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  • Travelzoo's Second Quarter Was Better Than It Appeared [View article]
    Decemberist is correct. People overestimate the meaning of "members". I'm probably counted as a member, but haven't read a TZOO email in 2 years. Active users is key, and TZOO does not provide that number. However, I speculate that their active user base is in steady decline, given the revenue numbers. There is value in TZOO, of course, but the management team is terrible here and they having neglected the business for years due to a fundamental lack of vision. It's hard to say, if they will ever reignite growth, in which case the stock will keep falling.
    Jul 18, 2015. 08:12 AM | Likes Like |Link to Comment
  • Pernix Therapeutics: Prescriptions Stabilizing, Athyrium To Stop Dumping Stock Soon [View article]
    I agree with crimon's comment. They'd refinance sooner than pay down the debt. The problem is that it's now equally probably that Treximet growth doesn't accelerate, in which case, they will be in serious trouble, since they won't be able to refinance this expensive debt. Sometimes these deals to acquire existing undermarketed drugs and jack up the price, simply don't work out. Guess, we'll see.
    Jul 16, 2015. 07:18 AM | Likes Like |Link to Comment
  • Pernix Therapeutics: Prescriptions Stabilizing, Athyrium To Stop Dumping Stock Soon [View article]
    Thanks for the quick response. Will read your previous articles. Incidentally, I'm not surprised by the slowdown, based on your explanation. Tripling the price on what is basically a combo of two widely available generics seems like a very poor business strategy (it's also incidentally morally reprehensible, except of course to those who hold the notes).
    Jul 15, 2015. 08:53 AM | Likes Like |Link to Comment
  • Pernix Therapeutics: Prescriptions Stabilizing, Athyrium To Stop Dumping Stock Soon [View article]
    As far as I can tell, PTX has around $30 million in interest expense costs a year (12% on $220 and 4% on $130), so EBITDA is basically cut in half just from debt servicing costs. Unless there is substantial growth in prescriptions (and is this possible, if Treximet is simply a combination of two widely available generics?), I don't see how this is an attractive investment for the equity holder, though owning the debt maybe interesting.
    Jul 15, 2015. 07:49 AM | Likes Like |Link to Comment
  • Why We Remain Bullish On Cree Despite The Recent Steep Fall In Shares [View article]
    "For fiscal year 2015, the company repurchased 16.0 million shares of its common stock at an average price of $34.33." I wouldn't bet on a management team that just wasted over $500 million of shareholder money buying back their overvalued stock. Terrible allocation of shareholder capital.
    Jul 15, 2015. 07:13 AM | 6 Likes Like |Link to Comment
  • Dip In JAKKS Pacific Shares Is An Immediate Buying Opportunity [View article]
    As mentioned above, the key piece of information for JAKK is Lawsuit Settlement, whereby current management has no say in any future acquisition offers, increasing the odds of a takeover within the next year. As for valuation, it is always difficult, if not impossible, to value these companies as an outsider given that there are too many variables and uncertainties. However, I would mention that the projections and valuations in the article and comments, ignore the potential synergies and cost savings from an acquisition. Basically, JAKK's cash flow would be significantly higher under a different management team and/or corporate entity, and as such the valuation needs to take that higher level of potential cash flow into consideration. Ultimately, back in 2011, Oaktree supposedly offered JAKK $20, so I think an independent Board now would be quite determined to get at least that in any new takeover.
    Jul 9, 2015. 01:40 PM | 2 Likes Like |Link to Comment
  • Export-Import Bank to halt lending [View news story]
    I hope this helps people understand that the Republican party has become completely usurped by a fringe lunatic minority, and has now become the anti-business party. It is unthinkable how anyone can be against the Ex-Im bank. Sure, it can use some reforms, like any bank could, but to think that Ex-Im bank overall is somehow bad for business is sheer lunacy. Closing the Ex-Im bank will only hurt US business, and benefit international competitors, who are laughing at our stupidity of not funding a export-import bank.
    Jun 30, 2015. 06:53 AM | 7 Likes Like |Link to Comment
  • Integrated Electrical Services Corp: An Overnight Turnaround 4 Years In The Making [View article]
    Taking it private would certainly jeopardize the tax loss carryforwards, as it is considered a change of ownership under Internal Revenue Code Section 382. Of course, Tontine can hire an army of lawyers and accountants to figure out a way around this regulation, but it's really not worth their time to get involved in a legal mess trying to preserve the carryforwards with a go private transaction. They are better off just getting the public stock up, which they can do by making small acquisitions here and there.

    Overall, I see a near zero probability of a take private transaction here, and I don't consider that a risk here at all. The main risk is that Tontine simply sits around and does nothing with the company, taking no advantage of the carryforwards.
    Jun 28, 2015. 10:51 AM | Likes Like |Link to Comment
  • Integrated Electrical Services Corp: An Overnight Turnaround 4 Years In The Making [View article]
    BTW, my theory with Lindstrom is quite different. He's 42 and been working for Tontine for nearly a decade. I'm sure the future he saw with IESC was precisely in making a ton of acquisitions to take advantage of the $400 million in tax loss carryforwards and boost the stock tremendously. Unfortunately, Tontine has been moving at a snail's pace with regards to acquisitions, and I'm sure this frustrated Lindstrom, so he moved on. He certainly didn't own enough stock to really make it worth his while to stick around while Gendell gave a thumbs down on every acquisition he put forward.

    Honestly, I'm not quite sure why Gendell is moving so slowly with IESC, and I've been losing patience also. But, every time I want to sell, I think of the tax loss carryforward situation and keep hoping they will eventually make a huge acquisition that will make this into a 10-bagger.
    Jun 27, 2015. 09:57 PM | 1 Like Like |Link to Comment
  • Integrated Electrical Services Corp: An Overnight Turnaround 4 Years In The Making [View article]
    Wow, I can't believe anyone else is following this stock. I took advantage of the rights offering, and I'm sure a handful of others did too. It was an incredible deal. The most important part of the IESC story is the over $400 million in tax loss carryforwards. There is no way Tontine will take this private, as if they do, they will most likely lose all these carryforwards. I'm sure there is a way to do it, but it's quite a hassle and legally problematic. More likley is that Tontine keeps having IESC make small acquisitions, adding slowly to IESC's profits on a tax-free basis.
    Jun 27, 2015. 09:29 PM | 1 Like Like |Link to Comment
  • SCOTUS upholds Obamacare subsidies, healthcare stocks rally [View news story]
    Last thing ACA is socialist, unless by socialism you mean any program that increases profits for business. The ACA has been a boon to every for-profit insurer, hospital, pharmaceutical company, and biotech in the country.
    Jun 25, 2015. 11:46 AM | 14 Likes Like |Link to Comment
  • Is Biotech Finally In A Bubble? [View article]
    Every single breakthru product that you use, was originally developed by the government and merely improved upon or sometimes usurped by the private sector. Just one example should suffice: the Internet.

    As for biotechnology, every single major health advance was fueled by some sort of government subsidy or by some major government-funded research program, and then subsequently usurped and improved upon by a private entity. Again just one recent example should suffice: the Human Genome Project (I won't get into the role of Celera here as HGP dwarfs that effort, and ultimately Celera borrowed tons of stuff from the public effort).

    Modern day capitalism has always been about a collobaration between government and private business. They work together with government funding the massive basic research which private business will never undertake, and then private business molding the research into marketable products, i.e. making it practical.
    Jun 20, 2015. 01:04 AM | 3 Likes Like |Link to Comment
  • Is Biotech Finally In A Bubble? [View article]
    Biotech stocks are surely in bubble, even the large caps, because the business in entirely predicated on ever soaring drug prices, which if not dealt with, will consume the entire US economy within a decade. Prices for anything healthcare related is 10X+ higher in the US than anywhere else in the world, for no logical reason, other than that the companies can get away with predatory pricing here, while in other civilized countries there is a general consensus among even the capitalists that gouging consumers on healthcare is both immoral and unsustainable from a business perspective.
    Jun 19, 2015. 06:58 PM | 6 Likes Like |Link to Comment
  • Fairway Group: Consumer Conferences As An Upside Catalyst [View article]
    Of course, a PE firm may like it at this price (not that means anything, though), as they recapitalize the balance sheet and are only interested in cash flow to support debt. How much a PE firm will pay for the company depends on the financing costs, which is unknown. If the PE firm can get the cost of the debt down via refinance, then obviously there is value to be extracted. But this is sort of meaningless to a passive equity holder, especially since a smart PE firm will wait to acquire this when it gets to distressed level.
    Jun 12, 2015. 11:32 AM | Likes Like |Link to Comment
  • Fairway Group: Consumer Conferences As An Upside Catalyst [View article]
    What does pre-interest mean to an equity investor? They have costs of debt. Plus, if you don't grow you die, no matter what business you are in. FWM only have value to an equity holder for any cash flow over and above $40 million, as $40 million, is apparently the fcf breakeven here ($20 million in interest and $20 million cap-ex). What multiple you put on the FCF above $40 million is anyone's guess. But, I'd say 10X is fair.
    Jun 12, 2015. 11:28 AM | Likes Like |Link to Comment
COMMENTS STATS
505 Comments
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