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  • Another Astute Deal For Depomed [View article]
    Hi Jason,

    Thanks for the thorough analysis, before this transaction DEPO was not on my radar.

    As a PDLI shareholder however I have been keeping a close eye on their recent transactions, and have been waiting for a much larger deal such as this to get a handle on their business plan going forward after much of their existing patent portfolio winds down in a couple of years.

    I am just getting my teeth into analyzing what this means for PDLIs valuation, but from a macro level it looks good, and management always seems to do their homework.

    I was curious if you have any thoughts of this deal from a PDL perspective?

    The Glumetza cash flow will be key early on, but at a first look it will be the success of the the other drugs that really determine the long term return on this deal. Do you have a view on any of these products?

    Any additional insight would be appreciated, thanks.
    Oct 22, 2013. 04:12 PM | Likes Like |Link to Comment
  • Why PDL BioPharma Doesn't Look A Promising Long Buy [View article]
    It looks like the author got a little unlucky as I would think the article was submitted before the big announcement after the close yesterday. (I've had this happen to myself also)

    The Depomed deal is certainly a game changer and clearly cements the path the company will be taking going forward, basically a Biotech PE firm.

    A couple of other noteworthy facts:

    1) PDL will likely continue collecting royalties on the Queen et al patents into early 2016, even possibly longer for the new drugs as production times are long and 12-24 months of inventory is usually on hand. This is unpredictable at this point, but the cash flow will not just turn off.

    2) The ongoing court battle with Roche could result in a billion dollar decision for PDL, which would double its market cap.

    The settlement could also be zero, but the facts appear to favor PDL, and certainly some value needs to be attached to a potential outcome.

    The fact the PDL will clearly be continuing as a going concern will possibly encourage Genentech/Roche to settle as opposed to keep dragging the proceedings out.
    Oct 22, 2013. 01:13 PM | 3 Likes Like |Link to Comment
  • American Capital Agency: Off To The Races? [View article]
    Hi Dividend Living,

    The DTCC GCF Repo Index for MBS last week hit 0.248 which is not very high by historical standards, but is moving off a recent low of 0.025. As you can see in the links below, current rates are still lower than earlier in the year as you pointed out.

    http://on.wsj.com/H8i7y3
    http://bit.ly/Rkqabw

    What is not normal however is the recent move in percentage terms, a 10x move!

    This certainly caused problems for short term hedging and pricing models and it is likely that some traders got caught offside on the move, as is always the case with such drastic shifts.

    Whether or not this impacted AGNC, I have no idea. They have some smart guys and maybe even made some money on this, but it is also possible they took a hit.
    Oct 18, 2013. 01:37 PM | 1 Like Like |Link to Comment
  • American Capital Agency: Off To The Races? [View article]
    While I agree that the move down in longer term rates is likely to positively impact the value of AGNC's MBS portfolio, the recent volatility in the short term REPO markets likely cut into profits on the funding side of the equation.

    The political stand off in Washington has wrecked havoc in short term funding markets in recent weeks. The impact was felt the mostly in T-Bill and other money markets instruments, but other debt sectors were not left unscathed.

    Like all mREIT's, AGNC's business model is dependent on the REPO market to fund portfolio purchases, and generate leverage. While AGNC has a sophisticated hedging strategy in place, volatility always makes borrowing more expensive, thus cutting into profits.

    We won't know the impact of this chaos in the funding markets until earnings are released, and it may not end up being significant, but it could also impact earnings if proper hedges were not in place. REPO rates certainly have been higher in the past, but recently spiked off very low levels.

    Also worth taking into account is that Washington will be back to front and center early in the new year, and is likely that another round of political wrangling will once again bring volatility and thus increase mREITs cost of doing business.
    Oct 18, 2013. 12:23 PM | 2 Likes Like |Link to Comment
  • Get Long. Get Short. BlackBerry's Value Ain't $8 [View article]
    I was admittedly a big fan of the management changes that took place at BlackBerry over the last 18 months or so and firmly believed Mr. Heins and the team he assembled would put the company back on track.

    I even wrote as such back in April:
    http://seekingalpha.co...

    Considering recent developments, nicely outlined by the author here, in addition to the very poor marketing of BB10 and several other controllable setbacks, it appears my faith was perhaps misplaced.

    I guess we will have to wait and see how events unfold, but the details of the relationship between Mr Heins, Mr Watsa, and the rest of BlackBerry board vis-a-vis this bid have very poor optics.
    Sep 29, 2013. 12:40 PM | 7 Likes Like |Link to Comment
  • Shareholder Inequality: Fairfax's Other Motivations In Its Bid For BlackBerry [View article]
    I have to agree that this bid is somewhat curious in terms of both the vague structure/financing as well as the timing. Fairfax has clearly positioned itself nicely for various scenarios as the author outlines, notably a short term floor on the price of BBRY.

    The one things I would add however, is that Prem Watsa also has some serious credibility risk for both himself and Fairfax. If it comes to light that this is a bad faith proposal, there would consequences.

    For this reason I think we may have to wait a little longer to see how this unfolds, as there may be more cards left to play.
    Sep 26, 2013. 07:32 PM | 1 Like Like |Link to Comment
  • BlackBerry: The Bear Case, The Bull Case And My Case [View article]
    It is true actually, it just depends on how many days you are using to calculate average volume. There is more than one answer to be fair.

    For average volume, much like average volatility, you can use 30, 60, 90, 180 days, or whatever you feel will provide the most useful metric for the question you are trying to answer.

    In this case for a stock that has had as little as 10m and as many as 225m shares trade in a day YTD, thus making average volume, and the short ratio very volatile, I feel a longer period is more representative.

    Using the the 30 day average volume you are correct that the short ratio is around 10 days. Using 90 days of volume, the days to cover is closer to 5.

    I would expect anyone with a sizable short position in BBRY is looking at days to cover in multiple time frames.
    Jun 27, 2013. 03:01 PM | 1 Like Like |Link to Comment
  • BlackBerry: The Bear Case, The Bull Case And My Case [View article]
    While the percentage of the float that has been shorted is very high for BlackBerry, the short ratio, or days to cover, is much more manageable at 5 days.

    Because BBRY is such a liquid stock, any sophisticated short can work out of the position reasonably quickly (barring an immediate spike).

    To put this in perspective relative to some other Tech names, days to cover for BBRY is the same as INTC at 5 days, about a day and half less than NOK, and only one day more than IBM.

    That having been said, I have a hard time seeing the risk reward in being short in front of earnings.
    Jun 27, 2013. 02:06 PM | 2 Likes Like |Link to Comment
  • BlackBerry: Discussion Of 4 Major Topics Prior To Q1 Earnings [View article]
    Margin composition will be a crucial metric to watch going forward. While the higher hardware gross margin will help mitigate declining service revenue from existing users, the two income streams certainly have different risk profiles.

    That having been said, the success of licensing BES 10 for corporations using iOS and Android devices could potentially be a significant new revenue stream. Far too early to tell at this point though, IMHO.
    Jun 27, 2013. 09:48 AM | 1 Like Like |Link to Comment
  • BlackBerry CEO Thorsten Heins Keeps His Word [View article]
    I fully agree that Thorsten Heins has done a remarkable job in a relatively short period of time, and he is one of the key factors to have confidence in BlackBerry going forward.

    It is not just Heins however that deserves credit for getting the company back on track, but his entirely revamped management team, which I outlined a couple of months back.

    http://seekingalpha.co...

    Heins has instilled a new vision and direction for his team, and the fact that the company been consistently meeting deadlines again, shows his plan is coming to fruition.
    Jun 27, 2013. 08:54 AM | 3 Likes Like |Link to Comment
  • Early signs from the U.K. Q10 launch are "very very good" and BlackBerry (BBRY +3.1%) foresees "several tens of millions" in Q10 sales altogether, says Thorsten Heins in a Bloomberg TV appearance (video). Given BlackBerry's own sales figures as well as 3rd-party forecasts, he might be getting ahead of himself. Meanwhile, RBC has raised its May quarter BB10 shipment forecast to 2.75M from 2M, citing signs of "pent-up demand" for the Q10. (Jefferies report[View news story]
    I agree that BlackBerry management gets very little credit from the market. I actually wrote an article about it a few weeks ago:

    http://bit.ly/14JgXU6

    It is an entirely new team in Waterloo, and they have completely turned the company around in a short period of time through cost cutting and a refocused strategic planning. RIM really was on the brink not that long ago.

    The focus on mobile computing as opposed to handset sales will likely payoff in the long run. Several quotes I read from Heins suggest to me that he is looking much further ahead than the BB10 launch and will be looking to business areas that are more sustainable.

    The smartphone market is getting more competitive on a daily basis and accelerating margin compression is inevitable. I would expect that in a few years BlackBerry may no longer even be in the hardware business.
    Apr 29, 2013. 03:41 PM | 4 Likes Like |Link to Comment
  • Early signs from the U.K. Q10 launch are "very very good" and BlackBerry (BBRY +3.1%) foresees "several tens of millions" in Q10 sales altogether, says Thorsten Heins in a Bloomberg TV appearance (video). Given BlackBerry's own sales figures as well as 3rd-party forecasts, he might be getting ahead of himself. Meanwhile, RBC has raised its May quarter BB10 shipment forecast to 2.75M from 2M, citing signs of "pent-up demand" for the Q10. (Jefferies report[View news story]
    Yes the timing of these reports has been very convenient, with the bearish analyst quotes than quickly getting recycled through various media outlets.

    It will be surprising if the SEC actually punishes anyone based on the complaint filled by BBRY, but one can be hopeful.
    Apr 29, 2013. 03:30 PM | 3 Likes Like |Link to Comment
  • Early signs from the U.K. Q10 launch are "very very good" and BlackBerry (BBRY +3.1%) foresees "several tens of millions" in Q10 sales altogether, says Thorsten Heins in a Bloomberg TV appearance (video). Given BlackBerry's own sales figures as well as 3rd-party forecasts, he might be getting ahead of himself. Meanwhile, RBC has raised its May quarter BB10 shipment forecast to 2.75M from 2M, citing signs of "pent-up demand" for the Q10. (Jefferies report[View news story]
    It is nice to get some positive reports on the Q10 after the very pessimistic, although perhaps dubious, reports that emerged last week on the Z10.

    According to Michael Collins, Q10 sales do appear brisk at least one retailer in the UK.

    http://bit.ly/18fMSbg

    It will be interesting to see if any legal action emerges from the many questionable reports that have emerged regarding BBRY since the launch of BB10.
    Apr 29, 2013. 02:31 PM | 3 Likes Like |Link to Comment
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