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  • Why Wayfair Is My Largest Short Position [View article]
    Don't really get this post. So its your largest short because its your largest short?
    Nov 11, 2015. 03:51 PM | 4 Likes Like |Link to Comment
  • Mobileye: Price Target $25 Near Term, On The Way To $10, Just Follow The Money [View article]
    Analysts upgrading/downgrading to profit or win investment banking business has been around since beggining of sell-side research. Go dig in the history books for all the instances in which it has come to light. As for corporate raiders and insider trading you may want to go read up on the 1980's. Monocular does refer to singular but as is the case with eyes what is being discussed here is processing being done alone. In stereo the two cameras work together to achieve depth perception same as you do with both your eyes. So, multiple mono cams are not an oxymoron as each is focusing on a different field of view, ie multiple focal lengths and not working together in the 3d image processing. If you did any work here you'd know how obvious this is, but that does require more than 2 minutes of your time. But glad you have a dictionary handy for your analysis. Doing honest work and publishing a thesis on a stock you have a position in is not 'morally wrong'. If a whole host of citrons shorts over the years had not been proven epically right nobody would give a damn about what he said. This was an 80x sales soic, if you think that's no big deal we suggest you look at the history of chip land. If mbly is a monoply for next 15 yrs our short still works from where we put it on. When u understand the ramifications of that in the context of this space you will get why this stock fell as quickly as it did.
    Sep 20, 2015. 07:47 PM | 2 Likes Like |Link to Comment
  • Short Emerge Energy Services: Peak EBITDA, Peak Stock Price, Distribution Going To $0 [View article]
    This was an excellent piece. We looked at doing something similar late last year as the short in this space was extremely appealing even after the initial 60% decline from the bubbly peak of last august. What's interesting here is there was probably nothing we have come across in years that was as obvious as shorting this segment. If anything that element gave someone pause because it looked too damn easy. The way financial sponsors jumped all over this space chasing the seemingly no brainer economics guaranteed a blow up of epic proportions once the market turned south. What's been remarkable is just how slow investors were to react and the comfort they have taken in contractual protections in the face of a huge rerate in the energy complex. Reading these comments you'd like to sympathize with people who have been long and just watched these names bleed to death for months on end, but its tough to do so considering how obvious this was.
    Sep 14, 2015. 09:17 AM | 1 Like Like |Link to Comment
  • Mobileye: Price Target $25 Near Term, On The Way To $10, Just Follow The Money [View article]
    Yeah, that's not how markets work. If investors did not agree with our report, the stock would do nothing. You don't move a $15 billion company around without showing that a hell whole of a lot of people have been asleep at the wheel. And to sit here and make comments about people you don't know and 'say they should be in prison' and assume they enjoy reading that after six months of intensive research on this space and stock is to put it mildly irritating. What work have you done on this space? How many of the people developing mono, stereo, and radar algorithims have you talked to? How many people in the automotive or automotive safety space have you consulted with? How much research have you done on the history of the technology and relationships in the space? We are just curious as you seem to convinced our work is so full of disrepute that we should be in prison, you clearly must be and expert. And to sit here and say we don't care about our track record is also nonsense. We have done 4 shorts in 2.5 years. 2 are to this day 45%+ lower then when we published , one is 10% and we are certain that is heading lower, and there is mbly at 30%. Everyone of these companies had a $2 billion mkt cap when we published and $30mln+ in daily trading volume. Whats your track record? Look at what the market has done over the past several years and then come back to us on our shorts, and for the record none involved fraud. In fact, almost everyone revolves around a seriously oversold recent IPO by wall street and mgmt. Ohh, we also do longs, all of which have performed exceptionally well as well.

    Now onto your understanding of wall street. They are experts at making money of every kind of manipulation you can think of. Libor, FX, stocks, mortgages etc. In every instance they have settled for billions to continue operating after a manipulation scandal was brought public. But that is not to say there not honest people on wall street, but when it comes to securities they make money 'selling'. On the buy side we have to perform. It's two different universes, but many of us on the buy side have had some sell-side experience. In some instances we have had up close and personal looks at just how ridiculous the shennangins can be, and are often to this day still amazed at just how quickly people forgive and forget when it comes to wall st. Look at the tech ipo's of past couple of years....80% are underwater for anyone who bought on the 1st day and many with preposterous 75% +losses. You'd think someone would look at the numbers and just be like heck I shouldn't touch anything these jokers are selling me. But instead you want to celebrate them and lock up the people who are simply saying ...'hey, you might want to do a little more work here because this looks like a guaranteed way to lose your money.' And the irony is because they are 'institutions' you assume they can do no wrong when in fact they end up doing the most wrong.

    To be clear we are not surprised by all of this. You wont be the first or last person to charge conspiracy and manipulation regarding shorting, that's just the way the world works. But understand in this business you are only as good as your track record. Do people scream manipulation when icahn tweets he is sitting down with tim cook to talk apple stock buyback or buffet talks about what he owns. No they simply rush to do the same based on their reputation. Do they write reports and publish on SA no? But if they were 40 years younger we can assure you they would be publishing especially if they were shorting. Do understand that to 'influence' a huge liquid stock you need to uncover something everyone has missed in markets, deliver that information in a timely manner, and have built a track record and have a medium that gets serious investors who make decisions on large blocks of shares of such a stock a reason to sell. To be clear the whole combination is rare, and if you were doing it we can assure you you'd expect to be compensated for your work. Unforutnately compensation is not guaranteed. Some analyst may issue an upgrade, the company may put out a hot air pr, the whole apparatus will fight you and your position may go against you for weeks or months. Your investors may get fed up and ask to pull out. And then after you've closed said position mgmt will one day acknowledge what you said the stock will fall 40% overnight and all the analysts will go from buy to sell. Or simply you may be proven wrong. Technology can shift, and a ceo can read your report and decide to adjust the whole business around what you have written. People often underestimate that element when it comes to shrt seller activisim. Whatever the case, the point here is 'sham reports' are not likely to do any harm to the type of stocks we question. So really its reputation, and citron has been doing this for a while. But instead of acknowledging that you want to collaterall attack the authors. How honerable of you!! What happens if your life is put under a microscope? If someone disagrees with you at work do you instantly try to character assasinate them instead of addressing the merits of their argument?

    As for your comments about our work being 'filled with inaccuracies' all we can say there is that is INACCURATE. Your understanding of the space is clearly rudimentary. Mobileye's model is still monocular focused there is zero doubt about that. Having multiple mono cams together for trifocal is not stereo, but to be frank why bother explaining this to someone who put maybe 2min of thought into his comments and thinks wall street is santa clause. You can put a group of phd's in a room and discuss the topics we raised and they will disagree about a whole lot of things so absolute truth here isn't attainable as is often the case in technology. This was of course why we zoned in here because the sell-side seemed to have concocted their own absolute truth for this investment narrative.

    On a side note, we don't necessarily agree with everything Citron said especially with respect to other stocks and industries they have used as comparables. But Andrew has been doing this a long time and his record speaks for itself.
    Sep 13, 2015. 10:30 PM | 11 Likes Like |Link to Comment
  • No Blind Spots: Citron Is Wrong About Mobileye On Several Levels [View article]
    'Denso's system is pretty much for high end cars and likely uses stereo camera'

    Seeing as we linked to a photo of the denso mono camera toyota will be using as well as the continental one which where in a pr from 6 months ago they have not been 'quiet'. And to say the Conti,Bosch, or Denso just got into this game or need 2-3 years is nonsense. Denso was partnered with mbly back in 2003, and Conti back in 2007. Both broke off on their own over 5+ years ago, and have been bolstering their resources in the space ever since. And no the systems are not vastly different. We can sit you in front of half a dozen engineers who will tell you as far as the mono cameras go when you get past bells and whistles their is little difference for the core vision detection. Now what you have here is redunancy and robustness for AEB by fusing the camera with radar. And this mobileye cheapness argument is overstated as far as mass market goes because the tier1's investments and related costs are not captured and all that is captured is cost of a chip. You need to also by a camera, lens, related circuitry, maybe do the fusion work with other sensors, and all the integration. If a tier 1 has made the investments to do that already as 4 of the top 6 have that are not relying on mbly, they can be quite cost competitive. Because realize the tier 1's using mbly simply are buying a chip and doing everything else as well including the radar fusion in many cases. The only true notable cost difference you can argue is against stereo with and added image sensor but this cost should be weighed against what that provides which is reliable depth perception. Multifocal can address this issue and others but you are now talking multiple cameras, lenses, and eyeq3 chips.

    This article misses several key points and really under plays all the technological questions going forward, but thats understandable. What isn't is the willingness to add such weight to one quarters numbers vs 20 yrs of preposterous assumptions. Hint:Mbly will always be beating the numbers of the analysts who work for the banks that underwrite multiple multibillion offerings in a year. But if the current share price still reflects monopolistic margin and mkt share assumptions as far as the eye can see a proper defense/bull case should address that. The sad thing about this whole story is honestly very little has changed in a year as far as mbly goes or what the street was modeling, but move your terminal growth rate 200bps here ...assume a 10% cash tax rate in perpetuity for the greatest free cash flow generator in soic history....a little tweak here....a little tweak there and you can change your fair value by 5-6 billion.

    Our aim with Mbly was to show you could short this stock and make money today even if you believed they would dominate this market for the next 15 years. Admittedly we don't believe they will come anywhere close to the 10 yr models being tossed around, but you can't conclusively prove that today. Yes, you can look at every other asic maker of note or specialty fabless chip company of the last thirty years and say the evidence is overwhelming. Yes, you can look at the supply chain and where this chip fits into the total package being sold by a tier 1 to an oem and argue that makes it even more certain. And then you can look at the chip ecosystem, and the tier 1's who have invested already and say heck this is not debateable. And you can go one step further and say the multi core gpu players will eventually rock this boat or that the search giants will blow their image recognition out of the water. But the certainty is still not there which ironically is what made this so appealing.
    Sep 13, 2015. 08:45 PM | 6 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    The amusing thing here is this is an error which you should pick up from the context if you didnt know anything about ottomatika. Should read "So the way to think about ottomatika software is it becomes...." We came across this as well and though we concluded from context and our research that it was a clear mistake we took time to make sure that was the case. It is a bit ironic though when you consider the hype. But to be clear mobileye is just the vision software behind a mono camera nothing else.
    Sep 10, 2015. 11:53 AM | 1 Like Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    Thanks for the reply. The goal of this piece was to show there has been a very one sided investment narrative which shockingly for a company of this size has persisted for nearly a year. The opportunity for a small fund like ours to highlight what is going on in the space which at least casts doubt on this narrative should not exist, but yet as is often the case with story stocks people simply have not bothered to do the work. As we stated in the piece, mobileye is well positioned, there is no doubt about that. What is clearly in question is whether investors realize what they have paid up for, and that is essentially a 15 year monopoly on vision based automotive algorithims. We are certain that is already no longer the case and have pointed out why. That doesnt mean mobileye is not sitting on an unbelievably amazing business for the near term, but rather simply that it is nowhere near as amazing as percieved. Of course this comes as a shock to most momentum investors, but at the end of the day that is the nature of investing.
    Aug 28, 2015. 01:56 PM | 3 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    Aug 20, 2015. 08:12 AM | Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    AMBA was pitched as a short on many occasions because of the view that ultimately they'd have major competition for their gopro biz. The reaility is even mgmt was very worried about that which is why they went public so fast. But let's be clear AMBA was never 'overvalued'. Compared to stocks like sigma, portalplayer,genesis, pixelworks, and countless others at their peaks of some respective hot trend amba was always cheap. But the argument around their limited moat does hold water, but again at what price do you want to express that thesis. We will say we agree that citron's 1st amba report left a lot to be desired, but we seriously doubt that it was the sole reason for the sell-off. More likely an excuse as there was nothing in there of note thesis wise. To say competition will one day come for a stock where everyone is familiar with that risk is very different from showing competition is already here for a stock where everyone has been led to believe it doesn't exist and won't exist for the next 15 yrs.
    Aug 20, 2015. 08:06 AM | 2 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    We disagree with this philosophical interpretation. Anyone short is a holder so when a stock rises all holders don't benefit. And yes you can scare someone into a long. You scare them into thinking they are going to miss out on a sure thing. Boiler rooms make a living off of this. A compelling short thesis requires no fear as evidence is presented and left for others to evauluate. If its not compelling it will be disregarded. Did we title our piece 'why mobileye is doomed' or 'why mobileye is going to 30'.....did we make sensationalist claims? No we didn't. Did we get on cnbc and spew utter nonsense to the masses about this company having 100% market share...being the next intel....being autonmous we didn't. The creation of wealth that shouldn't have existed in the 1st place is more hurtful then the dissolution of said wealth. It's essentially an illusion, and its usually to benefit the few at the expense of many.
    Aug 20, 2015. 07:56 AM | 7 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    Ahh, now we understand your confusion. SA provided links for Bosch and likes which confused you. Bosch is private....that otc link is wrong...but we assure you they have employees, in fact close to 300,000 of them.
    Aug 20, 2015. 07:41 AM | 6 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    Another genius who thinks this is the first fabless chip company to sell an ASIC. We painstakingly addressed this in the report, but guess you didnt bother reading. The only unfortunate thing here is that you think they have decades of an edge in recognizing millions of scenarios as if thats how you develop the algos. The approaches in object classifcation for mono cameras are not rocket science, but try explaining that to someone like you who has bought into the hype.
    Aug 20, 2015. 06:02 AM | 1 Like Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    The point of this report is essentially to show that if we are completely wrong in an epic fashion over the next five years that the stock is essentially worth 50-60$. Your goal should be to take all the info on OEM's, tier1's, auto chip companies, gpu's, and platform tech search companies with ambitions like google/apple/baidu and discount that to get to a price at which you are essentially neutral and happy to sit and watch this play out. Our argument is that price is somewhere between 30-50% lower.
    Aug 19, 2015. 01:07 PM | 1 Like Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    The purpose of pointing out the ability of autos to switch camera technology in two years on a vehicle platform is to show that the investments have been made 4-5 years prior which is a seriously overlooked fact. The literature around the name also almost universally rules out this possibility which is in fact already a reality. As for the deal signed with sony, you are seriously overstating what that is about. Yes, so sony has image sensor ambitions and has showed off some impressive tech, especially as far as night-time image resolution capabilities but that's not a mobileye game changer because of this license deal. And if you read in detail we do discuss 'the brain' behind the car and the zFAS controller from delphi briefly. Reality is there is so much technically we still would like to get into, but this is not a technical board. It is a board for stock investing which is something you have completely missed in your comment.

    So, let's be clear, if this was a $10 stock we'd own it. We'd be uber bullish at least at that level for next two years or until it doubled. The point here is it is not!!! At where it trades, you can model out not just a best case scenario but literally the ultimate you own the market for 15 years and have insourmountable technological ip edge scenario and the stock is roughly fairly valued. And more importantly everyone who owns it has no understanding of whats going on. Like they are sitting here wondering about when VW is coming as if its the last box to tick meanwhile there are going to be multiple OEM launches by competing tier 1's at mobileye existing customers. To some people that's called displacement or multi sourcing ...however you want to spin it....same goes for toyota passing on them. Did they just hear they where in the market? Or did they ship them plenty of test equipment and not got selected in favor of two other suppliers? Again how you spin it. Perception and reality are the game here. And yet here you come in with a comment about what the tier 1's are designing mdc wise or whether sony will make headway in auto image sensor market as if the read through on that was because we didn't cover that means pointing out that the existing narrative on the stock is so far removed from anything close to reality is somehow flawed on our part. Well then go read the sell-side guys who are regulated and everyday hike price targets and tell retail and institutional managers to buy the shares without covering 1/100th of what we covered let alone what you feel also needs to be addressed.
    Aug 19, 2015. 11:32 AM | 5 Likes Like |Link to Comment
  • Mobileye: A Very Compelling Short Thesis [View article]
    lol....please do tell.
    Aug 19, 2015. 09:58 AM | 3 Likes Like |Link to Comment