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Simon Vielma

 
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  • Investors Should Short hhgregg [View article]
    Shorting hhgregg is a very stupid idea. 63% of the company is owned by insiders leaving only 13 million shares in the open float. Of the 13 million share float, over 6 million shares are already short which represents 40% of the float. For a tiny company like hhgregg which can be swallowed anytime by a bigger company, privatized, or easily become the target of an activist investor, being short the shares is a suicide mission. Not only that, but valuation does not support such a huge short interest. P/E of 12, Price to Book 0.9, and 10% of the market cap in cash with no debt.

    One little piece of good news and you'll see shorts running for cover.
    Jan 29 10:15 AM | 1 Like Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    Yes, they kept the "official rate" the same for food and medicines, and announced they will create a new regulatory body for currency auctions. My guess is that at those auctions the rate will increase to 20 - 30 bsf / dollar .
    Jan 16 03:17 PM | 2 Likes Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    They announced that they will keep the official exchange rate at 6.3 for "essential goods", but will create a new entity that will provide for currency auctions (which is another way of devaluing without making it sound bad) The dollar in the black market jumped 9% more from 68 to 74. I am curious about what your thoughts are on the new presidential decree that will limit corporate profits to 15% - 30% http://bit.ly/1d9kPf5
    Jan 16 06:33 AM | Likes Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    UPDATE: More disastrous economic measures were announced today. The government announced a new law that will limit corporate profits to under 30% http://bit.ly/1gNDAJn. They kept the official exchange rate at 6.3, but only for food imports and other necessities which is kind of ridiculous because most companies have not gotten a single dollar at that rate. No wonder the black market rate jumped another 9% on the announcement from 68 to 74 http://dolartoday.com
    Jan 15 10:04 PM | Likes Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    I have a pretty good source. The congressional address starts today at 3:00 PM so you still have time to get out of the stock IMHO. Call me crazy but this could even bring down the market with oil going up and several U.S-traded companies going down. We are talking about BILLIONS of dollars in losses for companies here.
    Jan 15 09:48 AM | 2 Likes Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    Yaron, the reason I found it humorous is because we own some commercial real estate in Venezuela, and we leased it back in 2011 when the official exchange rate was 4.3 Bolivares per Dollar and the black market rate was 8. Every month we would convert the rent to USD at black market rate because no one except bureaucrats get dollars at official rate. Long story short, what used to be a lease for several thousand dollars of income is now several hundred dollars with a black market rate going to 68. it was an 85% haircut to our rent income in dollar terms. In addition, we are now afraid that we might just lose the property because the new real estate laws don't allow you to evict non-paying tenants or raise the rent. People have no idea how bad things are over there.
    Jan 15 09:44 AM | 1 Like Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    I just read your article. I found this part funny:

    "Mr. Arnt also elaborated on the company's plan to buy real estate in Venezuela as a hedge against currency devaluation, and then rent the property out for income generation. Yes, that's really the plan. Here we have an ec-ommerce company trying to replicate and compete with Ebay and Amazon (AMZN), yet somehow was led to believe that buying Real Estate with currency that's being actively devalued, in the very same country that's devaluing it, is somehow going to hedge the currency risk. I'm not sure I really need to explain why this is a ridiculous plan"
    Jan 14 06:53 PM | 1 Like Like |Link to Comment
  • Venezuela To Devalue Its Currency Again, MercadoLibre's Financials Will Get Hit Hard [View article]
    There will be an announcement tomorrow so it is not dated. an exchange rate at 11 it's still laughably too low. http://dolartoday.com
    Jan 14 03:02 PM | 1 Like Like |Link to Comment
  • Even Elon Musk Thinks Tesla Stock Is Overpriced [View article]
    Lots of amateur investors justify their irrational exhuberance of investing in Tesla by pointing to other high-priced stocks in the market such as Linkedin, and Facebook, even by comparing it to Google in its early days, but those are profitable businesses, with huge competitive moats in non-capital intensive industries. Tesla not only has formidable better capitalized competitors, but they lose money on an operating basis despite all of the accounting wizardry they have managed to pull off.

    I also noticed that Musk was a bit bothered by the question on Tesla's valuation. He also mentioned he is often tired. I don't blame him. The pressure on him must be huge. He more than anyone knows that Tesla stock will CRASH if these outlandish projections of creating new factories and new models and selling hundreds of thousands of them don't materialize. There is a lot that can go wrong in that journey.

    All and all, good luck to those who are long. You are going to need it.
    Aug 25 05:11 PM | 16 Likes Like |Link to Comment
  • Why Tesla Is Grossly Overvalued, Even If Everything Goes Terrifically [View article]
    I find the gross margins discussions amusing. Tesla is losing money on an operating basis and they are selling direct to the consumer. You have to figure that if they were forced to sell through dealerships (everything else being constant) margins will be either reduced further, or prices have to go up (The dealers have to make a profit). The car is already unfordable for "most people."

    The whole debate is fascinating to me and how personal people who are long TSLA take any criticism. Time will tell, but I just don't buy the whole "valuation is based on TSLA achieving full capacity of 500,000 cars" Stay away.
    Jul 14 02:48 AM | 16 Likes Like |Link to Comment
  • Currency Devaluations, Tighter Exchange Rules Could Further Hurt Mercadolibre [View article]
    There is no doubt that the company has potential, but again, shares rallied on the news that MELI beat revenue estimates. My point is that had they used the more realistic exchange rate of 27 Bs / Dollar, and they would have missed big time. So with Argentina and Venezuela being the mess that they are, and Amazon entering Brazil, I am not sure is worth the risk.
    May 10 06:54 PM | Likes Like |Link to Comment
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