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Sunil Shah  

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  • Why Twitter? [View article]
    As a twitter 'consumer' in south africa, i am categorised as one of their sms fast followers, the area where they claim 16m user growth. in reality, i receive emails from them, that i ignore. there is zero engagement, and zero views of their banner ads. HOw they feel this is going to solve their problems is beyond me.

    Stock deserves at very best to trade at 5x sales, or 40% lower. Even at 5x sales, its expensive as they will never break even on a gaap basis. Short and confident.
    Aug 1, 2015. 05:46 AM | 1 Like Like |Link to Comment
  • Is Twitter Facebooking? [View article]
    Ok apology offered Brian.

    HOWEVER:
    I was waiting for content on HOW you should value this as a private equity investor. What new metric might be relevant? T

    he fundamental problem IMO is twtr wants to be more user friendly to a wider audience, and to do this they would discourage their power users, who appreciate the current functionality. So it aint a facebook (wider audience) and will never be fb (cos fb already exists and will be nigh impossible to topple); and it will never garner much more than their current MAU's.

    So what valuation? today it is 10x 2015 sales, but losing a packet on GAAP. I think it could fall another 50% (=5X sales) as a Private equity valuation, which hopes someday a value bundle that can be monetised to the wider public. Say in the next 10 yrs. But first we need to see the value proposition for the twitter user, in a wider public. And it aint there, whilst the valuation assumes a very successful cash generator eventually.

    It will come crashing down between 2 stools.

    I was hoping your insights into a Private eq valuation would be informative, but I havent found them in your article.

    But excuse my harsh tone.
    Jul 29, 2015. 12:59 PM | 1 Like Like |Link to Comment
  • Is Twitter Facebooking? [View article]
    " Thiel states this concept very simply, "The value of a business today is the sum of all the money it will make in the future (Thiel, 44)."

    This is sooo profound, almost as earth shattering as the novelty of this article. NOT!

    How did it ever get published
    Jul 29, 2015. 11:26 AM | 2 Likes Like |Link to Comment
  • Game Of NAND: SanDisk's Uncertain Crown [View article]
    William,
    thanks for your response. another question given your concerns about margin compression.

    What do you forecast for sndk's gross margin for 2016, given your concerns. What is your first stab at 2016 eps? I ask to establish to what extent the price has already factored in the reduction in eps....

    thank you!
    Jul 12, 2015. 08:44 AM | Likes Like |Link to Comment
  • Game Of NAND: SanDisk's Uncertain Crown [View article]
    William thank you for some great insights for a newcomer to the nand /dram space.
    Question: why cant sandisk just partner with another dram player to assemble its embedded emcp module?

    Is it the scarcity of incumbents? Presumably sndk is a reputable partner to have? I'm not sure why they cant- is it an oligopoly?... i do see your point on margin compression, but that is better than losing 1/4 of your sales....

    And while I'm picking your brains, what do you forecast for sndk's gross margin for 2016, given your concerns. What is your first stab at 2016 eps?

    thank you for your insights - i know the HDD market well but have been forced to learn about NAND via SSD's!
    Jul 9, 2015. 03:36 PM | Likes Like |Link to Comment
  • Game Of NAND: SanDisk's Uncertain Crown [View article]
    William thank you for some great insights for a newcomer to the nand /dram space.
    Question: why cant sandisk just partner with another dram player to assemble its embedded emcp module?

    Is it the scarcity of incumbents? Presumably sndk is a reputable partrner to have. I'm not sure why they cant... i do see your point on margin compression, but that is better than losing 1/4 of your sales....

    Please enlighten me.
    Jul 9, 2015. 03:12 PM | Likes Like |Link to Comment
  • Twitter As An Activist Investor Target [View article]
    Mr Mark, the fact that you bought a battery on a twitter tweet is neither here nor there. The fact is that users need more engagement, more prompting, more interaction than Twitter can possibly provide in 140 characters.

    they are on the road to nowhere, to quote talkin heads.

    that's why farcebook is leaving twitter in the dust in DAU. Thats why everybody worth their tweet is leaving twitter.

    It's an intrinsically impossible problem to solve given the niche twitter has carved for themselves. .the possibiility of monetising their folllowers is being diminished as we speak...

    but tweet away
    Jun 30, 2015. 08:52 PM | Likes Like |Link to Comment
  • Twitter up 3.6% as M&A rumors fly again [View news story]
    hey twitterati, gimme a break. This is classic 'any ol thin with a possible future should fly'. Well this pig aint flying. there is no underlying reason for display ads to actualise: there simply isnt enuf engagement with the customer. If it's tough to get an advertiser to post a display ad on farcebook, do you honestly believe the twitter follower has enuf time to 'buy' on a tweet?? That's the ultimate engagement question of the prospective advertiser.

    Use your head man, seems like so many employees are, as they jump ship...

    Consider this the start of the new age of reason on the monetisation of the digital age.
    Jun 30, 2015. 01:32 PM | 1 Like Like |Link to Comment
  • Twitter As An Activist Investor Target [View article]
    Please gimme a break. This is classic 'any ol thin with a possible future should fly'. Well this pig aint flying. there is no underlying reason for display ads to actualise: there simply isnt enuf engagement with the customer. If it's tough to get an advertiser to post a display ad on farcebook, do you honestly believe the twitter follower has enuf time to 'buy' on a tweet?? That's the ultimate engagement question of the prospective advertiser.

    Use your head man, seems like so many employees are, as they jump ship...

    Consider this the start of the new age of reason on the monetisation of the digital age.
    Jun 30, 2015. 01:23 PM | 3 Likes Like |Link to Comment
  • EBIX: Caught With Its Hand In The Cookie Jar [View article]
    Everything written in this article is factually correct. The author diligently outlines items she is not sure about (that cannot be unequivocally gleaned) but she inferred from 2 consecutive quarterly balance sheets.

    The problem is outlined quite clearly in the 3q 2014 10 Q:
    From EBIX's 10 Q for 3Q 2014:

    “During the three months ended September 30, 2014 and 2013 these aggregate
    contingent accrued earn-out business acquisition consideration liabilities,
    were reduced by $5.8 million and $4.1 million, respectively, and during the
    nine months ended September 30, 2014 and 2013 these contingent liabilities
    were reduced by $7.5 million and $10.3 million, respectively, due to
    remeasurements as based on the then assessed fair value and changes in
    anticipated future revenue levels. These reductions to the contingent
    accrued earn-out liabilities resulted in corresponding reduction to general
    and administrative expenses as reported on the Condensed Consolidated
    Statements of Income.”

    EBIX is, as a result of its accounting treatment, creating a balance sheet
    contingency reserve on acquisition, that is in subsequent periods, released
    to the P&L to synthetically reduce operating expenses and raise the profit
    margin.

    That is the factual truth.

    For calendar 2014, the earn-out release amounted $10.2m, on a pre-tax profit of $77m (or 13% ! of income).

    Now let's be clear:
    -this is consistent with GAAP
    -there is nothing awry in their accounting treatment

    HOWEVER EBIX does itself a huge injustice.

    Anything that can be construed as an ' accounting trick' will be detrimental to Ebix's long term interests. I am unambiguously (as a seasoned CA) of the opinion that this constant synthetic reduction of G&A expenses can be regarded as a deception, as it manifests itself as a significant detraction from profit when arriving at the cashflow and artificially raises the operating margin. (I only discovered it after going through the cashflow with a magnifying glass, and less informed investors are quite likely to cry wolf.)

    In my opinion the problem stems (as mentioned by the author) from using a ridiculous discount rate of 1.75%. This might be the cost of Ebix debt, but it certainly isnt the COST OF EQUITY. THIS PALTRY RATE HAS THE EFFECT OF RAISING THE GOODWILL AND THE EARNOUT LIABILITY on acquisition. As time progresses there is then the need of a future adjustment. And this is what the author is correctly highlighting.

    You need to know 2 things:
    -I have informed management how their accounting could easily be construed as deceptive. I am confident that there will be less scope for 'manipulation' in the future; partly because investors know and partly because the earnout reserve has already been exhausted. (To EBIX MGMT: And dont try to inflate it further with another acquisition + inflated goodwill + earnout liability. )
    -I am very long EBIX. It's a company I have followed for years and have been very vocal and bullish about - here on SA (see my articles) - especially during the Copperfield short attack. I am still very long, despite the recent run.
    -I believe, despite the 'revelations' in this article, EBIX shareholders can look forward to a very rewarding future....Revenue growth is about to accelerate and we are moving to a new ballpark in terms of contract wins. The secular story of insurance carriers outsourcing their back and middle office plays right into EBIX's sweetspot. The hard work has been done already, now it's a question of gaining territories and new markets by an established and legitimate player.
    -Even after abstracting for this accounting gimmickry, on a cashflow basis this company is cheap. Real cheap given its prospects.

    (EBIX Mgmt: as long as you dont sell out like you almost did at $20 to Goldman Sachs!!)
    Mar 30, 2015. 06:20 PM | 6 Likes Like |Link to Comment
  • Whom Should You Trust? Meredith Adler Or Herbalife's Banker? [View article]
    Your counting methodology is similar to HLF's in their tally of successful distributors. OFF by a factor of roughly ten.

    There are 7 bn people on the planet.

    But keep it up, HLF will have 70 bn happy distributors shortly...
    Mar 26, 2015. 08:54 AM | 3 Likes Like |Link to Comment
  • Herbalife: Mr. DeSimone's Neighborhood Of Accounting Make Believe [View article]
    @wez, thanks that helps given my very big short.

    It's a weak wicket,but I can only hope there were holes in this plaintiff's case that cast doubt on the allegation, "HLF should warn investors there are ongoing investigations where it is being judged if it is a pyramid"

    Which current case will determine this? I know there is one with the FTC and others. But which one will determine it and who is the plaintiff?
    thanks
    Mar 18, 2015. 01:21 PM | 1 Like Like |Link to Comment
  • Herbalife: Mr. DeSimone's Neighborhood Of Accounting Make Believe [View article]
    @wez thanks but help me here:

    the allegation that HLF did not disclose it was a pyramid scheme is thrown out. HLF clearly does not claim it is a pyramid scheme and this ruling would be affirmative (ie it would not be dismissed) if the court felt that HLF was actually a pyramid and did not disclose it.

    I think it is a huge win for HLF longs. Where am I wrong?
    thanks
    Mar 18, 2015. 01:03 PM | 5 Likes Like |Link to Comment
  • Herbalife: Mr. DeSimone's Neighborhood Of Accounting Make Believe [View article]
    subject: today's dismissal verdict that HLF is a pyramid scheme:

    @anyone pls explain why this is a non event?
    From the way I read it, the arguments raised by Ackman were presented as evidence that HLF is a pyramid, and the case was dismissed.

    I cant quite believe it, but from a legal standpoint, why doesnt this dismissal dismiss the allegation that HLF is a pyramid scheme - it seems Ackmans arguments were presented and case was dismissed.

    thanks in advance
    Mar 18, 2015. 12:18 PM | 3 Likes Like |Link to Comment
  • Herbalife +5.3%; shareholder lawsuit dismissed [View news story]
    @Roy the allegation that HLF did not disclose it was a pyramid scheme is thrown out. HLF clearly does not claim it is a pyramid scheme and this ruling would be affirmative (ie it would not be dismissed) if the court felt that HLF was actually a pyramid and did not disclose it.

    I think it is a huge win for HLF longs. Where am I wrong?
    Mar 18, 2015. 11:57 AM | 1 Like Like |Link to Comment
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