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Whitney Tilson

 
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  • Blyth's Management Can't Be Trusted: Stock Drops 85%, Yet CEO Makes Millions Via ViSalus [View article]
    Outstanding article Derek. And good commentary on the message board, free of the usual hateful attacks and other assorted idiocy.

    This is either a great short or long here depending on one thing: does BTH have the option to walk away from the $143 million or is it contractually bound to pay this?

    If anyone has a clear answer, I'd love to hear it.

    Thanks!
    Jul 26 08:41 AM | Likes Like |Link to Comment
  • Why I Just Made Montage Technology Group My Largest Short Position [View article]
    I was short VIPS briefly (I fortunately got out before it really ripped), but don't recall calling it one of the best shorts I'd ever seen. There's a huge difference: VIPS is growing (or at least claims to be growing) very rapidly, so if it turns out to be legitimate (I remain skeptical), the sky is the limit for the stock, so it's a very dangerous short (which is why I covered).

    In contrast, if I'm wrong on MONT (or even if I'm right) and the deal goes through, I lose a mere 5% in six months. Yawn... (Assuming there's no topping bid, which is always possible, but I think highly unlikely here, as the initial non-binding deal was announced nearly three months ago, giving MONT plenty of time to seek out other, higher bids.)
    Jun 11 03:10 PM | 2 Likes Like |Link to Comment
  • Why I Just Made Montage Technology Group My Largest Short Position [View article]
    What a silly lawsuit -- shareholders should be doing handsprings about this deal...
    Jun 11 03:05 PM | 1 Like Like |Link to Comment
  • Why I Just Made Montage Technology Group My Largest Short Position [View article]
    New Bee, My understanding of the timing is that the deal is likely to go through (or not) by late Nov/early Dec -- but in China, you never know...
    Jun 11 02:22 PM | Likes Like |Link to Comment
  • China Orders Montage Technology To Cease Production And Sale [View article]
    Agreed. Kudos to Aristides!
    Jun 11 08:52 AM | 4 Likes Like |Link to Comment
  • Expecting Continued Increase In Capstone's Share Price [View article]
    My goodness, what a load of nonsense. I was short this stock more than a decade ago and then forget about it -- until the silly bubble in alternative energy stocks earlier this year gave me another bite at the apple. Though the company no longer loses money on a gross margin basis (like PLUG does, for example), it's never come close to breaking even, much less earning a profit, so instead it has to rely on a lot of hype followed by big and highly dilutive stock issuances to keep the doors open -- otherwise it would have long ago gone bankrupt. It is inexplicable why the stock trades at 3.6x REVENUES. There are sound fundamental reasons why the stock traded well under $1 a year ago -- and it will surely return there again. You have been warned: DO NOT GET SUCKED INTO THIS PROMOTION!
    Jun 2 11:03 AM | 3 Likes Like |Link to Comment
  • Organovo's Bioprinting More Than A 'Stupid Exercise' [View article]
    "Organovo is more penny-stock promotion than legitimate company"

    Exactly. To those of you silly enough to own this stock: you have been warned.
    May 9 11:34 AM | 1 Like Like |Link to Comment
  • The St. Joe Company: Special Situation With Potential Significant Capital Return [View article]
    I read this and then went back and re-read my presentation from 2011 (posted at: http://bit.ly/1iLzxvB) and I wouldn't change a word -- and nothing material has changed as far as I'm concerned.
    May 2 12:10 PM | 3 Likes Like |Link to Comment
  • EXAS: Testing Negative For Future Revenue [View article]
    Great analysis -- kudos! I love shorts like this one, in which there are many ways to win.
    Apr 30 03:08 PM | 3 Likes Like |Link to Comment
  • NQ Mobile: Ignore The Noise, Buy The Growth [View article]
    It is blindingly obvious that NQ is a total fraud. What a gift it was when bulls ran the stock back up AFTER the initial Muddy Waters report revealed it as such. Call me greedy, but I'm not tempted to cover my short, as I think this ends the way Sino-Forest did...
    Apr 28 02:19 PM | 5 Likes Like |Link to Comment
  • Plug Power: Unprofitable Past, Poor Fundamentals, And A Best-Case DCF Value Of $2-$2.50/Share [View article]
    Well done Kerrisdale. This stock is such a joke -- a horse race between this and UNIS for the biggest promotion of the past year. Both are going under $1 -- it's just a question of when.
    Apr 2 02:41 PM | 8 Likes Like |Link to Comment
  • Unilife: CFO Resignation And Usurious Financing Imply Substantial Downside [View article]
    Excellent work Kerrisdale. This is one of the most obvious promotions (and shorts) I've seen in my 15+ year career. To those of you silly enough to be long this: you've been warned.
    Mar 21 05:38 PM | 6 Likes Like |Link to Comment
  • Unilife Finally Secures Its Financial Situation [View article]
    This is among the highest-cost financings I've ever seen in my career, which shows how utterly desperate UNIS is. Orbimed is simply making the bet that UNIS can continue to sell shares over time to fund the onerous debt payments owed to them -- not an unreasonable bet from their perspective, but terribly dilutive to UNIS shareholders (not that they seem to give a hoot; or perhaps it's that they don't understand what's really happening).
    Mar 18 09:31 PM | 1 Like Like |Link to Comment
  • IBM: An Island Of Value In A Sea Of Overpriced Stocks [View article]
    I guess this is what makes markets, but I'm short IBM because: a) I think the business is likely slowly dying and; b) I’m certain the company is engaging in all sorts of earnings shenanigans (albeit perhaps legal ones). For more on the latter, see Jeff Mathew's brilliant two articles, posted here: http://bit.ly/1nIv4iP and here: http://bit.ly/1nIv4z6

    PS--I love Buffett, go to every Berkshire meeting, and own a ton of Berkshire stock -- but I think he's got this one wrong.
    Mar 11 09:54 PM | 3 Likes Like |Link to Comment
  • The Beginning Of The End Of The 3D Printing Bubble [View article]
    To those who wonder why I published this after the stock's fallen quite a bit, I have two answers:

    1) I think it's as good a short now as it was at its peak a month ago (which is why I shorted more yesterday) because now the momentum of the stock is broken and investor and Wall St. analyst confidence in management is shattered, yet the stock's still absurdly overvalued; and

    2) I've been pounding the table on this bubble for quite some time. I was early, but nailed the top. For example, this is what I posted on the ValueInvestorsClub DDD message board on 1/4/14, with the stock at $96.42:

    DDD now sports a $9.9 billion market cap and trades at 21x sales.

    Think about the implications of this. I used to think that it's mathematically impossible for a company with a $10B market cap and more than 10x sales (much less 21x) to ever be a good investment, but a few companies have proved me wrong. They all have three characteristics:

    1) They serve rapidly growing global markets;

    2) They have winner-take-all (or at least most) business models; and

    3) They have extremely "light" business models -- meaning they can scale globally with very little capital required.

    The stocks of such companies can actually be cheap – even with big market caps and P/S multipes. Examples of stocks that have done well subsequent to periods at which they were trading above 10x TTM sales and had market caps in excess of $10B include Microsoft and Yahoo in the late 1990s (and Yahoo again in 2003-04), Amgen and Biogen prior to around 2003-05, Adobe in 2000, Google, priceline.com and Infosys in the few years after their IPOs, Qualcomm from 2001-2006, Salesforce.com at various points, as well as LinkedIn, Facebook, Baidu, Tencent, Gilead Sciences for their entire existences. (Incidentally, Netflix, which I still own, has all of these characteristics I believe – and trades at “only” 5.2x revenues; it was 1x revenues when I pitched it at the Value Investing Congress 15 months – and a 7-bagger – ago.)

    Note that every one of these 15 companies falls into two categories:

    1) 11 are software/internet companies that don’t deliver a physical product – the lightest business models imaginable; or

    2) Four have intellectual property (three have patented drugs) that allows them to earn supersize profits (gross margin in the 70-90% range and net margin of 20-30%).
    So now let’s apply this framework to 3D Systems. Re. #1, I’ll grant that 3D printing is a rapidly growing global market, but the company utterly fails characteristics #2 and #3. It’s a highly competitive market with no winner-take-all characteristics (though each company does have some IP) and DDD doesn’t have a particularly light business model (certainly not when compared to the software and internet companies I cite above). (Incidentally, the same analysis holds for Telsa, which I’m also short – it trades at 10.8x sales and is an auto manufacturer!)

    In the past 20 years, DDD’s gross margin has only crept above 50% in the last two years, and its net margin has actually fallen from its peak of 15.4% in 2011 to 11.0% in 2012 to 9.5% in the last 12 months. This is what investors are playing 21x sales for?!

    Mark my words: this will end very badly. I think DDD is maybe worth 2x revenues, so my price target is around $10 – down nearly 90% from here.
    Feb 6 06:11 PM | 3 Likes Like |Link to Comment
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