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Michael Fu  

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  • Zuoan Fashion - Major Changes In Distribution And Retail Network Must Be Brought [View article]
    i bought recently too, due to market cap of $25mm vs. net cash of $150mm. hopefully, the cash is real and not another longtop financial. i see their products on http://www.tmall.com, so at least there's real products they're selling. if the cash is real, hopefully mgmt doesn't keep siphoning it away and either pay more dividends again, stock buyback, or buyout.
    Jun 25, 2015. 02:10 PM | 1 Like Like |Link to Comment
  • Renren receives going-private offer; shares -3.9% [View news story]
    why would Softbank agree to this? what do they gain for selling at a low price point to Chen?
    Jun 23, 2015. 06:26 PM | Likes Like |Link to Comment
  • Privatization Wave: A House Of Cards? [View article]
    RENN offer is $4.20 per ADS
    Jun 11, 2015. 04:46 PM | 1 Like Like |Link to Comment
  • Renren receives going-private offer; shares -3.9% [View news story]
    $4.20 per share looks a bit light, it's probably worth $4.50, just valuing the upside from their SoFi investment. May be more, if there's more upside in their other investments. See details below:

    http://seekingalpha.co...

    http://yhoo.it/1MJTc0z
    Jun 10, 2015. 08:03 PM | Likes Like |Link to Comment
  • Renren: An Indirect Play In Online Lending [View article]
    it's a fair point, i'm not a big fan of the core business as it stands today. there's 2 parts to their core business, the gaming side (45% of 2014 rev) and the social media platform side (55% of 2014 rev). they're cutting development costs on the gaming side (will just distribute 3rd party games going forward, instead of developing their own), so that should help. The social media platform side, both renren and weibo (ticker WB) has been losing users to tencent's wechat app for years, renn has lost that battle already (just like they lost the online video battle with their 56.com investment that they acquired for $80mm in 2011 but sold to Sohu.com in 2014 for $13mm).

    the only upside i see of RENN keeping that social media platform alive, is that all these investments in the U.S. (ie: online student loan lending, online mortgage lending), they plan on eventually offering /replicating those services in China through their existing platform. if they did that and it was successful, that would be pretty exciting and provide upside to their core business for a change, instead of investors currently only valuing them for their cash and other investments, and no to negative value assigned to their core business.
    May 11, 2015. 03:24 PM | Likes Like |Link to Comment
  • Notable tech gainers: WILN, RENN, VDSI, MITK, ECOM [View news story]
    Here's why RENN is up!

    http://seekingalpha.co...
    Apr 23, 2015. 08:52 PM | Likes Like |Link to Comment
  • Renren: An Indirect Play In Online Lending [View article]
    yes, their core business is not great, as mentioned in the article. current stock price reflects that, with a market cap of $900mm, which is about the value of their $700mm cash and $300mm book value of investments. so no value essentially given to their actual business.

    i'm making the argument that their $300mm BOOK value of investments (including SoFi), may be significantly below the MARKET value of those investments. And specifically for SoFi, their recent round at $1.3 billion in Feb 2015, would imply RENN's 50mm book value stake (25% of company) is really worth +$300mm. Just that SoFi data alone would mean another 30% upside to current stock price (and more like 100% upside if IPO is say $3.5bn range).

    And the market value of their other investments (besides SoFi, like Motif or YikYak) may be significantly higher than their book value as well.
    Apr 10, 2015. 03:13 PM | 1 Like Like |Link to Comment
  • Renren: An Indirect Play In Online Lending [View article]
    they did just announce a $50mm dutch tender offer today, so that should signal mgmt thinks their current stock prices are a deal. also in Q414, they bought back $28.9mm worth at $3.10 per share.

    even without mgmt buyout, i think if social finance goes public, it will be transparent RENN is a significant investor and the market will hopefully assign proper value to RENN's stock, similar to Yahoo and Alibaba.
    Apr 2, 2015. 12:42 PM | 1 Like Like |Link to Comment
  • Lending Club: What Did Investors Expect? [View article]
    Has anyone looked into Social Finance, a similar online lending platform as Lending Club but focused on student loans? It's private for now, recent Series D round done at $1.3bn and potential IPO later this year at discussions of $3.5bn. RenRen (RENN) which is publicly traded, owns 27% of SoFi recorded at cost for now on RENN's balance sheet (they got in at Series B round at a $200mm valuation), so you can play SoFi exposure indirectly through RENN. See recently written article for details:

    http://seekingalpha.co...
    Mar 31, 2015. 08:53 PM | Likes Like |Link to Comment
  • Yelp: Invest In A Startup Without Venture Capital Fees [View article]
    there's competition (or lack of barriers to entry) in every industry. but i think market leadership, content quality/quantity, and network effect has stickiness. Google tried to enter into Facebook's social media space with Google+, people freaked out for Facebook, but FB still dominates.

    The Google Local integration with Google Map is powerful (b/c Google Maps is leader in direction space), but Yelp's integrated with Apple Maps. Pick any restaurant and read the reviews from Yelp and Google, Yelp has way more reviews (like thousands vs. a dozen) along with more food pics. I personally use Yelp to find restaurant recommendation, then switch to Google for directions. Users are sophisticated enough to switch to the best service for source (Yelp for content and Google for directions).

    Yes Google Local has potential, but takes a lot of investments to convert customers to your competing site to post reviews. Probably easier for them (or someone like Yahoo) to just buy Yelp, it would be viewed as content and customer acquisition costs. Priceline purchased OpenTable at 10x forward revenue in June 2014, which would imply about a 20% premium to Yelp's current stock price.

    http://yhoo.it/1u24ypR
    Nov 10, 2014. 12:50 PM | 1 Like Like |Link to Comment
  • Yelp: Invest In A Startup Without Venture Capital Fees [View article]
    you're right, they're not a start up. They're already profitable and have a proven platform/proof of concept. 40-50% sales growth on $400mm of sales is not bad though and probably better than most start-ups that don't generate any sales, burn thru cash from recent financing rounds in 12 months, and at best have some eyeballs that they hope to pitch as a "milestone" for the next lifeline VC funding.
    Nov 7, 2014. 04:48 PM | 1 Like Like |Link to Comment
  • The Cheesecake Factory Is Padding Profits With New International Licensing Deals [View article]
    YUM is actually more like $1mm per store per year. MCD is more like $2mm.
    May 22, 2014. 04:57 PM | Likes Like |Link to Comment
  • The Cheesecake Factory Is Padding Profits With New International Licensing Deals [View article]
    YUM and CAKE are two different concepts, two diff price points. YUM is fast food, ave check is $5 USD / customer, CAKE is sit-down, ave check $20 / customer. YUM ave store sales is prob $2mm / store / year, CAKE is $10mm. Also, it's a minimum store commitment. When Maxim did Starbucks in HK, they had some minimum # of stores, and ended up opening 130 stores in 10 years. Prob won't be that high for CAKE obviously, but I can seem them surpassing 14 (maybe 30, which again at $10mm per store sales, that's $300mm, on current $2bn sales, is 15% from HK/China). It really boils down to whether CAKE's concept will be loved in HK (if the 1st store succeeds). If so, plenty additional store openings will follow.
    May 22, 2014. 04:55 PM | Likes Like |Link to Comment
  • Tesla Needs To Capture 14% U.S. Market Share To Justify Valuation [View article]
    Carfan 79, can you share the link to where TSLA's mgmt states their goal of 700,000 by 2019?

    fair P/E multiple is applied to FUTURE earnings growth potential, not historical earnings growth. 25x in 6 years would imply that the markets would continue to believe growth will be ~15-20% beyond 2019. so you're 700,000 units in 2019, becomes 840,000 in 2020, and 1mm in 2021.

    the overall auto industry (the overall pie) does not grow by 60% or 20%. prob more like 5% over long run, and is cyclical depending on car replacement cycles (like 7 yrs), economy/confidence (car upgrade is discretionary spending), population growth/household formations, etc. So TSLA bulls are also betting that GM/F/HMC/TM are going to have declining sales growth (their slice of pie get smaller, as TSLA gets bigger).

    The $30bn of TSLA market cap creation in past few years, should have lead to decline of $30bn in other auto manufacturers then. can't have bulls in TSLA and bulls in current auto leaders both be correct, the pie's only so big. if you're really bullish on TSLA, go short existing auto manufacturers.
    Apr 4, 2014. 01:31 PM | Likes Like |Link to Comment
  • Tesla Needs To Capture 14% U.S. Market Share To Justify Valuation [View article]
    Pete, thanks for at least throwing some numbers out there on the bull case, instead of just qualitative: you don't understand, it's different this time, new technology, creative destruction (sounds like 1999 internet days).

    let's assume they do get to $30bn of sales in 10 years, by selling 500,000 cars x $60K per car. let's further assume they do get to 15% net margins, or +3x higher compared to 5% or less for GM/F/HMC. So that gets you to $4.5bn NI. All the growth potential would have been realized by time they get to $30bn sales, so let's apply a fair 15x P/E on the $4.5bn NI = $68 bn market cap in 10 years.

    the key question now is what discount rate/risk do you apply to the $68bn in 10 years, to come up with what it should be worth today.

    If you think owning TSLA is same risk as owning a bond, then apply a 5% discount rate and you get market cap today is $42bn.

    If you think owning TSLA is same risk as other more volatile/big momentum/game changer type stocks, then apply say a 20% discount rate and you get a market cap today of $10bn.

    maybe it boils down to that with bulls and bears of TSLA. i'm obviously on the higher risk side is correct discount rate to apply, for fair value of what they're worth today. i like TSLA, they have awesome products, they have disrupted the auto industry, they have created value. I just think the fair price for that value in today's term, is probably closer to $10bn than $30-40bn.

    good luck all.
    Apr 3, 2014. 09:42 PM | Likes Like |Link to Comment
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