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Harry Beck

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  • Did Herbalife Executives Conspire To Commit Mail Fraud? [View article]
    The problem is the the FBI won't comment and HLF issued a statement denying any knowledge of a probe. Even if there were a probe, it is possible HLF would not know about it early on until the agents in the cheap suits knocked on their door. The other problem is that these probes take years, not months. This isn't collapsing anytime soon...certainly not this year.
    Apr 14 11:40 AM | 2 Likes Like |Link to Comment
  • 7 Questions For Plug Power Investors [View article]
    They are choosing this company because they are willing to sell their product for a loss! It is really that simple. Tax credits are off in under two years.
    Apr 14 11:29 AM | 4 Likes Like |Link to Comment
  • Plug Power's Recent Drop Is A Great Opportunity [View article]
    And this negative FCF is with their customers having tax credits, which will disappear in under two years. What the longs don't get is that, at some point, the company needs to make money.
    Apr 14 11:25 AM | Likes Like |Link to Comment
  • NQ Mobile Posts Mixed Results, Guides Q1 And FY14 Higher: So Was The Drop Justified? [View article]
    Actually, some of these companies make up numbers all the time. The Chinese RTO scams are legendary. This is not racism, but fact. China has fewer security laws, much less enforcement than in the US (and ours is poor), and a lot more people. As in the USA, fraud is ubiquitous. Once discovered, the questions are: 1) What is the best and safest way to short these companies; and 2) What is the end game that management is attempting to run? Sometimes, it is to steal through other entities controlled by family members. With HRBN, the end game was a big surprise. The shorts were right, but they can sometimes lose being right if they get the end game wrong or it the stock don't crack fast enough.
    Apr 14 11:16 AM | 2 Likes Like |Link to Comment
  • NQ Mobile's Ugly And Highly Questionable Earnings [View article]
    This is the point. There is too much that cannot be explained, and will likely NEVER be explained unless the numbers were never real to begin with. That is the only explanation:The numbers were never real to begin with.
    Apr 14 11:01 AM | 2 Likes Like |Link to Comment
  • NQ Mobile's Ugly And Highly Questionable Earnings [View article]
    The question isn't if there is likely financial fraud. We can thank Muddy Waters and the author of this article for taking care of that issue. The question is how to play this on the downside. As always, someone writes a damning article (or several) about a company's possible business or accounting fraud, and the idiot analysts with firms looking for investment banking or other business still have "BUY" or "HOLD" ratings with price targets based on models that assume the stated numbers are not fabricated. The good news is that the stock has plenty of room to drop. The bad news is that there will always be long analysts and investors that cannot accept they are wrong. So, how is everyone playing this on the short side?
    Apr 14 10:58 AM | 1 Like Like |Link to Comment
  • Plug Power's Recent Drop Is A Great Opportunity [View article]
    The problem with Seeking Alpha is that it is a magnet for pumpers trying to get a headline...and it works.
    Apr 10 09:53 AM | 5 Likes Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    "Why would Russia, which has a fordmidable culture be associated with the emerging market."

    The whole point when making decisions when the outcome is unknown, as poker strategist David Sklansky pointed out, is, "Are you getting the best of it?. At a P/E ratio less than Pakistan combined with a dividend that doubles your investment even 7 years, you are getting the best of it. At some point Russia goes to a P/E of 7 or 8 even with all the political risk. If may not happen for a decade, but you are getting paid to wait.
    Mar 31 01:27 PM | 1 Like Like |Link to Comment
  • Gazprom's Khosrazchyot Or Who Depends On Whom? [View article]
    I was long Gazprom a while back and was quickly stopped out. Now I am back in (a little) because the political risk probably won't get any greater. The corruption will never disappear, but as others noted the P/E and forward earnings ratios are insanely cheap, cheaper than Egypt, Pakistan and Lebanon.
    Mar 13 05:11 PM | 3 Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    LPHI is indeed Teflon...the SEC couldn't prove any of the case against them. The accounting fraud conviction was recently thrown out. The only thing remaining that the firm needs to overcome in order to grow again (in my opinion) is the appellate ruling in their home state that the fractional investments are securities. Securities under the Act require disclosure and registration. Disclosure, as I understand it, means showing past performance in an understandable, consistent and meaningful way in addition to disclosing up front and ongoing fees and commissions. Will prospective clients purchase with all this disclosure? Will LPHI win their final appeal on the matter? Stay tuned!
    Mar 13 04:50 PM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    The issue to me is not having the licensees passing a Series 6 or 7 exam. The problem is the full disclosure requirements. The current method of showing returns won't fly. All those policies that never matured on time will be thrown into a standard measure of performance for the whole world to see, along with full disclosure of fees, expenses and commissions. Right now the marketing and sales people do not use any conforming performance presentation standard. Ouch!
    Feb 28 08:12 AM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    Yeah, they got nailed for accounting fraud but they escaped the serious charges. Just when things were looking up they got nailed again in their home state. The appeals court ruled the fractional investments are securities. That hurts because it means disclosure. Who would buy this stuff if past performance and fees/commissions were disclosed? Both will likely be appealed. I don't see why the highest court in TX would overturn this, but that is up to the judges. If the Texas ruling sticks, the business model is dead as is.
    Feb 28 08:03 AM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    It keeps getting more interesting, since the current Life Partners business model is dead again! News from the Third Court of Appeals in Austin: "...the life settlements offered by Life Partners are investment contracts and, therefore, qualify as securities subject to regulation under the Securities Act."

    Now, who will buy a fractional investment if the investment is subject to registration and the full disclosure would require the past returns are to be shown to a prospective client along with all fees and commissions and risks? I don't know how many LEs would satisfy the requirement, but it may not matter.
    Feb 6 04:21 PM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    Life Partners put out a press release sounding like they had a complete victory. Still, Pardo and Peden along with Life Partners were found to have violated 12b-20, 13a-1 13a-13 of the 1934 Act. Pardo violated 13a-14. Pardo, Peden and Life Partners violated 17(a)(1) of the 1933 Act.

    The stock is up with the faithful hoping this changes the continued losses. The problem is that testimony was heard indicating the company knew returns were much, much less than promoted to the investing public, and that master licensees didn't know the LEs were off by so much. This verdict (no matter how you look at it) doesn't change the poor returns the fractional investors have received on average in the past, forcing many to resell some policies in an effort to raise cash. Resales are now 60%+ of the overall revenue. I am not sure how much trust new fractional investors will have in the company, regardless of the eventual outcome (it ain't over yet). After all, there has been much negative publicity in the media about how these investments have performed, and why the State of Texas and the SEC wanted to tackle Life Partners, Pardo and Peden.

    Life Partners, Pardo and Peden intend to ask the judge to dismiss all claims regarding revenue recognition. Even if successful to dismiss these claims, it is probable Life Partners will grow only if they have a product that gives the returns investors want, and it on average has to be better than 1 or 2 percent. Assuming fractional investments are a security, the current returns will have to be disclosed using an accepted performance presentation standard. If the fractional investments are not considered a security, Life Partners can likely continue to do whatever they want.
    Feb 4 02:05 PM | 2 Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    I just saw all these recent comments...I have been away for a few weeks:
    1) Life Partners is still very much in business. The Texas ruling that said settlements are securities was recently overturned, but the judge in the SEC case ruled settlements are securities. Hmmm. In the recent 10-K Life Partners discussed a change in the business model if that ruling stands.
    2) Life Partners sold off the potential income from that trust investment to raise cash. I am still convinced that investment will turn out poorly, but perhaps others out there can convince me I am wrong. There hasn't been a lot of disclosure about it. I don't think it was ever revalued (for the filings) after the 2008 VBT.
    3) Sales of new policies to investors is terrible. Over 60% is now coming from resales. I guess when you have a period of time where less that 5% of the policies mature as expected, there will be investors who want to get rid of some policies before they mature...even at a loss. There is little cash remaining in the company, with much of it going out the window in the form of dividends, with the CEO (or his family trust) receiving over 50% of it. The company still has negative operating cash flow.
    4) LPHI isn't accused by anyone of stealing money or selling illegal investments. I like the concept of life settlements. LPHI is accused by the SEC and other plaintiffs of having a Dr. Cassidy produce LEs that were consistently shorter than what mainstream providers produced on the same policies. There is nothing wrong with having an opinion on what methodology produces a better LE (this is a LPI argument). What (I think) the SEC contends is that investor returns would have been around 1% based upon the Dr. Cassidy track record, which the Commission claims was known to LPI/LPHI at a time when both fractional and stock investors believed otherwise and at a time when the CEO was hawking double digit returns in public forums. Is this really stock fraud or does it remotely relate to insider trading? The jury will decide shortly.
    5) Even if the SEC does not prove their case, we still don't know if the judge's bench ruling regarding life settlements being securities will stand. LPHI will certainly appeal. If it does stand, who would want to buy a fractional investment if the real track record must be disclosed?
    6) So how should an investor value this stock? You tell me, since I can't comprehend the current price unless investors believe the SEC will lose (and all the other civil cases, too) and that the judge's ruling stating life settlements are securities will be overturned. If that ruling is not overturned, will an alternate structure requiring full disclosure fly? If the ruling is overturned, did the negative publicity of the SEC and TSSB cases, the Wall Street Journal and Texas press (including TV), etc. hurt sales permanently presumably because potential investors doubt getting high enough returns to make an investment in life settlements worthwhile? I currently have no position in the stock because it trades irrationally (to me). That is not to say I won't consider shorting it if some part of the SEC case sticks.
    7) The resale number tells a lot. It will be interesting to see if that number increases or decreases over time.
    8) The current trial transcripts, as I understand this, are not available to the public. I'd love to know if the company knew how well or poorly the investments were doing, and when they knew this. I imagine the SEC would call an accountant or CFO or clerk or someone who worked there as a witness. This information or what was know by whom and when it was known would tell me a lot about the character of the people involved.
    Feb 1 01:10 PM | 1 Like Like |Link to Comment