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  • 7 Reasons To Buy This Stock With A 7 Handle [View article]
    Here's an 8th reason to buy: The company just completed a $75M share buyback.

    One can also conclude that the company WILL announce a good quarter and good guidance because GTAT would probably not have completed their buyback if they knew Q1 was bad.

    As CEO of a publicly traded company, if you want to buy your own shares back on the open market as cheaply as possible AND if you knew Q1 and guidance would be horrible, you would WAIT until the stock tanked to finish your buy back. (I also have no doubt that some CEO's deliberately book a bad quarter when they want shares to drop for their buyback).

    The fact that GTAT finished their buyback last month tells us that they thought the stock wouldn't remain below $8.00

    One month ago on March 12th, they announced they completed the buyback at an average price of $7.95/share:

    So, with shares trading below $7.95 this week, people buying GTAT recently are getting a better deal on the shares than the company itself was able to get.

    Additionally, if you (as GTAT management) want to buy back, you would refrain from announcing good news during the buy back and save the news for near the earnings report.

    I think these facts are the most telling of all.
    Apr 13, 2012. 03:25 PM | 2 Likes Like |Link to Comment
  • Looking Beneath OpenTable's Q4 Upside Surprise [View article]
    Thanks for your comment, Andrew. Indeed, I did get share count from the earnings statement. Let's revisit this when the 10-Q balance sheet comes out for actual ending shares...

    As for the fact that they finished the buyback in January (about 200K remaining of the 1.31 total buyback), I don't think that'll change things because they already broke out the amount they finished buying a/o 12/31/11 as 1,089,000 shares.
    Feb 8, 2012. 10:52 AM | Likes Like |Link to Comment
  • Making Money From Apple Derivatives [View article]
    1. Yes, but the guy who wrote that article you referenced didn't cite any references to back up his claim that there are "indications" that TQNT & RFMD are outcompeting SWKS for the iPhone5.

    2. Then he discloses that he's short SWKS.

    3. Finally, the iPhone5 isn't even near being in production yet, so this author seems questionable if he doesn't know the difference between the iPhone4s and the future iPhone5.
    Dec 9, 2011. 12:58 AM | Likes Like |Link to Comment
  • OpenTable: Trying To Not Screw Up A Free Lunch [View article]
    Again, facts are stubborn things...

    --"OpenTable is a seasonal biz so the same Q2 to Q3 sequential pattern exists in prior years. "

    Not true. You need to look at the 2010 Q2 to Q3 and there was EXCEPTIONAL growth last year. So your seasonality explanation for the uninspiring 2011 Q2-Q3 sequential growth doesn't hold water.

    I'll make it easy. Here's Q2 (again recall we're discussing International growth, so compare International stats in the two PR's):

    And Q3:

    Does the fact that 2010 Q2 to Q3 INTERNATIONAL revenues grew from $1.3M to $1.5M bring a sense of remorse for your prior swagger? ;)

    That's 15% sequential growth (75% annually if compounded) in what you claimed is the seasonally weak period.

    Now compare that with 2011 Q2 to Q3 sequential revenue growth of a paltry 6% (26% compounded) as I illustrated above. Clearly, OpenTable's International growth is slowing and it very well could be due to Livebookings taking market share as they've essentially already told us via their press releases.

    So again, is Livebookings desperate? I think not. The numbers don't support that notion.

    Sure If you like the 10-Q better that's your choice. Same data. And whether or not OpenTable is a tech stock or not is a non-issue. Call it tech-media-marketing. Whatever. In either case, the process of progressive price decreases is not always a bad sign in this niche.
    Nov 28, 2011. 12:27 AM | Likes Like |Link to Comment
  • OpenTable: Trying To Not Screw Up A Free Lunch [View article]

    1. You'll note I mentioned International SEQUENTIAL GROWTH being uninspiring and you cherry-picked YTD growth instead. Looking at OpenTable's Q2 to Q3 sequential growth we have:

    Q2 International Results

    * Installed restaurant base as of June 30, 2011, totaled 7,067, a 276% increase over June 30, 2010.
    * Seated diners totaled 1.6 million, a 249% increase over Q2 2010.
    * Revenues totaled $5.0 million, a 289% increase over Q2 2010.
    * Non-GAAP adjusted EBITDA totaled a loss of $0.5 million compared to a loss of $1.2 million in Q2 2010.
    * In Q2 2011, contributed approximately 668,000 seated diners, $2.9 million of revenue and $0.3 million of non-GAAP adjusted EBITDA to the Company's results.

    Q3 International Results

    * Installed restaurant base as of September 30, 2011, totaled 7,629, a 243% increase over September 30, 2010.
    * Seated diners totaled 1.8 million, a 233% increase over Q3 2010.
    * Revenues totaled $5.3 million, a 254% increase over Q3 2010.
    * Non-GAAP adjusted EBITDA totaled a loss of $0.7 million compared to a loss of $1.2 million in Q3 2010.
    * In Q3 2011, contributed approximately 665,000 seated diners, $2.9 million of revenue and loss of approximately $0.1 million of non-GAAP adjusted EBITDA to the Company's results.


    a) OpenTable's "TopTable" seated diners DECLINED from 668,000 in Q2 to 665,000 in Q3.

    b) Total International Revenues INCREASED from $5M to $5.3M = 6% Sequential increase. Compounded annually this is a mere 26% annual rev growth rate -- a far cry from the 200%+ "growth rate" that Barry and others were hoodwinked into thinking exists. Can you see why I stated their Euro-growth is "uninspiring" compared to their headline 254% YoY pseudo-growth stat?

    c) Q2 Loss of $0.5M vs Q3 Loss of $0.7M. So Losses INCREASED by 40% sequentially.

    d) Seated diner and total restaurant stats INCREASED at a reasonably healthy clip, but still nowhere near the 200%+ that was stated in the article.

    OK, to conclude: What does the 40% increase in International losses and slowing International revenue growth tell us if there are more seated diners? Pricing pressure (is OpenTable having to lower pricing in Europe)? Or hugely inefficient operations?

    Here is Livebookings' recent Q3 press release (they're not publicly traded):

    Note they use the phrase "Organic Growth" to distinguish themselves from the type of earnings releases OpenTable puts out that gloss over the fact that their 254% international revenue "growth" was largely acquired growth not organic.

    Note also that they have 9000+ restaurants vs OpenTable's 7629 international restaurants yet OpenTable seated only 1.8M diners vs. 2.8M diners for Livebookings!! Clearly Livebookings model is seating more diners per restaurant (297 vs 236 by these rough stats).

    And in their press release they state:

    "Livebookings’ growth in Europe continues to demonstrate strong momentum, as we deliver an average of 297 diners to our restaurant partners this quarter, significantly more than our nearest competitor in Europe." (Obviously, they're referring to OpenTable).


    There... you asked for data to "demonstrate the strength of the Livebookings business model" vs. OpenTable's business model and I've provided it. Facts are stubborn things.

    Finally, you state "Lower prices is not often the sign of a good strategy."

    We'll have to agree to disagree.

    In tech, lowering prices is MORE OFTEN a sign of healthy competition and the process of progressively lowering prices is what is so often called "creative destruction" in technology. Think of Freebookings like a price-leader at a supermarket that gets people's interest and then they buy other stuff at the store.

    In this case, it's probably a good strategy. Now that they've already incurred the Freebookings development cost, the marginal cost for them to offer a US-Only FREE reservations system is next to nothing yet, can have a profound deleterious impact on OpenTable's growth & margins in their own turf.

    We shall see... Thanks for the dialogue.
    Nov 24, 2011. 02:30 PM | Likes Like |Link to Comment
  • OpenTable: Trying To Not Screw Up A Free Lunch [View article]
    Another data point that counters the "Freebookings as an act of desperation" theory:

    They don't appear to be desperate in Europe because in their most recent earnings report, Livebookings claimed to be GAINING market share.

    It's my understanding that the TopTable acquisition is not panning out as well as OpenTable had hoped for their Europe expansion plans.

    Is there something that I'm missing here? I see the Freebookings move as doing an "end-run" around OpenTable with OpenTable stuck in neutral doing business as usual with the same high pricing structure.

    Meanwhile, the major social media aggregators (Google & Facebook) are draining the water out of OpenTable's moat as a restaurant aggregator.
    Nov 23, 2011. 08:28 PM | Likes Like |Link to Comment
  • OpenTable: Trying To Not Screw Up A Free Lunch [View article]
    One more point, Barry. You said:

    ---"On one hand, it speaks to a certain desperation on the part of, given OpenTable’s 200%+ growth rates in Europe."

    1. Barry, you need to do a little more background research into the numbers on OpenTable's Euro-growth. They bought TopTable in the UK (10/1/10) and thus were able to "brag" about 200%+ growth rates in Europe and they didn't make it clear in their earnings reports that this was not organic growth, it was ACQUIRED growth that had already been growth experienced by Toptable.

    2. If you take a closer look at the sequential growth stats of Toptable/Opentable in Europe, it is clearly uninspiring.

    3. You don't provide good support for WHY you think Livebookings' rollout of Freebookings is a sign of "desperation," especially in light of the fact that your data on OpenTable hypergrowth is misleading as stated above.

    4. Finally, if Livebookings were desperately losing Euro-market share to OpenTable as I believe you incorrectly allege, it might be an act of "desperation" for them to roll out a FREEBOOKINGS price leader in Europe, which would indeed begin to cannibalize their own business.

    But are you not overlooking the fact that Livebookings is ONLY rolling out Freebookings in the USA, not in Europe? They don't appear to be desperate in Europe. And in the USA, they don't have a lot of market share yet, so this is a way to force pricing pressure on OpenTable in their turf and weaken them. At the same time, they'll pick up new premium-paying clients.

    So I think it's a brilliant strategy, not an act of desperation.
    Nov 23, 2011. 06:06 PM | Likes Like |Link to Comment
  • OpenTable: Trying To Not Screw Up A Free Lunch [View article]
    Barry, fantastic article! You went into more depth than my articles in certain areas.

    With respect to your cited data:

    ---"In North America, there are roughly 600,000 restaurants, about half of which are self-service/fast food and the other half full service. Of the 300,000 full-service restaurants, industry research indicates that 55,000 routinely accept reservations and are therefore able to utilize one of OpenTable’s solutions, either ERB or Connect."

    I had been looking for addressable market stats that distill out of the 600,000 restaurants, those that routinely accept reservations. You indicate that number is about 55,000. Would you kindly state your source?

    This implies that the addressable market is 1/2 saturated, but I'm thinking not all of those 55,000 restaurants will be willing to pay for online reservations anyway, so the true addressable market is probably much less.

    The OpenTable offering has been out for 10 years, so most of the early adopters (the low-hanging fruit) have probably already signed up.
    Nov 23, 2011. 05:42 PM | Likes Like |Link to Comment
  • Online Restaurant Reservations Just Got A Lot Cheaper [View article]

    I just found a working example of a Facebook restaurant page that just installed the Freebookings reservations plug-in today:
    Nov 15, 2011. 12:36 PM | Likes Like |Link to Comment
  • Online Restaurant Reservations Just Got A Lot Cheaper [View article]
    True, OpenTable is currently an effective aggregator that helps diners find restaurants, but with the entire world moving towards the major social media outlets (Google & Facebook), small proprietary social media aggregators like OpenTable are at substantial risk of being sidelined.

    As for the 25c per diner via a restaurant's own website, it's my understanding that the restaurant has to pay a monthly subscriber fee in addition to the 25c per seated diner. OpenTable doesn't list it's pricing online so you have to call someone:

    Here is yet another competitor that has a nearly FREE model (a flat $200/month fee, but restaurant doesn't pay $1.00/seated diner

    And Livebookings/Freebookings shows a "pricing vs feature" comparison in which their free model is truly free:

    Another article mentioning Urbanspoon's "Rezbook"
    Nov 15, 2011. 12:15 PM | Likes Like |Link to Comment
  • Using Operating Cash Flow To Avoid Stocks That Can Cripple Your Portfolio [View article]
    Great analysis!

    Clarification on OpenTable: The 290% "growth" was actually not even organic growth. They acquired 5000 restaurant sites in Europe via their $50 million acquistion of TopTable in Oct 2012.

    Their 10-Q didn't make it crystal clear that the "hyper-growth" in revenues/eps/clients was due mostly to the acquisition of growth that had already occurred within Toptable's business.

    The December quarter going forward will show much more difficult year-over-year comparisons.
    Nov 15, 2011. 09:33 AM | 2 Likes Like |Link to Comment
  • Analysts Need To Get Real About OpenTable [View article]

    Fantastic article! You completely OWNED the Collins Stewart analyst. That guy has to be either a) Naive, b) Low IQ, or c) Dishonest.

    I suspect the latter.

    That said, today's stock behavior was rather surprising, but then again maybe not, given the high short interest (about 50% of float).
    Nov 4, 2011. 12:35 AM | 1 Like Like |Link to Comment
  • Open Table Misses On The Top Line But Hits Target On Bottom Line [View article]
    When evaluating OpenTable's performance, one needs to focus on quarter-to-quarter SEQUENTIAL growth because when people cite annual Year-over-Year comparisons, the data is way skewed by the results from the Toptable acquisition. Toptable was a European restaurant reservations company before OpenTable acquired it on Oct 1, 2010.

    The next quarter (Dec '11) Year-over-Year comparisons -- for earnings/revenue/resta... base -- will be MUCH MORE difficult because they will NOT be comparing against the quarters PRIOR to the TOPTABLE acquisition as is the case this quarter. So we will not see dramatic "growth" rates in the next earnings report.

    Notice that OpenTable's management does NOT make this point clear in their earnings statements (they don't clarify that their international clients jumped by about 5000 restaurants on Oct 1, 2010 due only to the TopTable acquisition!!!). This has created an ILLUSION of rapid growth in their restaurant base.

    Thus, their so-called "growth" is NOT organic growth -- they bought Toptable's 5000 restaurants which is growth that already happened for Toptable BEFORE the acquisition.

    For them to show for their International division in this earnings report:

    - a 276% yoy growth in international Installed Restaurant Base
    - a 249% yoy "growth" in international Seated Diners
    - a 289% yoy "growth" in international Revenues

    , without qualifying the growth was via an acquisition is almost fraudulent.

    Gullible investors reading this earnings release would automatically think the installed restaurant base is growing at a breakneck pace.

    Looking forward, the December 2011 Quarter will probably show only a 20-30% Year-over-Year growth in subscribers when compared to the Dec 2010 quarter because that was the first quarter that added TopTable results to OpenTable's results.

    This is not rapid enough growth to justify shares trading at a Price-to-Sales ratio of 9!

    Note that losses in their International Division are INCREASING sequentially. In the June 2011 quarter, losses were listed as -$0.5M and in the Sept 2011 quarter losses are up 40% sequentially to -$0.7M.

    Note also that total US & International SEATED DINERS DECLINED from 23.8M diners in the June '11 quarter to 23.6M in the Sept '11 quarter!!

    -----Sept Qtr results:

    -----June Qtr results:

    Q2 2011 Consolidated Financial and Operating Summary

    * Installed restaurant base as of June 30, 2011, totaled 22,627, a 60% increase over June 30, 2010.
    * Seated diners totaled 23.8 million, a 53% increase over Q2 2010.
    * Total revenues were $34.3 million in Q2 2011, up 53% over Q2 2010 revenues of $22.5 million.
    o Subscription revenues were $12.6 million in Q2 2011, up 20% over Q2 2010 revenues of $10.5 million. Subscription revenues increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution.
    o Reservation revenues were $18.3 million in Q2 2011, up 70% over Q2 2010 revenues of $10.7 million. Reservation revenues primarily increased as a result of the increase in seated diners. In Q2 2011, contributed $2.1 million to reservation revenues.

    NO HYPER-GROWTH HERE any more! The bloom is off the rose.
    Nov 2, 2011. 12:59 AM | 1 Like Like |Link to Comment
  • Looming Threats to OpenTable From Freebookings, Google, Facebook [View article]
    From another stock message board on the subject of Opentable's value in an acquisition:

    ----"Google bought Zagat for $150 million and that company reportedly made 30-40 million in revenue per year. Open does roughly 3 times that revenue per year, so if Google or someone else would consider buying them it would be for probably $450 million based upon revenue. That is over half of the value of the stock now. Considering the growth of this company is over and will likely decline because paying for a reservation is ludicrous, no one would consider giving them that money now or in the near future. "

    (I think he meant to say "That is LESS THAN HALF the market cap of OpenTable currently")
    Oct 28, 2011. 03:09 AM | Likes Like |Link to Comment
  • Looming Threats to OpenTable From Freebookings, Google, Facebook [View article]


    Note the comment by Magnus Hultberg of Livebookings about the big three (AAPL/GOOG/FB) -- e.g. might perhaps be implying confidently that Google/Facebook might be interested in growing/acquiring/part... into the restaurant space further than the Zagat purchase):

    “....My Best tip is to keep track of what the "big three" do: Apple, Google and Facebook. Which companies they invest in, what they write on their development blog, the news puts the media. They are not always first with the latest what it of new innovative tools and services, but when something good pops up on their radar and they throw resources at it and talking publicly about it, then it's a trend that is worth taking a look at. “
    Oct 28, 2011. 03:04 AM | Likes Like |Link to Comment