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Cabeza Howe

 
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  • Be Careful With Recent IPO On Deck Capital [View article]
    There's money to be made from ONDK as well. You just need to wait until the bottom is in. ONDK has recently embarked on the match-making model (just like LC) as well. On lending side, its risk is compensated by its super-high yield. It's just hard to value the stock. And you want to bail out before the next recession. But you might want to bail out of other stocks as well, before a major recession hits.
    Jan 23, 2015. 04:34 PM | Likes Like |Link to Comment
  • Lending Club: The Marriage Of Technology And Financing Offers The Opportunity For A Significant Return [View article]
    Glassdoor.com reviews are from employees. It's great to know that LC is liked by employees. But is it liked by customers? The following customer reviews should complement the employee reviews.

    http://goo.gl/33rC0v
    Jan 23, 2015. 11:07 AM | 1 Like Like |Link to Comment
  • An Open Letter To Mr. Bill Stiritz On Herbalife [View article]
    Mr. Stewart,

    Anybody with common sense and without bias must agree that Herbalife is a scam. You have got at its "brilliance:" a magnificent wealth-transfer mechanism that enriches a few at the expense of the masses. Congratulations on your excellent marketing skill that parallels Herbalife's.
    Jan 9, 2015. 11:24 AM | 7 Likes Like |Link to Comment
  • What to watch in the restaurant sector [View news story]
    LUB sounded a great tip. Thanks, Mark. But briefly how did LUB get into such mess in the first place?
    Jan 3, 2015. 01:59 PM | Likes Like |Link to Comment
  • LendingClub: Overvalued And Not Disruptive [View article]
    Thanks, Bryce (p2p-picks?:). That's exactly what I was looking for.
    Dec 28, 2014. 11:54 PM | Likes Like |Link to Comment
  • LendingClub: Overvalued And Not Disruptive [View article]
    Would you supply a link that says this is indeed how Blue Sky Exemption works? I have read about it somewhere to the effect of what you said. But it didn't provide supporting source; so it remained that author's understanding. I did a casual Google and didn't find convincing source that spelled it out that way. Thanks.
    Dec 28, 2014. 02:39 AM | 1 Like Like |Link to Comment
  • Rosetta Stone: Misleading Financials Mask Continued Deterioration In Business [View article]
    It's not a big issue in the sense that it's not as serious as fudging the books or GAAP reporting, like some were led to believe. It also won't have any impact on investors who really have done their homeworks, because they would have looked at both GAAP and non-GAAP measures.

    That said, someone should really request the management to issue a release clarifying their old and new adjusted EBITDA they are using.

    And now relax, I would sum it up nicely once more: "I have not even looked into this company myself." LOL.
    Dec 26, 2014. 05:17 PM | Likes Like |Link to Comment
  • Rosetta Stone: Misleading Financials Mask Continued Deterioration In Business [View article]
    According to you, "Management clearly stated that they were using the new way to recapture lost revenue and earnings from the write-down of deferred revenue for the two acquisitions."

    That's the valid reason I was talking about.

    Adding back deferred revenue beyond the purchase-accounting distortion on the acquisitions would have gone too far. Investors should look at GAAP metrics also. That was all I have meant. Read carefully on my qualifiers like "possibly." And I clearly said I have not even looked into this company myself.
    Dec 26, 2014. 01:56 PM | Likes Like |Link to Comment
  • Rosetta Stone: Misleading Financials Mask Continued Deterioration In Business [View article]
    Purchase accounting appears to be an area of universal confusion. In banking industry, you don't carry over allowance for loan losses (ALLL) but mark loans to fair value. Thus the acquirer might suddenly appear to have a low ALLL/loan ratio. Here we have deferred revenue at issue. So, there indeed exists a valid reason for reminding investors of such purchase-accounting induced distortion.

    On the other hand, the author has a point in arguing that the revenue-based adjusted EBITDA might have taken care of the distortion. But maybe RST management felt the old approach had not accurately/adequately accounted for it.

    Given it was the non-GAAP adjusted EBITDA that's manipulated, possibly with valid reasons, and GAAP measures were reported as well, it might not be such a big issue after all. You can argue that the booking-based approach is not the best or even less accurate than the revenue based. But that's about it. This factor alone does not make the stock a short. Market is smart enough to take GAAP measures into account as well.

    Declining business trend could be a better argument.

    Just my two cents. Have not looked into this company myself at all.
    Dec 26, 2014. 11:19 AM | 1 Like Like |Link to Comment
  • Caesars Is Headed Straight For Chapter 22 Bankruptcy [View article]
    I would stay away from the mess on either side and buy some LVS, WYNN, and MGM instead. ETF BJK does not seem to even include this prominent gaming company at all. Only the Coopermans should play here.
    Dec 24, 2014. 06:30 PM | Likes Like |Link to Comment
  • Caesars Is Headed Straight For Chapter 22 Bankruptcy [View article]
    Any share dilution should shift the argument slightly to the short side. So I'm not arguing that a post-restructured CZR is a great value, just that it might not be a slam-dunk short either.
    Dec 24, 2014. 05:21 PM | Likes Like |Link to Comment
  • Caesars Is Headed Straight For Chapter 22 Bankruptcy [View article]
    But existing sharesholders supposedly get interest in propco, right?

    Also, annual lease's supposed to be $635 million so the pro forma net income from continuing operations would now be $75 million (annualized but without factoring into lower income tax which would push the number a bit higher), much lower than $710 million above but still positive.
    Dec 24, 2014. 04:53 PM | Likes Like |Link to Comment
  • Caesars Is Headed Straight For Chapter 22 Bankruptcy [View article]
    Hi Verge Of Bankruptcy,

    Were the restructuring agreement to go through as proposed, I do not see the situation as dire as you described here.

    First of all, when you exclude all special items (D&A, write down, impairment, loss on sale of subs and early extinguishment of debt) you have an adjusted loss from continuing operation for 1-3Q14 of ($405) million, which is close to cash outflow from operations of ($422) million.

    Then if we just take a simple-minded approach to the key part of the restructuring agreement, there's an annual saving of interest expense of $(1,700-450) = $1,250 million. On three quarter basis (1-3Q14) this translates into a $938 million saving and would bring the 1-3Q14 net income from continuing operations into positive territory of $533 million, or $710 million annualized.

    A successful restructuring thus appears to be a game changer rather than rearrangement of chairs on the deck of Titanic. (That is, if my understanding is correct.)

    Then improving management (supposedly) post-restructuring combined with improving industry trend might actually boost financial performance further in the future.

    That, coupled with Mr. Cooperman's recent increase in stake, does not rub well with the proposition this stock would be a fantastic short at this point.

    Correct me if I'm wrong. I was thinking about shorting this stock a week or so ago and when I gathered all the facts I changed my mind because a short position does not seem to have a favorable risk/reward ratio.

    A short would work only if the restructuring/prepackaged BK were to be tossed by court or creditors.
    Dec 24, 2014. 04:26 PM | 1 Like Like |Link to Comment
  • LendingClub: Overvalued And Not Disruptive [View article]
    So, as much as I think P/S~45 (on annualized 1-3Q14 revenue) right now still looks rich, big bank competitions appear more a future risk to me. On valuation, I have been able to extrapolate (aggressively but with minor moderation) present growth trajectory into the next five years and come up with a P/E (EPS 5 years ahead, discounted at 10% rate to present) of about 16. That, coupled with P/B (pro forma) of less than 9, could have lots of people chasing hyper-growth arguing as a fair or even attractive valuation as of today.

    But, it would only take a news announcement about JPM, BAC, WFC, ... entering P2P arena to send the stock tanking day after day. Valuation would contract abruptly in that scenario. I have to say I like LC. But that risk alone would have me impose a strict sizing limit when it comes time for me to acquire shares.
    Dec 23, 2014. 06:02 PM | Likes Like |Link to Comment
  • LendingClub: Overvalued And Not Disruptive [View article]
    http://goo.gl/cwM6EY

    Jonathan Morris is President of BMC Bancshares, the bank holding company that owns Titan Bank.

    On the "90%" better than traditional banks, I think his original wording went more like this: I'm amazed at the (underwriting/banking) principles they have, the people they have, and the verification systems they have in place. I think they're running their program better than 90% of the banks.

    Still not his original words. For that, listen to the podcast yourself.
    Dec 23, 2014. 05:18 PM | 1 Like Like |Link to Comment
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