Expect Netflix Shares To Drop After Rally As Margins Fall, Profit Vanishes [View article]
I am putting tomorrow...the long term puts will prove the saying "the market is a voting machine in the short term and a weighing machine in the long term" correct.
I agree that long term NFLX is a bust. But just for today...37 million iPads were sold over the holidays. Netflix scores high on all the lists of apps that "must" be installed on the iPad. I fear a temporary jump in streaming subscribers due to the "Apple Effect".
Clearwire: At Long Last, Positive EBITDA And LightSquared Collapse Confirm Deep Value [View article]
Before you spout off like this, perhaps you should read the *whole* previous article by the same author on valuation of CLWR's spectrum. The use of the limbic system should be reserved for emergencies only.
Quote of the day, courtesy of new RIM (RIMM) CEO Thorsten Heins: "Sometimes we innovate too much," in explaining why RIM has been struggling. Watch Heins' video message to employees. [View news story]
Goes to show this guy is as clueless as Groucho and Marx before him....
Should You Short These 5 Stocks In 2012? [View article]
Given the fact that CLWR is sitting on spectrum that may be valued (by marking to market by recent spectrum purchases by VZ) at anywhere from 20 to 30 billion, I would estimate CLWR to be worth after paying off debt, to be between $10-$20 per share...
Chipotle Mexican Grill: Why I'm Skeptical, And Short [View article]
If you open Google maps and do a search for Chipotle, you'll notice how many states have little or no representation of Chipotle. You'll also notice an interesting pattern, in the cities and towns where there is a location, there tend to be several. This indicates that in a local market multiple locations can survive.
The visual evidence on google maps is quite compelling in that Chipotle has a lot of growth left. Just opening a location next to every college and university can keep them going for a long time. In the local college town there is a facebook page up for at least a couple of years begging Chipotle to open a location. This despite a slew of Moe's Southwest Grills and local burrito joints.
On the other hand, the prices at CMG are quite steep. A burrito plus a drink now sets you back $10.
Many locations, esp the busier ones tend to be quite dirty esp at peak times since the entire staff seems to be busy serving burritos at such times. I've had a number of experiences with Chipotle where I've felt disgusted at the overall cleanliness. I avoid going there during peak times.
Their overall menu hasn't changed (except now they have added brown rice) in the last 10 years. It's getting to be a bit long in the tooth.
The loud music in the locations is very painful. I suspect that the music is kept loud to foster stress and force the patrons to leave asap after eating.
Also, Chipotle's lack of a franchise model means that growth is, of necessity, slow. Their lack of debt essentially means they are not deploying capital effectively.
On the whole, I'm neutral on CMG. I think there are valid concerns about overvaluation, but I also think it is dangerous to short a fundamentally sound company that has so much bullish emotion attached to it.
a)Because Roku makes its money only from the boxes and content and hence is pretty good about updating the software and hardware
b) it's easier to update the hardware in a $50 box (faster chips, better graphics) than update the hardware in a $2000 TV. People will not mind buying a new $50 box.
c) It is easier for content providers to deal with one interface for delivering content than to deliver content to the inbuilt firmware/software of a dozen different TV manufacturers
d) TV manufacturers (and OEMs in general) are not too concerned about updating the software for the legacy hardware they have already sold, preferring to concentrate on the new hardware they want to sell. Samsung is an example, with most of the older handsets still running very old versions of Android.
A) The "smart" TV is not really needed as a $50 Roku box already does a lot more in the streaming area than is even promised in the far future by smart TV makers. The track record of manufacturers updating their TV's software is beyond abysmal (LG, I am looking at you)
B) The internet service providers control the "last mile". There is a big risk that they could switch to tiered pricing as more and more people use streaming video. Currently most offer a all you can eat model. Since many of them have monopolies in their local market they can charge what they want after a little complaining from regulators. (The ADSL offered by phone companies isn't really a competitor since the relative speeds are much lower). A good analogy for this is the water utilities. In the early days, you paid a flat rate and could use as much water as you wanted. Eventually the water companies got tired of putting in ever bigger pipes and started metering the water and people used a LOT less. Here people may actually still use more data, but the surplus will go to the ISP company.
C) whether the TV is "smart" or people are smarter and use a Roku box or similar, why would anyone rush to use Netflix? There are literally hundreds of channels on Roku, offering every kind of content imaginable (including Netflix, it's true). But why would Netflix's current sad sack collection of content make a subscription so compelling? Given that Netflix content id due to diminish even further when the Starz content goes offline, why do you think people will flock to Netflix?
D) What is the barrier to entry to this streaming business?Why do you believe that profits will not be competed away to zero? The only barrier to entery seems to be actual ownership of content. The only people I can see who could actually make some money is the big studios if they decide not to license their content and elect to stream it themselves.
E) Given the extremely high failure rate of content development (consider how many heavily promoted TV sitcoms are pulled after a episode or two) how would a cash strapped company like Netflix produce content esp. when it has a higher probability of failure? What makes you think that every bit of content will be a Band of Brothers or a Sopranos?
PNC Is Hot; Fifth Third Still A 'Buy' [View article]
Book value of a bank? Did I really see that in writing? Do you really know what securities 5/3 has on the balance sheet and their actual mark-to-market value? Do you really know their exposure through derivatives? Didn't 5/3 almost go under in late 2008/early 2009, being propped up by taxpayer bailout money becoming almost a penny stock in the process? Isn't almost the entire management team who oversaw that shining accomplishment still there (true there were some symbolic sacrifices, but look at the operational levels)?
Covered Call Writing: Early Exercise Of Options [View article]
I was under the impression that the brokerage houses, at least for retail investors, automatically assigned the shares from ITM call to themselves, sold the shares on the market and then credited the strike price to the call writer and credited the difference between the stock price and strike price to the call buyer....is this not true?
Many retail investors may not have the cash or margin to actually accept a assignment of stock....I've always closed/sold the options before exercise so never had this actually happen to me...
Expect Netflix Shares To Drop After Rally As Margins Fall, Profit Vanishes [View article]
Netflix: Devil In The Details [View article]
Netflix: Devil In The Details [View article]
Netflix: Devil In The Details [View article]
Clearwire: At Long Last, Positive EBITDA And LightSquared Collapse Confirm Deep Value [View article]
Quote of the day, courtesy of new RIM (RIMM) CEO Thorsten Heins: "Sometimes we innovate too much," in explaining why RIM has been struggling. Watch Heins' video message to employees. [View news story]
Should You Short These 5 Stocks In 2012? [View article]
Chipotle Mexican Grill: Why I'm Skeptical, And Short [View article]
The visual evidence on google maps is quite compelling in that Chipotle has a lot of growth left. Just opening a location next to every college and university can keep them going for a long time. In the local college town there is a facebook page up for at least a couple of years begging Chipotle to open a location. This despite a slew of Moe's Southwest Grills and local burrito joints.
On the other hand, the prices at CMG are quite steep. A burrito plus a drink now sets you back $10.
Many locations, esp the busier ones tend to be quite dirty esp at peak times since the entire staff seems to be busy serving burritos at such times. I've had a number of experiences with Chipotle where I've felt disgusted at the overall cleanliness. I avoid going there during peak times.
Their overall menu hasn't changed (except now they have added brown rice) in the last 10 years. It's getting to be a bit long in the tooth.
The loud music in the locations is very painful. I suspect that the music is kept loud to foster stress and force the patrons to leave asap after eating.
Also, Chipotle's lack of a franchise model means that growth is, of necessity, slow. Their lack of debt essentially means they are not deploying capital effectively.
On the whole, I'm neutral on CMG. I think there are valid concerns about overvaluation, but I also think it is dangerous to short a fundamentally sound company that has so much bullish emotion attached to it.
Why Netflix Is A Buy [View article]
b) it's easier to update the hardware in a $50 box (faster chips, better graphics) than update the hardware in a $2000 TV. People will not mind buying a new $50 box.
c) It is easier for content providers to deal with one interface for delivering content than to deliver content to the inbuilt firmware/software of a dozen different TV manufacturers
d) TV manufacturers (and OEMs in general) are not too concerned about updating the software for the legacy hardware they have already sold, preferring to concentrate on the new hardware they want to sell. Samsung is an example, with most of the older handsets still running very old versions of Android.
Why Netflix Is A Buy [View article]
B) The internet service providers control the "last mile". There is a big risk that they could switch to tiered pricing as more and more people use streaming video. Currently most offer a all you can eat model. Since many of them have monopolies in their local market they can charge what they want after a little complaining from regulators. (The ADSL offered by phone companies isn't really a competitor since the relative speeds are much lower). A good analogy for this is the water utilities. In the early days, you paid a flat rate and could use as much water as you wanted. Eventually the water companies got tired of putting in ever bigger pipes and started metering the water and people used a LOT less. Here people may actually still use more data, but the surplus will go to the ISP company.
C) whether the TV is "smart" or people are smarter and use a Roku box or similar, why would anyone rush to use Netflix? There are literally hundreds of channels on Roku, offering every kind of content imaginable (including Netflix, it's true). But why would Netflix's current sad sack collection of content make a subscription so compelling? Given that Netflix content id due to diminish even further when the Starz content goes offline, why do you think people will flock to Netflix?
D) What is the barrier to entry to this streaming business?Why do you believe that profits will not be competed away to zero? The only barrier to entery seems to be actual ownership of content. The only people I can see who could actually make some money is the big studios if they decide not to license their content and elect to stream it themselves.
E) Given the extremely high failure rate of content development (consider how many heavily promoted TV sitcoms are pulled after a episode or two) how would a cash strapped company like Netflix produce content esp. when it has a higher probability of failure? What makes you think that every bit of content will be a Band of Brothers or a Sopranos?
Lululemon Athletica: Hard To Justify The Current Valuation [View article]
How To Invest Against the U.S. Snow Drought [View article]
PNC Is Hot; Fifth Third Still A 'Buy' [View article]
Covered Call Writing: Early Exercise Of Options [View article]
Many retail investors may not have the cash or margin to actually accept a assignment of stock....I've always closed/sold the options before exercise so never had this actually happen to me...
Education Management Co.: Litigation And Dependence On Title IV Will Sink The Company [View article]
EDMC is being supported, it looks like, by interested players. They can keep the stock irrational a lot longer than most investors can stay solvent.