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Don Dion
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Don Dion (donalddion@gmail.com, @DRDInvestments) is the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets and various other financial assets for the Dion family.... More
My company:
DRD Investments, LLC
My blog:
Don Dion's IPO Analysis
My book:
The Ultimate Guide to Trading ETFs
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  • BOX Short Idea- Ring The Cash Register

    Our price target has been met. We believe investors who shorted the stock in anticipation of the lock up expiration should consider covering and booking their solid profits.

    On July 20th we wrote:

    Early Market Performance: Strong Start, Weak Overall Performance

    Box's IPO priced at $14 per share, higher than its expected price range of $11 to $13. The stock opened on the first day of trading at $20.20 and closed at $23.23, for an increase of 65.9 percent. Since then the stock has declined steadily to the climbed steadily to the $18.60 range.

    Conclusion: Sell BOX Ahead of Lockup Expiration

    Since the January 22, 2015 IPO, BOX stock made strong gains. Early investors could be ready to cash out and move on.

    If this occurs, a flood of new shares available for sale could depress BOX's share price, at least temporarily. If even a portion of BOX's insiders (6 firms and 12 individuals) decide to sell - the impact could be significant.

    Greatest negative returns at the time IPO lockup expirations have been found to be -5.8% for tech firms, such as BOX. We suggest investors short BOX ahead of the expiration date to take full advantage of potential declines.

    Jul 23 7:29 AM | Link | Comment!
  • Quiet Period Expires Today For GI And EVH

    We are expecting positive detailed investment research reports on GI and EVH due to the expiration of the quiet period for GI and EVH

    Tags: GI, EVH
    Jun 30 9:39 AM | Link | Comment!
  • Yahoo! A Buying Opportunity, Following Pullback

    Technology giant Yahoo! (NASDAQ:YHOO) is moving forward with its plan to spin-off a new company, which it will then endow with a massive asset. Yahoo! plans to transfer the 384 million shares of Alibaba Group Holding LTD (NYSE:BABA), which it currently holds.

    Shares of the new company will be distributed to Yahoo! shareholders. Stockholders will then own shares of two separate stocks, and the new company that will be named Spinco. Potential benefits to the spin-off plan may include favorable tax treatment, and higher value in holdings to shareholders owning stock in both companies.

    Yahoo! expects the spin-off to be completed in the fourth quarter of 2015. If closing conditions and regulatory approval are forthcoming, the spin-off of the shares will save Yahoo! about $16 billion dollars in tax obligation.

    Optimism Under Mayer

    Yahoo! CEO Marissa Mayer has been with the company for about three years, having moved to Yahoo! from her position as a tech executive with rival Google (NASDAQ:GOOGL). She has concentrated efforts on growing Yahoo!'s market share in a very competitive niche of tech titans. There is an air of optimism under her direction as investment in growth businesses, expansion of the stock repurchases program, and the pending spin-off of Alibaba shares support belief that the Yahoo! stock price could grow if the current business plan proves successful.

    Bright Spots in Yahoo!'s Mobile and Search Results

    Yahoo!'s recent earnings reports have been a mixed bag, with first-quarter earnings for 2015 missing Wall Street expectations by about 3-cent a share. Revenue for Q1 was $1.04 billion versus expectations of $1.06 billion. Compare this result to Q1 2014 when revenues were $1.09 billion. The Q1 adjusted earnings equated to 15-cent a share, as opposed to the consensus expectation of 18-cent a share.

    Display advertising revenues decreased, while others areas of revenue production, such as search revenue, increased. Mobile growth was up substantially year-over-year and looks to be a promising revenue producer over time. According to CEO Marissa Mayer "Yahoo! is amidst a multi-year transformation to return an iconic company to greatness". There are certainly indications that Yahoo! is taking calculated steps to move in a positive direction. The purchase of social media site Tumblr may prove to be a solid revenue generator. Additionally, moves such as acquiring the mobile app analytics company Flurry make Yahoo! a potential leader in attracting mobile developers.

    Lining Up WIth Peers Google, Facebook

    Yahoo! continues to hold its own when rated against its peer group. Morningstar, ranks Yahoo! a four star company (1-5 stars; 5 as best). As comparisons, Google (NASDAQ:GOOG) is also rated 4, while Facebook (NASDAQ:FB) is a 3.

    (click to enlarge)

    (Nasdaq.com)

    While Yahoo!'s market cap of $38.5 billion might appear paltry, compared with Google ($381.2 billion) and Facebook ($247 billion) - coupled with significantly smaller income - it is still formidable.

    Conclusion: Buying Opportunity

    Yahoo! has made some solid core business decisions, following the BABA windfall, including several exciting acquisitons. Layoffs have tightened the payroll belt and streamlined functionality. CEO Mayer has indicated that 2014 was a year spent collecting data and experimenting with the product line; they are now ready to implement what they have learned.

    We see the current pullback in YHOO shares as a buying opportunity for those bullish on the firm and CEO.

    (click to enlarge)

    (Nasdaq.com)

    For current shareholders; we see the Spinco development as a reason to hold through the second half of 2014 while changes begin to take root.

    Jun 29 8:52 AM | Link | Comment!
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