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  • Apple continues to outperform; RBC hikes PT [View news story]
    We suggested $AAPL leverage up for the largest share repurchase in stock market history on February 21, 2012 - 18 months ago http://bit.ly/LVJMj9 If anyone can find this same idea in print at an earlier date, please advise...yes, we're thought leaders.
    Aug 15, 2013. 04:25 PM | Likes Like |Link to Comment
  • ChipMOS rallies as market digests Q2 results [View news story]
    Specifically, looks like the increased cap-ex will support $AAPL fingerprint sensor ramp and volume production.
    Aug 15, 2013. 01:23 PM | 1 Like Like |Link to Comment
  • Peerless Systems Is A Rare, Profitable Net-Net And My Pick To Click [View article]
    Jae - At first glance, this looks like a great net-net idea. HOWEVER, after some further digging, I might actually write an article espousing a short thesis.

    It appears that PRLS is violating securities regulations. Review their 10-K.

    They list in their risk factors that they could be deemed to be an Investment Company (with associated limitations, costs, and potential penalties) if "the value of its investment securities (as defined in the Investment Company Act) is found to be more than 40% of its total assets (exclusive of government securities and cash and certain cash equivalents)."

    In FY12 PRLS had about $10 million of cash and $6 million of marketable securities, yet according to the statement of cash flows in the 10-K they bought over $391 million of securities and sold $388 million. Sure sounds like someone was trading...a LOT. Compare this to buy/sales of marketable securities for cash of any NON-investment company - we've never seen anything like this.
    In FY12 they note that they had $1.8 million in realized gains - meaning they had over a 10% yield on cash and marketable securities. In our experience, companies are supposed to put cash in government, munis, or the like...a 10%+ yield looks like someone was running a hedge fund.
    In FY13 they "scaled" back the activity and only had a $0.1 million gain on over $190 million of buys and sales.

    The 10-K also says there are only 3 employees, meaning this clearly was done under Mr. Brog's direction - and amazingly, the Board did not report this, although a couple of members departed.

    Liquified, there could be upside to shares, but if the SEC gets involved, this could be worth much closer to zero.
    Aug 14, 2013. 05:25 PM | 3 Likes Like |Link to Comment
  • Millennial Media beats by $0.03, misses on revenues [View news story]
    We still don't see how MM will EVER make enough money to justify its valuation http://bit.ly/SN3Oin
    Aug 13, 2013. 04:20 PM | Likes Like |Link to Comment
  • Millennial Media Signs Definitive Agreement to Acquire Jumptap [View article]
    We still don't see how MM will EVER make enough money to justify its valuation http://bit.ly/SN3Oin - we called the short at $14+
    Aug 13, 2013. 04:18 PM | Likes Like |Link to Comment
  • Icahn discloses Apple position, calls for bigger buyback; shares jump [View news story]
    Gratifying to know that King Carl reads our work http://bit.ly/LVJMj9 - Carl, you owe us 2 and 20
    Aug 13, 2013. 03:06 PM | Likes Like |Link to Comment
  • Elpida Is Now Micron - Or Back To (From) The Future - Part 2 [View article]
    Russ, flattish revs or not (revs and margins will be up this year), at 2.5x EV/EBITDA (name another co with such a low multiple that is not going out of business) and a near ~20% FCF yield it is simply much too cheap - I recommend you read this article http://seekingalpha.co...
    Also, if you spend a few minutes and review Chipmos' 20-F you will see that Micron has outsourced increasing amounts to Chipmos in each of the last 3 years (on the assembly side). For example, several years ago, it was only DRAM, now NAND as well, which should increase with the Singapore conversion.
    Decent business at a deal of the century price.
    Aug 4, 2013. 02:29 PM | 2 Likes Like |Link to Comment
  • Intel's Dividend Disappointment: Don't Panic - Yet [View article]
    Actually, the thing to do if you're at a bottom (which may or may not be the case with Intel) would be to buy back as much stock as possible. That maximizes the future EPS that accretes to shareholders.

    Keep up the great work!
    Aug 4, 2013. 08:32 AM | 6 Likes Like |Link to Comment
  • Intel's Dividend Disappointment: Don't Panic - Yet [View article]
    Ashraf, despite your ongoing enthusiasm for Intel's new products, we continue to fail to see what could actually get Intel's top and bottom line to grow like "gangbusters." The secular headwinds that Intel faces in PCs don't appear to be slowing and the risk of future losses in high-margin server surely outweigh gains in tablet, if they even happen.
    We don't foresee a lot of room for future dividend increases. Surely if Intel feels good about its prospects some of its cash flow will be used on additional buybacks. They also continue to spend exorbitantly on cap-ex.
    A basic finance question for you: arent the excess capacity charges non-cash? They negatively impact EPS, but wouldn't the impact of charges be irrelevant on Intel's ability to fund a dividend?
    Aug 4, 2013. 08:03 AM | 4 Likes Like |Link to Comment
  • Elpida Is Now Micron - Or Back To (From) The Future - Part 2 [View article]
    Barribas, we're sure Russ will weigh in, but we have written multiple articles on IMOS and have followed them closely for several years. We'd suggest that the Elpida acquisition represents a significant incremental growth opportunity for IMOS. If you review IMOS' most recent 20-F you would see that their MU related revenue has increased as a percent of sales and in absolute dollars each of the last 3 years - even years where Micron's own revenue was declining. Clearly MU is outsourcing more and more to IMOS.
    The thing is, when MU began outsourcing to IMOS several years back, they chose IMOS over Taiwan competitors PTI and Walton (Elpida's partners). With IMOS sitting on a large empty manufacturing facility that they acquired in early 2012, lower pricing compared to peers, and a long-standing excellent relationship with Micron, there is every reason to believe that IMOS will get significant additional business from Elpida over time.
    Of course, that IMOS offers a near 20% free cash flow yield and trades under 3x EV/EBITDA is also a great reason to be long the stock. And to be clear, that is not a function of this year being a "peak" year - if you check out 2011 or '12, not great years for DRAM, you'd see similar levels of free cash flow and EBITDA.
    Aug 4, 2013. 07:37 AM | 7 Likes Like |Link to Comment
  • Elpida Is Now Micron - Or Back To (From) The Future - Part 2 [View article]
    Alpine, we're sure Russ will weigh in, but regarding the bond holders we want to share what we know. We had the opportunity to speak to some of the major Elpida debt holders. As Russ points out, at the time of Micron's successful bid for Elpida, it was something of a risky move given the hellish performance of the DRAM industry at the time - given the price and implications for industry consolidation, not a huge risk, but with Micron losing money as well, something of a risk. In hindsight, clearly a steal - likely the steal of the century.
    The debt holders we spoke to said "micron is paying less than nothing" - absolutely along the same lines as what is suggested in this excellent article. They are not happy about it, but that is with the benefit of hindsight. They are aware at the time Micron represented the best offer, have followed all bankruptcy procedure, etc., and while they are not happy, that the courts rejected their objections is understandable. We think Russ' analysis is spot on, and the recent sell-off in Micron creates the last, best opportunity to buy shares.
    Aug 4, 2013. 07:20 AM | 8 Likes Like |Link to Comment
  • Promising Opportunities With Major Customers For ChipMOS [View article]
    Nice article. Very much in agreement with what we've written previously. Top-tier customer base trading at a distressed multiple. We've received numerous email messages on IMOS and we keep suggesting stay the course. From now on, we'll suggest they give your article a read as well.
    Aug 2, 2013. 02:00 PM | 2 Likes Like |Link to Comment
  • Major Change Could Accelerate Growth At Move Inc. [View article]
    Odysseus, I agree with most of your points and basically see eye-to-eye with you. Zillow is very, very expensive, and probably at some point will be an extraordinary short. However, the same was true 10%, 20%, 30% lower. If one did a pair trade of MOVE and Z at any point in the past few months, they would have lost money. Personally, we a looking to short Zillow, just don't want to get run over by a runaway train.
    We disagree with your sequential analysis. Not sure why you focus on it so much. Also, if you are going to say that Z "only grew by 16%" in 1Q from the "weakest real estate quarter" then intellectual rigor demands that you point out, that 4Q was spectacular and unusual in that it was UP q/q from 3Q. Based on a typical down 4Q, 1Q would have been up enormously q/q (thus the import of looking at y/y). But all of this is basically neither here nor there. We don't fundamentally disagree.
    What we do believe is that the multiple disparity between MOVE and TRLU and Z is so colossal, that if MOVE can demonstrate a resumption of growth (6 consecutive q/q growth quarters, best y/y in 6 years are signs in that direction), then there is massive (sorry, MASSIVE) room for MOVE's multiple to expand.
    Jul 30, 2013. 12:44 PM | Likes Like |Link to Comment
  • Despite Doubling, Zhone Offers Upside To $8-10 In 12-18 Months [View article]
    Agree, expect positive news from Nasdaq to provide additional lift to shares in near-term.
    Jul 25, 2013. 11:32 PM | Likes Like |Link to Comment
  • Radcom On Cusp Of Inflection, Shares Offer Multi-Bagger Potential [View article]
    Completely agree. Stock will be going much higher. Patience.
    Jul 25, 2013. 09:15 AM | Likes Like |Link to Comment
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