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  • As Sprint And SoftBank Talks Continue, Where Does Clearwire Stand? [View article]
    The deal with SoftBank has effectively put Clearwire into play. And while Sprint is Clearwire's largest investor, Clearwire's board still has a fiduciary duty to outside investors. And Sprint does not control Clearwire's board. To get them to sign off on a deal, Sprint may have to make an offer for the entire company, not just the few percent it needs to have majority control. Furthermore, the equityholder's agreement that binds Clearwire's strategic investors (Sprint, Comcast, etc...) requires a 75% voting approval to effect a change in control of Clearwire.
    Oct 15 02:43 PM | 2 Likes Like |Link to Comment
  • As Sprint And SoftBank Talks Continue, Where Does Clearwire Stand? [View article]
    Those Form 4 filings indicate that they were automatic stock sales executed in order to satisfy tax withholding obligations, and each of the 3 executives in question (the CAO, the CTO, and the general counsel) still hold hundreds of thousands of shares.
    Oct 15 11:34 AM | 2 Likes Like |Link to Comment
  • As Sprint And SoftBank Talks Continue, Where Does Clearwire Stand? [View article]
    Thank you for the compliments. CNBC has just put out a report stating that its sources have confirmed that SoftBank and Sprint have reached a deal. (http://bit.ly/Xaaw5s)

    The structure of the deal is as follows:
    1. SoftBank is injecting $8 billion into Sprint. $3 billion of that is in the form of a convertible bond exercisable at $5.25. The remaining $5 billion is in newly issued stock at a price of $7.30. SoftBank will be launching a tender offer for the remaining shares needed to get it to a 70% stake.
    2. A deal for Clearwire will NOT be announced on Monday. But Sprint is in fact working towards taking control of the 52% of Clearwire it does not own. The $3 billion convertible bond will be sold well before the SoftBank deal closes in order to finance the buyout of Clearwire's remaining shares.
    3. Sprint is working on finalizing matters related to Clearwire's corporate governance before taking control of the company, which is likely to occur before the SoftBank deal closes, in around 6 months.
    Oct 14 04:38 PM | 2 Likes Like |Link to Comment
  • Buy Geron: Multiple Catalysts Lie Ahead For This Unique Oncology Company [View article]
    Geron isn't a stock suitable for all investors. Everyone has different risk tolerances and time horizons. For investors who can stomach the risks, however, Geron is a good fit. There are many catalysts that will cause the share price to move in the next 12 months, and we think that this company deserves to be looked at by risk-tolerant investors.
    Aug 16 02:20 PM | 2 Likes Like |Link to Comment
  • Clearwire's Solid Q2 Earnings: Improving Fundamentals Support The Bullish Thesis [View article]
    the next major batch of SEC filings will be hitting the wires mid-August, when 13-F filings are due for Q2 2012. But they only capture trades made up to June 30, so they don't provide the most recent picture of who owns the company.
    Aug 6 01:39 PM | 2 Likes Like |Link to Comment
  • Clearwire's Solid Q2 Earnings: Improving Fundamentals Support The Bullish Thesis [View article]
    Thanks you for the compliment. Having Benioff as CEO would indeed be interesting. He has a solid track record of creating shareholder value (salesforce.com went public at $11 and is now over $130), and if he were CLWR's CEO, the tech/financial press would all be writing about how he is challenging AT&T and Verizon. A $5 stock price is not impossible, but everything will have to go right for the company.
    Aug 6 01:34 PM | 2 Likes Like |Link to Comment
  • A Facebook Earnings Review: Long-Term Potential Is Fully Intact, A Buying Opportunity Is At Hand [View article]
    The beauty of a DCF model is that it can be made to produce whatever valuation is needed. Can a DCF model be used to value FB at $7-$9 per share? Of course it can. But a DCF model can also be used to value FB at $27 per share, or $30, or whatever number is needed. Argus, it its coverage of FB, arrives at a DCF valuation in the "high $20's" as they say. Credit Suisse arrives at a $23 value using DCF (their $34 price target is based on what they call "optionality" regarding the company's mobile prospects). And Merrill Lynch uses DCF to get a value in the high $20's as well.
    Jul 29 02:49 PM | 2 Likes Like |Link to Comment
  • Arena Pharmaceuticals: Analyzing The Eisai Partnership, Financials, And The Way Forward [View article]
    The view that analysts have of Arena was but one part of this article. In any case, given the pessimism that is already prevalent regarding this company on Wall Street, that could provide a potential catalyst for the shares. Assuming that Arena and Eisai can outmaneuver Vivus and make Belviq the leader in the obesity market here in the U.S (and potentially Europe as well), analysts will likely have to raise their earnings estimates and price targets, which would likely force institutional investors to change their view of Arena, thus providing a catalyst for the stock.
    Jul 20 04:41 AM | 2 Likes Like |Link to Comment
  • Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
    It seems there's some confusion as to what the goal of this article was. Nowhere in it is there a recommendation to buy CRM. Nowhere does it say "this is a great stock, let's buy!" The purpose here was to explain a theory, in which institutional investors, led by Fidelity, are propping up the stock, keeping it from trading at where it normally would in an efficient market. In any case, it makes no sense to try and prop up salesforce on Seeking Alpha. No one on this site is bullish on the company, and nearly every article about it outlines some sort of argument as to why the stock should be shorted. If that were the goal, it would make much more sense to plant positive articles in a more "neutral" setting, such as Barron's. This article is not meant to convince readers that shorting the company is bad, or that the stock is a buy. The goal is to explain how market inefficiencies are keeping the stock artificially high. Investors should not become so attached to a thesis that it clouds their judgment. While admittedly this article isn't the typical one where salesforce is attacked as a fraud that has to be shorted immediately, it isn't supposed to be seen as a piece endorsing the stock either. Nowhere does it say that this stock can never fall. Rather, the article tries to show that it will take more than overvaluation or GAAP losses to sink this stock. There has to be a throwing in of the towel by one of the company's major institutional investors for there to be a meaningful long-term drop.

    Over the past 5 days, CRM has lost over 10%, due to both Informatica's sales/EPS warnings, and broader market malaise. Volume, however, at least according to Google/Yahoo! Finance, hasn't soared. Could more losses be in the cards? It's certainly a possibility. One key indicator to watch would be the monthly holdings report for the Fidelity Growth Company Fund. As the largest individual entity to own salesforce stock, the size of its stake could provide insight into what other Fidelity funds (and other institutions) might do with their shares.
    Jul 12 01:24 AM | 2 Likes Like |Link to Comment
  • Buy Nvidia: A Deployment Of Capital Would Be A Catalyst For A Rally [View article]
    We own shares of QCOM as well, and think the company is a good investment. That being said, NVDA has its own good qualities, and we think that both companies have tailwinds that should lead to rising stock prices this year and next.
    Jun 14 02:03 PM | 2 Likes Like |Link to Comment
  • Salesforce.com Has Broken The GAAP Model: Why The Stock Is Unlikely To Fall [View article]
    As we stated in the beginning, we happen to be long the stock because it is owned by a mutual fund we hold; that is something we cannot control. On the earnings call, the word GAAP was not mentioned once. Not a single analyst asked about the discrepancy between the company's rosy outlook and its GAAP losses. Until this becomes an earnings call issue, it is likely that the GAAP losses will not matter to the market movers.
    May 20 02:18 PM | 2 Likes Like |Link to Comment
  • For True Long-Term Value Investors, JPMorgan's Fall Presents A Buying Opportunity [View article]
    Our reason for avoiding a direct investment in JPM stems from our overarching investment philosophy. We invest in companies with clear, secular trends that aren't tied to the state of the economy. The end result of this is a portfolio that is skewed in favor of technology (smartphones, tablets), biotech, some income producing securities, and rarely financials. That is because for the most part, financial companies are extremely linked to the economy, and their performance is tied to macroeconomic conditions. The financials we do own, CME and City National, are rare examples of financials that are able to do well in the face of economic adversity. The more market volatility there is, the more profits CME generates, because volatility leads to volume. The need for investors to hedge risk means drives them to CME. And City National is a plain-vanilla bank that caters to the affluent, and small-businesses, that are screened carefully to meet the bank's strict standards. City National is growing slowly but surely, and navigated the financial crisis without any losses. These two financials pass our "secular" test, whereas JPM does not. Everyone has different investment philosophies. Ours happens to not lend itself well to global banks. But we recognize that not everyone shares that philosophy, and for those who have no qualms in buying a global bank, we feel that this episode presents a good moment to buy into what most people still see as the best global bank.
    May 13 04:58 PM | 2 Likes Like |Link to Comment
  • Investors Need To Stop Obsessing Over Apple [View article]
    it is natural for apple to receive more coverage, both positive and negative, but it is important to remember to discern what matters and what does not. at the end of the day, apple's results are what will drive the long-term price, and it is important not to lose sight of that with each move up or down, and each piece of research/opinion that is released
    Apr 17 03:30 AM | 2 Likes Like |Link to Comment
  • Clearwire: LightSquared, Earnings, And Auctions Confirm The Story Is Intact [View article]
    reading the 10-k is essential here, for it provides a number of unique insights. the inclusion of the phrase substantial additional capital is unnerving to some. we too, wish that the phrase was not there in the 10-k. having said that, we think that this paragraph, taken from the 10-k filing, is the crucial one to note.

    "The amount of additional capital that we will require to fund our business, and the timing of our capital needs depends on a number of factors, many of which are difficult to predict and outside of our control. The primary factor determining the amount of additional capital we require will be the amount of cash we receive from Sprint for our services, beyond their minimum commitment amounts specified in the November 2011 4G MVNO Amendment, which will primarily depend on whether our construction of an LTE network is successful and completed according to the design architecture and deployment requirements we agreed to with Sprint, the extent to which Sprint utilizes that network, and the level of Sprint’s usage of our WiMAX network beyond 2013. Other factors include the amount of cash generated by the wholesale business from new and existing wholesale partners other than Sprint and by our retail business, the actual cost of building the LTE network and the timing of its completion, either of which could vary substantially from our plans, our ability to offer 4G mobile broadband services that are competitive with service offerings from other companies, our ability to maintain reduced operating expenses and capital expenditures, and the accuracy of our other projections of future financial performance."

    we think the renewed deal with sprint guarantees CLWR's funding for at least some time, and the filing notes that the lynchpin of whether or not CLWR needs more capital is whether or not the LTE network can come online fast enough relative to the drop-off in WiMax usage at sprint. a large gap between the two events will result in a hole that will have to be filled with additional capital. CLWR is being conservative in its financing estimates. could it need more capital? certainly. Will it seek new capital? that is something that cannot be accurately answered. we will certainly be watching the wireless spectrum market and CLWR's cash flow numbers to see how capital needs may change
    Feb 21 07:35 PM | 2 Likes Like |Link to Comment
  • Clearwire: LightSquared, Earnings, And Auctions Confirm The Story Is Intact [View article]
    clearwire did begin as a wimax player, but its own network is transitioning to LTE as well, and Sprint does not have the necessary spectrum on its own to sustain growing smartphone usage. the collapse of the lightsquared removes that company's ability to provide sprint with spectrum and forces it closer to clearwire. in addition, clearwire is well positioned to cater to the spectrum needs of the non-AT&T and Verizon companies.

    clearwire is a complex company and there are many moving parts to the story. it is something that we have researched extensively and what we have found looks great to us. this article does not provide a complete picture of the clearwire story. if you would like to learn more, our other articles on clearwire provide more detail.

    http://bit.ly/wGNJUA
    Feb 21 05:15 PM | 2 Likes Like |Link to Comment
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