Gaiam Is Missing Its Own Solar-Powered Rally [View article]
Additional update:
RSOL has now announced that they are raising about $8-$9 million by issuing shares in a private placement at $2.75/ share.
Taking the above $3.05/ share as the baseline for Gaim's consolidated businesses, and valuing RSOL at $2.75/share, gives GAIA a sum-of-the parts valuation of ~$4.26/share.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
GAIA was actually up this morning while RSOL was down. The decline came in the afternoon after I posted the update telling people the pricing discrepancy had converged.
So what that tells me is that I'm moving the market much more than I'd like to, which is not my intention.
Dear market: stop listening to me. Seriously.
I don't want anybody to buy or sell because I say so; I want you to check the prices and buy or sell because logic.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
What is your basis for saying the price is "fake"?
Just that you don't personally agree with it? People told me Roundy's and Barnes and Noble were in a liquidity crisis too.
That turned out well.
As I stated in the article, I was lucky enough to hold shares of RSOL before the spike (which I didn't see coming) and sold them during the spike (because I wasn't sure why it was happening). At the quoted, REAL prices.
RSOL is not a fake company, and I do not believe they are incapable of justifying the current valuation. Even after the run-up, the price-to-sales ratio is only 1.61, and I believe the company has multiple growth catalysts assuming they can refinance. Which, given current debt market conditions and newfound enthusiasm about solar I'm pretty sure they can.
I'm not discounting the possibility of a bankruptcy; but I don't believe you should discount the possibility of solvency, either.
It's just that the market offered an opportunity for quick thinkers to rotate into the same long-term position at a discount through GAIA.
Let's put it this way: I cannot think of any reason for someone who owned RSOL, or who was planning to buy RSOL, would NOT be better off buying GAIA instead when there is a significant price divergence.
Thus, arbitrage exists and the prices of the two equities must trade in tandem.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
If RSOL falls (as it has already begun to) then GAIA should fall as well. If you feel that is a near certainty then you could make money shorting either.
But short term, the market must price the two in tandem. If it does not then it is an arbitrage opportunity for the small number of people lucky enough to be able to short RSOL.
Nook Media Gets How To Play The Gorilla Game [View article]
Good call!
Barnes and Noble is a lot of fun to trade because it is both impossible to value and absurdly easy to value at the same time.
Impossible to value because the underlying business offers more questions than answers. Easy to value because so many big players (Riggio, Burkle, Ackman, Tilson, and Microsoft) have publicly slapped a price tag on it and put their money behind it.
Nook Media Gets How To Play The Gorilla Game [View article]
I think it's just another example of illogical Amazon love.
He has the basic roadmap correct- Nook (under Microsoft or not) will make tablets and ereaders for another couple of years while there is synergy in that market, with a long term focus on integrating as a default digital media distributor for all devices.
But Barnes and Noble has flat out told us this since day one. It's not a surprise that they aren't planning on making any particular hardware forever. A long time- but not forever.
It's also what Amazon has been trying to do, too! The fact that Nook is closer to the next evolutionary phase is potentially fatal, not good news.
As for Apple- long term, there are no "ecosystems". They need to invent something new again.
Microsoft Chooses The Nook-Ular Option [View article]
I think Microsoft is after the Nook App store. There are just over 10,000 apps in the Nook store (and many more have been submitted and are awaiting review), all of Windows RT only has 70,000 or so.
If Microsoft can create an android emulator for RT tablets they can substantially increase the number of applications in the RT store, while undercutting Google's margins.
Barnes & Noble And Google: New Edge Or Trojan Horse? [View article]
Nice article, Renee. Too bad it was delayed.
You're absolutely correct that Nook owners will now buy some books from Amazon, but I think that is exactly what Barnes and Noble wants them to do.
When Amazon sells ebooks cheaper than Barnes and Noble, they are typically doing so at a loss or for no profit. This made since when Kindle books locked you in to Kindle hardware, but now it is somewhat pointless. Barnes and Noble gets the hardware sale and the PROFITABLE book sales, Amazon shoots themselves in the foot.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
RSOL has now announced that they are raising about $8-$9 million by issuing shares in a private placement at $2.75/ share.
Taking the above $3.05/ share as the baseline for Gaim's consolidated businesses, and valuing RSOL at $2.75/share, gives GAIA a sum-of-the parts valuation of ~$4.26/share.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
GAIA does indeed appear both well diversified and cheap.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
So what that tells me is that I'm moving the market much more than I'd like to, which is not my intention.
Dear market: stop listening to me. Seriously.
I don't want anybody to buy or sell because I say so; I want you to check the prices and buy or sell because logic.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
Just that you don't personally agree with it? People told me Roundy's and Barnes and Noble were in a liquidity crisis too.
That turned out well.
As I stated in the article, I was lucky enough to hold shares of RSOL before the spike (which I didn't see coming) and sold them during the spike (because I wasn't sure why it was happening). At the quoted, REAL prices.
RSOL is not a fake company, and I do not believe they are incapable of justifying the current valuation. Even after the run-up, the price-to-sales ratio is only 1.61, and I believe the company has multiple growth catalysts assuming they can refinance. Which, given current debt market conditions and newfound enthusiasm about solar I'm pretty sure they can.
I'm not discounting the possibility of a bankruptcy; but I don't believe you should discount the possibility of solvency, either.
It's just that the market offered an opportunity for quick thinkers to rotate into the same long-term position at a discount through GAIA.
Let's put it this way: I cannot think of any reason for someone who owned RSOL, or who was planning to buy RSOL, would NOT be better off buying GAIA instead when there is a significant price divergence.
Thus, arbitrage exists and the prices of the two equities must trade in tandem.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
Based on current market prices It appears that RSOL and GAIA have already converged.
But be on the lookout for further divergences that may develop in either direction.
Gaiam Is Missing Its Own Solar-Powered Rally [View article]
But short term, the market must price the two in tandem. If it does not then it is an arbitrage opportunity for the small number of people lucky enough to be able to short RSOL.
Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
Nook Media Gets How To Play The Gorilla Game [View article]
Barnes and Noble is a lot of fun to trade because it is both impossible to value and absurdly easy to value at the same time.
Impossible to value because the underlying business offers more questions than answers. Easy to value because so many big players (Riggio, Burkle, Ackman, Tilson, and Microsoft) have publicly slapped a price tag on it and put their money behind it.
Nook Media Gets How To Play The Gorilla Game [View article]
He has the basic roadmap correct- Nook (under Microsoft or not) will make tablets and ereaders for another couple of years while there is synergy in that market, with a long term focus on integrating as a default digital media distributor for all devices.
But Barnes and Noble has flat out told us this since day one. It's not a surprise that they aren't planning on making any particular hardware forever. A long time- but not forever.
It's also what Amazon has been trying to do, too! The fact that Nook is closer to the next evolutionary phase is potentially fatal, not good news.
As for Apple- long term, there are no "ecosystems". They need to invent something new again.
Microsoft Chooses The Nook-Ular Option [View article]
If Microsoft can create an android emulator for RT tablets they can substantially increase the number of applications in the RT store, while undercutting Google's margins.
Nook Media Gets How To Play The Gorilla Game [View article]
Thanks for the catch!
Nook Media Gets How To Play The Gorilla Game [View article]
Buy my book! It's for kids!
http://bit.ly/17OHH3D
Barnes & Noble And Google: New Edge Or Trojan Horse? [View article]
You're absolutely correct that Nook owners will now buy some books from Amazon, but I think that is exactly what Barnes and Noble wants them to do.
When Amazon sells ebooks cheaper than Barnes and Noble, they are typically doing so at a loss or for no profit. This made since when Kindle books locked you in to Kindle hardware, but now it is somewhat pointless. Barnes and Noble gets the hardware sale and the PROFITABLE book sales, Amazon shoots themselves in the foot.