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Liqddynamite

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  • Why Netflix Could Be Bankrupt Within A Year [View article]
    I sold them a long time ago for a 300%+ gain, thanks for checking back. This thing was obviously ready to rocket up once it exploded out of the $60 range, I haven't been short NFLX in quite a while.
    Jan 25 10:45 AM | Likes Like |Link to Comment
  • Green Mountain, Is A Merger Brewing? [View article]
    "The allegations about accounting irregularities come form a convicted felon who has very little credibility where I sit. Auditors and the SEC get really sensitive these days and these guys have a professional board and a strong audit committee."

    First off, the SEC wanted to see restatements. Then, David Einhorn, one of the most thorough and accomplished short selllers out there who does more research and more accounting analysis on his shorts than just about anyone, elevated the attention. If you doubt Einhorn's level of research, go read his book about his short on Allied Capital. So saying the accounting argument lacks credibility is questionable at best, in my opinion at least.

    Personally I think this is $3 stock in a couple years, but that's what makes a market. GL to all, long or short.
    Jul 26 04:16 PM | Likes Like |Link to Comment
  • Green Mountain, Is A Merger Brewing? [View article]
    That was my reading of it as well, thanks for the insight alibabba.
    Jul 26 12:04 PM | Likes Like |Link to Comment
  • Green Mountain, Is A Merger Brewing? [View article]
    Getting back to the point, why would Starbucks buy GMCR and inherit all their accounting problems, when they can just license the VUE k-cups that do still have patent protection? Or they can continue to license the existing ones if they want to. How does that make a takevoer sensible? Being a licensee, Starbucks can continue to make money w/out the headache of taking over a company with a lot of assets, infrastructure, and accounting problems that they don't need.
    Jul 26 11:29 AM | 1 Like Like |Link to Comment
  • Green Mountain, Is A Merger Brewing? [View article]
    Yes, and they are only doing that through GMCR because thats their only option until patent expiration. Furthermore, that equals margin erosion for GMCR, since they make less on a Starbucks k-cup than they do on their own.

    Once that patent is over, why would starbucks renew a licensing agreement instead of doing it themselves?
    Jul 26 11:05 AM | 1 Like Like |Link to Comment
  • Green Mountain, Is A Merger Brewing? [View article]
    I don't really think you can fairly cite yoy sales growth when GMCR has had a monopoly until now. Starting in September 2012 with the k-cup patent expiration, its nearly guaranteed that the sales growth will fall as cheap competition starts to flood this market. On top of that, shrugging off accounting irregularities is a huge gamble at best, especially if you've read and understand Einhorn's short thesis, that that accounting problems are endemic in this company.

    Also, you don't really explain why a Starbucks takeout "makes a lot of sense." I think it makes very little sense. Without intellectual property protection, its hard to see where the value is with GMCR. Starbucks is already gearing up to sell their own single-serve machine, all they have to do next is take their coffee and put it in a little plastic cup and sell 12 packs of it in their tens of thousands of stores, as well as supermarkets, etc.
    Jul 26 10:30 AM | 1 Like Like |Link to Comment
  • Why You Should Be Bearish On Whole Foods Market [View article]
    Nice article. In addition to the challenging picture right now, and that both retail and food stocks alike are getting hit on earnings right now, the chart setup is not good here, major trendlines having broken recently.
    Jul 24 08:51 PM | Likes Like |Link to Comment
  • Whole Foods: Love The Brand, Hate The Valuation (In This Market) [View article]
    After seeing both retail and the food companies get hit this earnings season, its hard to see how WFM doesn't compress. Combine that with what looks like a very bearish chart setup with a couple closes below long-run trendlines, and I think its set for a potentially big fall.
    Jul 24 08:43 PM | Likes Like |Link to Comment
  • Buy Green Mountain And Forget About Starbucks, Dunkin' [View article]
    The problem, in my opinion, of talking about a takeover of GMCR based on the valuation, is that no one trusts their numbers, so no one knows what the valuation really is. Their accounting problems haven't been resolved and any buyer could be inheriting legal problems from plenty of different parties. Its like RIMM, people have been screaming that its been undervalued since $20, when the PE was about 4.5. Well the stock is now a 6-handle and the PE is higher than that, there's no reason that can't happen with GMCR, which can either get crushed from slipping sales or from disastrous accounting problems.

    Also, Starbucks and Dunkin already have massive distribution networks, what do they need GMCR's for? Them, and countless other big-time coffee brands can manufacture their own k-cups and channel them through their existing network. Unless I'm missing something there, which is always possible, I just don't understand what the value in GMCR would be.
    Jul 23 08:02 PM | Likes Like |Link to Comment
  • Buy Green Mountain And Forget About Starbucks, Dunkin' [View article]
    You blame the GMCR fall from $48 to $25 on Einhorn's short thesis. However, this drop happened on 5/16/2012. Einhorn laid out his thesis last October, when GMCR was at $88/share. The drop from $49 to $25 happened on last quarter's disastrous earnings report.

    I also truly don't understand how anyone who's read that thesis would want to be long GMCR, even at $17.
    Jul 23 01:15 PM | Likes Like |Link to Comment
  • Lululemon Is A Strong Buy At Current Levels [View article]
    In addition to David's arguments, the chart setup for LULU right here is awesome. Its bouncing off of long-run support and there's a gap that should fill above @ $70, for a $12 gain minimum.
    Jul 19 10:44 AM | Likes Like |Link to Comment
  • Profit From Netflix's Cyclical Price Movement [View article]
    LetstParty - I don't know if you are aware of the following 2 issues or not, but you should be, because it sounds like you are long this thing for more than a short-term trade:

    1 - The off-balance sheet content obligations. Page 13 of the last quarterly report: http://bit.ly/NrJpzN

    These are the obligations for the streaming content deals, totaling $3.64 billion. That exceeds not only total liabilities, but it also exceeds total liabilities + stockholders equity. This is a very big deal, and its a big part of the bear thesis on this company.

    2. The cash flow statement. Do some research and when and why Netflix added this line to the cash flow statement: Change in streaming content liabilities (page 6, cash flow statement). This number was not there a year ago, and notice that it is solely responsible for the bottom line of the cash flow statement being positive. Change in streaming content liabilities = $397 million. Total cash and cash equivalents (bottom line) = $395 million. Much has been written on Seeking Alpha about this entry, I'd recommend reading about it, because its extremely questionable whether or not this is a cash related item, and it has a dramatic impact on the cash flow statement.
    Jul 16 03:14 PM | 1 Like Like |Link to Comment
  • Profit From Netflix's Cyclical Price Movement [View article]
    Frank - The reason you see the assets growing is because Netflix counts the streaming content licensing agreements as assets. So when they spend a billion on a new deal, they add some of that to current assets and the rest to intangible assets.

    Of course, calling these things assets is pretty generous. They are indeed intangible, and its not like they can sell a licensing agreement. Really they are just expenses necessary for operation of the streaming unit.

    The very simple long-run problem netflix has is that the cost of content is constantly rising and will continue to do so, but they have run out of people in the US (international markets are a very long way from profitability) to sell to, so they have exhausted their growth. Its not a sustainable situation.

    As far as shorting goes, I don't like the technical setup for a short right here. There's a big gap in the chart from last quarter's earnings, gaps in charts are filled 90% of the time, and in this case that would take netflix back to $100. $100 is also the 61.8 fibonacci retracement of the $125 to $62 fall between April and June. For those unfamiliar, that's a very typical retracement and reversal point. So technically, its very probable it gets to $100 in the near future, it could be a runup into earnings, or it might take the earnings report to get it there. I'll be shorting aggressively at $100, and not until then or very close to it.
    Jul 14 12:22 PM | 1 Like Like |Link to Comment
  • Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
    What about the fact that Starbucks is going to make their own k-cup machine? Once the patent is up, there will be plenty of k-cup machine manufacturers. And besides, GMCR doesn't make any money on the machines anyway.

    I think price is the ultimate issue here. Generic k-cups are going to cost 20 cents a year from now, and no one is going to pay 50 cents like they are paying now. Where's the moat? How does GMCR avoid a price war with Kroger, Wal-Mart, and Costco? And that's ignoring the accounting irregularities.
    Jul 8 08:10 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
    Why?
    Jul 7 10:47 AM | Likes Like |Link to Comment
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