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Vince Martin

 
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  • Thompson Creek Has Bottomed... Right? [View article]
    The terms are in the article above...until $4.64 you get 5.3879 shares of stock. Dilution looks to be about 28% (share count will be increased by 28%, reducing existing ownership stakes by 22%). Above $4.64 dilution diminishes a little bit.

    Did not realize that RGLD had fallen so far...truth be told I've done little DD on that stock but it seems hard to justify a 37% drop in less than six months.
    Mar 4 12:22 PM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    I actually wrote a piece about Benioff a while back making that same argument.

    I would -- in a totally unsupported, gut feeling, kind of guess -- put the odds of a '13 price hike in the single digits, percentage-wide. But I think at some point in 14-15 there's a reasonable chance you'll see it. I'm also sure they will learn at least some lessons from the '11 disaster you mention.
    Mar 4 03:44 AM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    There are myriad multitudes of issues involved in the idea of a hike, and I wasn't trying to hit them all. I was more interested in showing the potential change of a price hike in terms of order of magnitude.

    On your first point, it depends on how high the price hike is and how much growth it actually costs. But, yes, it's an interesting point.

    Second one is very interesting. A bit of a champagne problem but it does raise an interesting obstacle towards earnings growth, price hike or no.
    Mar 4 03:42 AM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    Agreed. It would have to be "we have heard your desires for improved content, and the best way to do is to institute a modest price increase, our first in (however long), to fully support the streaming library our customers demand and deserve."

    I also think just publicizing the fact that Netflix is paying significantly higher costs for streaming would help its image. I would wager a lot of customers think the streaming library is smaller because Netflix hasn't taken the time to upload their copies of the DVD. (Seriously.)
    Mar 4 03:39 AM | 1 Like Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    I wouldn't call myself a bull...maybe more of a short bear if that makes sense. I think everything regarding NFLX is "a dangerous thing," to use your phrase, but it's a heckuva interesting story to follow.
    Mar 4 03:37 AM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    Absolutely, nobody knows, and the numbers I use are (hopefully) obviously static enough that I'm not pretending they are some heretofore unrevealed statistic that unlocks the key to NFLX valuation.

    But...you can make those numbers do very nice things if you're a NFLX bull. And I think that will affect where this stock trades for a while.
    Mar 4 03:36 AM | Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    Hastings is arguing, essentially, that you'd go somewhere else for those, and he's fine with that. You might have HBO Go and Netflix, for complementary reasons.

    Again, it's $8 per month. I'm always amazed at some of the expectations content-wise.
    Mar 4 03:34 AM | 3 Likes Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    1) and 2) are precisely the question. It is worth pointing out that 1) + 2) only equaled six percent in the debacle of 2011, and one would think that some of them got over it and came back.

    3) is not necessarily true, at all. Again, if its framed well and touted as an improvement to quality it might even interest people who assume there's nothing on the site worth watching anyhow.

    As far as the multiple, that's one of the main points of the piece. This stock is not going to be based on a traditional multiple for a very long time. There's too much potential, too many moving parts, and too wide a range of outcomes based on the fixed-cost model for the big investors to buy it at a P/E of 12 and sell at 18.
    Mar 4 03:33 AM | 1 Like Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    I know exactly what is available free of charge; but it's also illegal, uneven, potentially damaging to your computer and usually has a lower quality. Given your point, what "new market" are you expecting Netflix to diversify into?
    Mar 4 03:30 AM | 1 Like Like |Link to Comment
  • The Effect Of A Netflix Price Hike [View article]
    To be clear, I agree with a lot of what you're saying. The point of the article was not to be a pure bull on Netflix, just to show what I felt was an interesting little numbers game based on a potential price hike.

    And, yes, Amazon and Netflix are different, to be sure, but I think my point still has some validity. You say it's "not possible" to hit $10 per share in earnings. Any junior analyst can VERY easily create a model that has them hitting $15 in US earnings in 2014 or 2015. And then he can argue that once international turns positive, and starts creating growth, the multiple is 20, and, voila, you've got a $400 potential price tag for FY15.

    I'm not saying that's right by any stretch, but if you look at how those models are done, giving a 10% probability of those to a weighted model will get you a pretty nice valuation. And THAT's where the AMZN-NFLX comparison comes in, because the "potential" in both companies (coming, I agree, from very different places) can support a seemingly absurd multiple for a very long time.
    Mar 4 03:29 AM | Likes Like |Link to Comment
  • Corning Looks More Than Fairly Valued [View article]
    Corning's problems are mostly coming from the Japanese. America has little or nothing to do with it. :)

    Secondly, comparing share prices is like comparing apples to razors.

    Thirdly, the glass may be vital, but it's getting cheaper, and yield is increasing. It's not as if nobody else knows how to make glass, either.
    Mar 4 03:25 AM | 2 Likes Like |Link to Comment
  • Corning Looks More Than Fairly Valued [View article]
    It's just not a big enough market, it appears. If you look at the comment above referencing AMZN and GLW, I think the lower share price sometimes makes investors forget how big Corning is and what it really takes to move the needle. The telecom segment did about $155 million (off memory) in profits in '12. If you spun off it off it would probably be worth $2.5-$3B. But GLW has a market cap of $18.5 billion. So even if you outperform in that segment you're only creating a single-digit boost to the overall share price. Execs do seem to have high hopes for it but, as noted, they said that after FY11 as well.
    Mar 4 03:23 AM | 2 Likes Like |Link to Comment
  • Citing royalty costs, Pandora (P) is reinstating a 40-hour monthly listening cap for free users.... only this time, it applies to mobile listeners. The company insists the move should only affect 4% of mobile users. The timing of the announcement is noteworthy, given it comes: 1) 8 days before Pandora's FQ4 report. 2) 3 months after Pandora provided light FQ4 guidance and reported mobile ad rates remain well below PC rates. 3) A day after founder Tim Westergren made a renewed call for passing the Internet Radio Fairness Act, introduced in Congress last November. [View news story]
    Yeah but that cost control might be 10% of mobile royalty expenses.
    Feb 28 02:52 AM | Likes Like |Link to Comment
  • Buy Boyd Gaming Ahead Of Online Gambling Approval In New Jersey [View article]
    1. You don't understand the land-based casino industry business model. It has huge cost leverage and, in BYD's case, huge debt leverage as well. So, yes, modest decreases in revenues result in huge valuation collapses. And the BYD/CZR comparison is ridiculous beyond words. The idea of using P/B as a metric for comps makes no sense for myriad reasons.

    2. ".I just know how the market works and I know the amount of fraud that goes on inside the market."

    No, you don't. Again, you have absolutely no evidence in arguing that GS's far more detailed and nuanced analysis is fraudulent in any way. Making a list of three or four GS calls that went wrong -- out of the 1000s of stocks the company covers -- is not "evidence."

    3. Yes, commercial real estate is improving; but what does that have to with a casino? Again, those rising values don't affect a casino's valuation one iota, because it's not an asset that can re-purposed. It's not a shopping center or an office building where rents can improve. It's valued solely for its ability to win money from its customers. The real estate market around it, from a valuation standpoint, is completely immaterial.
    Feb 25 05:41 PM | Likes Like |Link to Comment
  • Buy Boyd Gaming Ahead Of Online Gambling Approval In New Jersey [View article]
    You're missing a lot of things here. First of all, the GS speculation is just nonsense. You have no evidence for it and it has no place in an investment article.

    Secondly, Boyd owns 15% of a JV for online gambling. That JV will face a 15% gaming tax in NJ. It will also face direct competition from Caesars and likely PokerStars, who have a variety of edges over the bwin.Party/MGM/Boyd vehicle in terms of experience and branding. Just because OG may be "big" doesn't mean BYD will have any significant piece of it.

    Thirdly, Boyd is trading under book value -- but not under tangible book value. It can't just sell assets to pay off debt, either; there's no demand for casinos in saturated markets like MS and LV locals. And 'rising real estate' values don't help casino valuations. They are not properties that can be repurposed or leased out.

    And PENN has grown revenues because it's built new casinos (and bought additional ones). Organic revenue growth in the regional industry is basically flat; down single-digits in some places, and up single-digits in others.
    Feb 25 05:15 PM | Likes Like |Link to Comment
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