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Chad Brand

 
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  • Believers In Sears Holdings Transformation Are Ignoring Eddie Lampert's 9-Year Failure [View article]
    Exactly. It's baffling that commenters think that Lampert making money for himself while his shareholders lose money is somehow proof that he has been creating shareholder value all of this time. Normally shareholder value creation is judged by the profits made by the shareholders.
    Nov 26, 2013. 11:28 AM | Likes Like |Link to Comment
  • Believers In Sears Holdings Transformation Are Ignoring Eddie Lampert's 9-Year Failure [View article]
    Good luck finding a 9-year period where Berkshire Hathaway was 1) controlled by Warren Buffett, AND 2) lagged the S&P 500 index by 90 percentage points inclusive of dividends. I'm pretty sure that never happened.
    Nov 26, 2013. 11:23 AM | 5 Likes Like |Link to Comment
  • Believers In Sears Holdings Transformation Are Ignoring Eddie Lampert's 9-Year Failure [View article]
    Pension liability is $2.4B today and also was $2.4B in January 2006 (last annual report available on the SHLD web site), so not much change there.
    Nov 26, 2013. 10:12 AM | 1 Like Like |Link to Comment
  • Believers In Sears Holdings Transformation Are Ignoring Eddie Lampert's 9-Year Failure [View article]
    He's "liquidating real estate at nice profits"? How do you figure? Maybe if you consider Kmart only and ignore Sears, but that's not a fair comparison. He paid $11B for Sears... no way he is going to break even on that deal.
    Nov 26, 2013. 10:05 AM | Likes Like |Link to Comment
  • Believers In Sears Holdings Transformation Are Ignoring Eddie Lampert's 9-Year Failure [View article]
    The article was not supposed to look at Lampert's Kmart debt purchases. One cannot argue that those buys were very profitable. Nobody else was interested in owning Kmart, even after it emerged from bankruptcy, so he saw the value and got a steal for pennies on the dollar. In fact, I even mention his great success running his hedge fund. There is no doubt he is a great investment manager. Instead, I am focused on his tenure at Sears Holdings, which was by far his biggest strategic move. His track record as a CEO, chairman, and retailer is abysmal.
    Nov 26, 2013. 09:37 AM | 1 Like Like |Link to Comment
  • Esperion Therapeutics: Another IPO After Pfizer Abandons The Only Drug In Its Pipeline [View article]
    Update 11/22/13:
    So ESPR is down 35% ($17 to $11) since I wrote this article five months ago. Now that the froth has been let out of the ESPR balloon, I would not bet against it any longer at this price. However, since cholesterol drug development is a crowded field these days, I am not bullish either, despite the drop. I still think it is an uphill battle, but I am declaring victory on this call and moving on to other things. Best of luck everyone!
    Nov 22, 2013. 03:00 PM | Likes Like |Link to Comment
  • Aegerion: Addressable Market At Odds By 1,000% [View article]
    At the end of the second quarter (U.S. approval only) they already had more than 200 patients taking the drug (after just 6 months on the market), and you are claiming there are only 300 potential patients in the U.S.? That's funny.
    Nov 13, 2013. 10:54 AM | 1 Like Like |Link to Comment
  • Altisource Asset Management (AAMC) Is A Great Short [View article]
    @JayRay73:

    How do you think RESI will handle the quarterly dividends given that they must distribute 90% of taxable income, but taxable income will be based in part on the incentive fee paid to AAMC? I ask because AAMC's incentive fee is going to be 50% of the dividend payout fairly soon (once RESI's annual dividend reaches $1.04 per share). If the dividend is determined by taxable income and the incentive fee is determined by the dividend, but the incentive fee impacts taxable income, the formula chosen seems odd to me. Do you think RESI will true-up the dividends in Q4 or something, in order to take into consideration how the incentive fees have impacted taxable income throughout the year? Or am I making this more complex than it really is?
    Oct 31, 2013. 03:14 PM | Likes Like |Link to Comment
  • Angie's List - A Deferred Revenue Train Wreck [View article]
    Marketing expense as a % of revenue declined from 62% to 43% in Q3 versus a year ago. That trend can continue over time, albeit not at the same pace.
    Oct 24, 2013. 06:48 PM | Likes Like |Link to Comment
  • Angie's List - A Deferred Revenue Train Wreck [View article]
    Even if you back out the $16M benefit of accrued payables for the first 9 months of the year, operating cash flow would go from +$13M to ($3M). Payables shifting back in the future will not drive them into BK.

    I'm not sure why you keep badmouthing increases in deferred revenue, as it is driven by membership growth. Collecting cash upfront for new memberships is not a one-time event that is going to reverse in the future. Would you prefer they not collect cash as soon as they can? Also, the accrued compensation liability was also beneficial to cash flow because they changed their commission structure and now pay their sales people only once they get paid from the service provider, not upfront like they did previously. Isn't that a good thing for shareholders?
    Oct 24, 2013. 06:31 PM | Likes Like |Link to Comment
  • Angie's List - A Deferred Revenue Train Wreck [View article]
    You say adjusted EBITDA is the "true" cash flow even though it is simply an accounting metric and does not represent cash flow at all. Warren Buffett hates EBITDA for that very reason. I am not arguing about the internals of the financial statements, but you can't objectively look at them and think the company is likely to go bankrupt either.

    And if they decide to lower membership fees they will see an acceleration in users, which means more service and advertising revenue. That is where they make most of their money, not from membership fees.

    I don't own the stock today but if it gets to $12-$13 I think it will be quite cheap and would consider buying. Investors are obsessed with negative earnings due to massive marketing spend, but that lever can be adjusted at will by the company and the financials would get better overnight. After all, 2013 marketing expense is going to be $90 million, versus total revenue of ~$245 million.

    The underlying profitability of the core business is enormous. It reminds me of Spark Networks (LOV). They are marketing Christian Mingle like crazy, and showing quarterly losses in the process, but the company is extremely profitable if you look more closely.
    Oct 24, 2013. 03:19 PM | Likes Like |Link to Comment
  • Angie's List - A Deferred Revenue Train Wreck [View article]
    J: How do you see ANGI going bankrupt? They have over $60M in the bank. You cite a quarterly loss of $13M in Q3, but that is an accounting loss, not a financial one (and therefore is completely irrelevant to their liquidity). Their actual operating cash flow in Q3 was a $1M loss. At that run-rate they could stay in business for 15 years!
    Oct 24, 2013. 02:26 PM | Likes Like |Link to Comment
  • Esperion Therapeutics: Another IPO After Pfizer Abandons The Only Drug In Its Pipeline [View article]
    It's down $3 already, so less attractive as a short now that nearly 20% has been lost since the stock opened. I find the optimism interesting given that Pfizer had no interest. Couple that with the fact that this company only has a single drug in the clinic and they needed to raise "dumb money" in an IPO just to get enough cash to finish the trials (why were no larger drug companies interested in partnering with them? Maybe Pfizer had the right idea? If ESPR has made strides since being spun out of PFE, why did PFE not invest more 5 years later?) and you have a very risky stock.
    Jun 28, 2013. 09:49 AM | Likes Like |Link to Comment
  • Going Negative On Pinnacle Entertainment 3 Years After My Bullish Call [View article]
    Well put, Tim. The capital allocation has been awful. It's a shame, as the properties are quite nice and very profitable. If they just stopped building and paid down debt/repurchased shares the stock could be a multi-bagger. Management never has seemed to get that (or care).

    As for my position, SA only has disclosure boxes for the stock (not options/bonds/etc) so an author has to add those disclosures as a supplement, which only shows up at the bottom. Not trying to be confusing... it is just how SA has set up their publishing tool.
    May 31, 2013. 09:29 AM | Likes Like |Link to Comment
  • J.C. Penney Liquidation Value Far Lower Than Bulls Thought [View article]
    From today's earnings release: Q1 2013 free cash flow was NEGATIVE $948 million. Ouch. It won't be that bad going forward, but the company will only have about $2.3 billion of cash ($821M current cash + $1.75B term loan - $250M debt repayment) after their last new loan closes in a week or so.
    May 16, 2013. 05:41 PM | Likes Like |Link to Comment
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