEW households even being created from those under 18 reaching this age over the next 5 years.

    2) For the US economy, our budget and social security and medicare deficits, I only wish this country could create half as many jobs as you are assuming will be needed to allow this age group to even become new households.

    its not about total US population - My market size saturation point was more to the core of amount of households that exist and those having internet connectivity sufficient to allow video streaming.

    Take current enterprise value rounded down to $11 billion. Being further generous, take estimated more than doubling of subscribers to 50 million in five years. That is $220 of EV per estimated "5-years-down-the-road subscriber". Dividing in the company's own operating margin of 12% (assuming content purchase cost match depreciation) would imply $1833 of imputed revenue per estimated "5-years down the road subscriber". Divide by generous $11/month avg subscription and you get 166.66 months or ALMOST 14 YEARS of revenue stream required from the estimated 5-years down the road subscriber base. That is a lot of years for those retirees.

    Note also this analysis was not on current subscriber base but AFTER the next five year's rapid estimated S curve growth gets Netflix possibly to the street expected 50MM subscribers. If you lower the subscriber base or monthly avg subscription price or op margin and the number of years required for the 'annuity' stream to not be disrupted goes up from 14 years substantially.
    Jan 30, 2011. 07:32 PM | Likes Like |Link to Comment
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