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Harry Beck  

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  • 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 01:10 PM | 1 Like Like |Link to Comment
  • Will Blyth Shares Go Parabolic As Unshorted Float Approaches Zero? [View article]
    Agreed. Plus, the shorts are usually right in their assumption about the fundamentals of a company. Timing is another issue, as we all well know.

    I am now out of this name even if the thesis of a squeeze still look plausible.
    Sep 16, 2013. 03:51 PM | Likes Like |Link to Comment
  • Will Blyth Shares Go Parabolic As Unshorted Float Approaches Zero? [View article]
    Based on the option activity, some shorts are already hedging. Devastated? Perhaps, perhaps not. Still, it is an expensive way to hedge and this could go much higher as the mo-mo traders jump on board.
    Sep 15, 2013. 01:32 PM | Likes Like |Link to Comment
  • Green Mountain Coffee: One Of My Favorite Shorts [View article]
    I never assumed GMCR is a cash cow, and I am looking for a way to short it. I was only trying to suggest stocks that have outrageous valuations sometimes keep those valuations for a very long time.
    Sep 15, 2013. 01:26 PM | Likes Like |Link to Comment
  • Green Mountain Coffee: One Of My Favorite Shorts [View article]
    The big accounting issue the shorts see is the inventory levels, which for a while increased much faster than sales. Either sales keep increasing to justify these amazing inventory increases, or something else will happen. In terms of Einhorn, being right does not mean the trade will be profitable. Look at HLF. Do 99% of the people make money in MLM? Of course not. Is the stock a cash cow? You bet. Enough said.
    Sep 14, 2013. 10:27 AM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]
    Well, the Fifth District Court of Appeals, Dallas, Texas ruled last week that life settlements are securities in Texas, reversing other rulings and conforming to the rest of the Untied States. It took LPHI over a week to issue a press release and there is still no 8-K. Since the Life Partners business model depends upon having unlicensed salespeople, I cannot fathom anything is being sold right now. An appeal could take many months. With no sales/revenue, rapidly shrinking assets, and the trials starting in a few months, I have no idea why the stock is still so high. It should easily be below $1.00.
    Sep 13, 2013. 03:37 PM | 1 Like Like |Link to Comment
  • Will Blyth Shares Go Parabolic As Unshorted Float Approaches Zero? [View article]

    The setback seems for real, but the bears are trapped and management seems to know this. I have been a little long and nervous because of the deteriorating fundaments. Still, a squeeze is a squeeze. Did you see the number of calls traded today? I don't know yet if that is a hedge or bullish bet.
    Sep 13, 2013. 03:23 PM | Likes Like |Link to Comment
  • Will Blyth Shares Go Parabolic As Unshorted Float Approaches Zero? [View article]
    The stock is shorted for a good reason but...just like with HLF there are more people who couldn't care less. Nice article. This looks like a squeeze (and a big one) before it collapses. How are you guys playing it?
    Sep 13, 2013. 02:42 PM | Likes Like |Link to Comment
  • Vail Resorts: Owning The Mountain, Shredding The Gnar [View article]
    That is what the press release and cc indicates plus an inflation adjustment on top of the $25 million pre year. Talisker gets to develop 4 million sq. ft. of space.

    I agree with you in that MTN will greatly increase skier days and lodging. I have skied Canyons a lot, and everything is in place except for a larger conference center and the golf course (delayed first because of a lawsuit and later because of $ has started). Vail should be able to increase earnings $10,000,000 off the property by 2017 as they expect to. If the Interconnect gets back on track--and it won't until this insane lawsuit is over--earnings could explode off the Canyons property. The past two years have been poor for snow, the Sierras and Wasatch are due.
    Sep 3, 2013. 01:55 PM | Likes Like |Link to Comment
  • Vail Resorts: Owning The Mountain, Shredding The Gnar [View article]
    It is true, and it is also much more complicated than I described ablove. Before I begin, I made an error. The lease is for $155,000 per year and not $144,000 per year. This equates to less than 1600 lift tickets purchased at the window, which is covered on one lousy day out of a 130-day or longer season!

    Talisker (Jack Bistricer) bought the UPCM lease around 2004, a few years before he bought Canyons from the cash starved American Ski Company. The lease covers some 3700 acres of PCMR land, but not the buildings or parking and some of the lower land. Powdr (owns PCMR, Killington and a bunch of smaller resorts) through subsidiaries put in leasehold improvements believing the lease would have a 2011 extension taking it to 2051.

    Meanwhile Talisker put in something like $70 million of improvements into Canyons, making it a "Top Ten" North America resort, giving Park City three of them. Talisker also made enemies due to their leadership on the SkiLink, a proposal to link Solitude and Canyons via a gondola through federal land. This is the big picture: The four Cottonwood Canyons resorts and the three PC resorts want to "interconnect", giving a European style skiing experience and making it easy to compete with Colorado. All of the land is private except for the Canyons-Solitude link. All these resorts are very close as the crow flies (four boarder each other), but far apart in terms of the open winter roads and the extra powder dumping in the Cottonwoods due to the micro-climate off the lake.

    Anyhow, PCMR sent the lease renewal letter in on a Monday, when it should have been mailed the previous Friday. Talisker did nothing for months, and then claimed the lease was null and void and demanded higher rent. PCMR cried foul, claiming the lease renewal letter was written and signed that Friday (later proved wrong by really pissed off Taliker lawyers in discovery), that Talisker and PCMR had previous dealings about a chair linking the resorts, that Talisker claimed to tax authorities that the lease would go to 2051, etc. Making it more complicated is the wording of the old lease, and what transpired among the parties of the lease BEFORE Talisker bought the asset.

    So this is a mess and a local and industry soap opera. PCMR sued for a declaratory judgment and a trail will be sometime in 2014.

    How does Vail fit into this? Talisker made a world-class resort out of Canyons during a time when the economy tanked, but has investors that want cash flow. All the capital improvement have been made except for a golf course. So Bistricer structured a 50-year lease to Vail with a bunch or renewals making this effectively a sale (a lease might help Vail with anti-trust issues, I don't know because I am not a lawyer). Talisker gets $25 million per year is all in the press release. Part of the deal is Vail picking up the lawsuit over the lease owned by a Talisker subsidiary. So MTN may get PCMR for free, or it may get a higher lease payment (Talisker is paying $3 million per year to Wolf), or it may get nothing. No matter what happens, Vail cannot lose. The lease is a free option that goes with the purchase.

    Vail is also now hedged in case the Interconnect happens. If they did lose Colorado skier days due to an Utah interconnection of seven resorts, they will now make it back in spades simply by owning the Canyons since little lodging can exist near the four Cottonwood Canyon resorts.

    I hope this helps.
    Sep 3, 2013. 01:09 PM | Likes Like |Link to Comment
  • Is This The End Of Life Partners Holdings? [View article]

    In terms of the shorts, I am not sure many are left. The stock trading is interesting, to say the least. The stock has traded 600 shares so far today. Yes, that is 600 shares or $1250 of a stock that had devastating news on Friday (the previous trading day). How can this stock trade so little with the State of Texas being clear that it previously wanted to put Life Partners out of business (and tried to do so), and may try to do so again given this recent court ruling?

    I saw this low volume thing happen once before as a young man wet behind the ears. I'll bet Wacky Waco and others know what I am thinking. I'll just wait and see how it plays out.
    Sep 3, 2013. 12:42 PM | Likes Like |Link to Comment