David Cohen - Seeking Alpha 'David Cohen' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/david-cohen Standing Firm: The Tim Hortons Spinoff Created Value for Wendy's Shareholders http://seekingalpha.com/article/39222-standing-firm-the-tim-hortons-spinoff-created-value-for-wendy-s-shareholders?source=feed 39222 this blog entry, Todd Sullivan defends himself against my previous argument about Wendy's (WEN) spin-off of Tim Hortons (THI). I'd like to just quickly restate my thesis:

The spin-off of Wendy's from THI created value. Why? Because both organizations can now concentrate on maximizing value of their own operations. THI is a great chain that was for a long time masking the ineptitude of Wendy's mgmt team.

]]> Mon, 25 Jun 2007 03:31:05 -0400 David Cohen David Cohen submits: In this blog entry, Todd Sullivan defends himself against my previous argument about Wendy's (WEN) spin-off of Tim Hortons (THI). I'd like to just quickly restate my thesis:

The spin-off of Wendy's from THI created value. Why? Because both organizations can now concentrate on maximizing value of their own operations. THI is a great chain that was for a long time masking the ineptitude of Wendy's mgmt team.


Complete Story »]]> THI WEN David Cohen Expedia: Diller's Buyback Plan Does Create Value http://seekingalpha.com/article/39033-expedia-diller-s-buyback-plan-does-create-value?source=feed 39033

Monday morning, the column (subscription required) stated quite confidently that Expedia's plan to buy back 42% of the company's shares was a waste of shareholder cash on an overvalued asset (Expedia shares being the overvalued asset). The evidence? Expedia is trading at 26x per share earnings, and the debt level would equal ~4.5x debt/EBITDA.

Well, the problem with Breakingviews is that they take about ten minutes to research a company and not two weeks. I happen to have done a lot of research into Expedia, and while I did not own it in the Vestopia portfolio I manage, my hedge fund owned loads of it - we bought it at ~$18 late last year. Here's why Diller's buyback creates value:

]]> Thu, 21 Jun 2007 06:05:30 -0400 David Cohen David Cohen submits: Breakingviews is printed every day on the back page of the C section in the Wall Street Journal. The column sometimes has some interesting things to say, but most of the time it's dedicated to stating an opinion and backing it up with circumstantial evidence.

Monday morning, the column (subscription required) stated quite confidently that Expedia's plan to buy back 42% of the company's shares was a waste of shareholder cash on an overvalued asset (Expedia shares being the overvalued asset). The evidence? Expedia is trading at 26x per share earnings, and the debt level would equal ~4.5x debt/EBITDA.

Well, the problem with Breakingviews is that they take about ten minutes to research a company and not two weeks. I happen to have done a lot of research into Expedia, and while I did not own it in the Vestopia portfolio I manage, my hedge fund owned loads of it - we bought it at ~$18 late last year. Here's why Diller's buyback creates value:


Complete Story »]]> EXPE David Cohen Tim Horton's Spinoff Was Healthy For Wendy's Investors http://seekingalpha.com/article/39024-tim-horton-s-spinoff-was-healthy-for-wendy-s-investors?source=feed 39024 this post that the spin-off of Tim Horton's from Wendy's destroyed value in the core Wendy's franchise. Aside from ignoring and/or mis-stating key facts (Bill Ackman is indeed a long term value investor, and Nelson Peltz, who still holds Wendy's shares, also pushed for the THI spin-off), I think the argument is off-base.

Spin-offs create value by splitting two or more operations that don't necessarily need to be connected to each other. The resulting entities are more focused, have management that is better incentivized, and in many cases are also more apt to get bought out, than the original conglomerate. Now, is there a good reason for Tim Horton's to be locked up in the same mismanaged entity that is Wendy's? Sullivan's argument is that Wendy's could be doing much better if it only sold coffee to its customers, as McDonald's seems to be succeeding in doing. My retort: Can't Wendy's sell coffee without THI just as it could with THI? What in the world does Tim Horton's have to do with Wendy's selling coffee?

]]> Thu, 21 Jun 2007 05:55:30 -0400 David Cohen David Cohen submits: Todd Sullivan of the blog Valueplays makes the argument in this post that the spin-off of Tim Horton's from Wendy's destroyed value in the core Wendy's franchise. Aside from ignoring and/or mis-stating key facts (Bill Ackman is indeed a long term value investor, and Nelson Peltz, who still holds Wendy's shares, also pushed for the THI spin-off), I think the argument is off-base.

Spin-offs create value by splitting two or more operations that don't necessarily need to be connected to each other. The resulting entities are more focused, have management that is better incentivized, and in many cases are also more apt to get bought out, than the original conglomerate. Now, is there a good reason for Tim Horton's to be locked up in the same mismanaged entity that is Wendy's? Sullivan's argument is that Wendy's could be doing much better if it only sold coffee to its customers, as McDonald's seems to be succeeding in doing. My retort: Can't Wendy's sell coffee without THI just as it could with THI? What in the world does Tim Horton's have to do with Wendy's selling coffee?


Complete Story »]]> THI WEN David Cohen