Rubens Morse

General Growth: Prudential's Offer to Extend Maturities Is Wonderful News

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General Growth Properties: The Buzz Has Worn Off, Temporarily

I think Bill Ackman is delusional in thinking the creditors will agree to a restructuring where they get no equity. Some distressed managers that are involved with GGP debt think the same. Bill Ackman is also ignoring (or at least not mentioning in his presentation) the troubles at some of the malls that have 'project finance' debt that is ahead of the corporate debt in default now.

This is a long shot gamble, not an investment.

The Top 12 Brands Likely to Survive

I think you are very wrong about Playboy, Zale and Steinway.

Steinway's brand will survive for sure but I'm not sure the company will in its current form. The most valuable unencumbered real estate is the store and office building on 57th Street. The Queens factory site could only be sold in a total liquidation scenario, if the factory continues to run they won't sell it. There is a worrying trend of Steinway financing more and more of it's dealers inventory, since several banks and GE are cutting lines in this segment. They will probably have bad debt problems from the dealer financing in the near future.

Zale is just an overleveraged retailer, it could go under and no one would miss it, like Circuit City and Linens N Things. I also think Playboy is becoming less and less relevant in today's digital world. The latest proof of that is the magazine will probably go from monthly to bi-monthly. Raising the price of the magazine to $5.99 is a pretty desperate move and should backfire. The reason they are going down (I think the stock will eventually go to $0) is that today you can find better and cheaper adult entertainment online, and their brand is just not relevant for the new generation. Their old time readers are getting older and dying, the young guys don't care about Playboy.

3 Interesting Reductions in Bill Ackman's Holdings

Could you elaborate on how you compared DPS with PEP and KO and didn't find it attractive?

DPS is a misunderstood company, a combination of syrup company (like PEP and KO) with a bottler (like CCE and PBG). It should trade at an EV/EBITDA multiple somewhere in between, but is valued right now very close to the bottlers.

Garmin Set to Enter Smartphone Fray with Its Nuvifone

It's funny that most people from New York who don't drive a car still don't understand what a PND does. And will every smartphone have a GPS in it? It's more a dream that a fact.

Poll Shows 73% Americans Think Starbucks is Overpriced

treesmiths makes a good point. Starbucks is not trying to please everybody, just like Nordstrom and Porsche. You may find out in a survey that 95% of the people find Porsche products overpriced, but guess what: they don't need 95% of the people to like their cars and are doing much better than other automakers like GM and Ford. Another point I would make is that many of those 76% that think Starbucks is overpriced are regular Starbucks customers and will continue to be. I know a few of those types myself. Caffeine is addictive! People complain but keep coming for more.
I think Starbucks has a very promising turnaround story based on cost cutting and closing unprofitable stores. You will see a shrinking top line but a growing bottom line over the coming quarters.

Preferred Stocks Get Crushed

Very typical of most posts by Bespoke. They will tell you that the house is on fire but have no clue who will put it out or when.

Annals of Pathetic CEO Communication, Moody's Edition

This bashing of Moody's is silly. First of all, they have a pretty strong disclaimer (ratings are provided as statements of opinion and not statemements of fact as to creditworthiness of issuer, are not a recommendation to buy or sell, investors should be their own studies and evaluations of credit decisions, etc etc.) that should protect them from big liabilities, like they did in the past. Rating agencies were sued following the collapse of big companies like Enron and WorldCom, and always won in court. Second, S&P did not make any model or coding error, and came up with the same AAA rating for those CPDO. Moody's stock is extremely undervalued and will come back strongly.

Don't Expect Other Bidders for Bear - Certainly Not Buffett

I never expected Buffett to bid for Bear. It appears that no other U.S. institution was big or fast enough to swallow Bear. European ones, especially Deutsche Bank, considered bidding, the problem is that the Fed would not give to non-U.S. firms the 'support' ($30 billion non-recourse loan on mortgage securities) it gave to JP Morgan. And of course, absent that 'support', no European could make a bid more competitive that the one from JP Morgan.

Garmin: Great Run, But Is That It?!

I think Garmin is a bargain at ~13x 2008 earnings and strong growth ahead. The bears are wrong saying that stand-alone GPS devices will be dead. The place you most need a GPS device is in the car, and I can't imagine people putting their iPhones or cell phones on the dashboard to use as GPS. PNDs are highly engineered products; to make a good one you need a combination of strong GPS reception, decent user interface, good display especially in daylight, good and accurate maps. Very few firms get it right: Garmin and TomTom do, Magellan doesn't. Garmin has a 50% market share in the U.S. but penetration of GPS PNDs is less than 10%, versus almost 20% in Europe. They should grow revenues more than 40% this year despite unit prices dropping 20%.

Ambac and Its Muni Bond Issue Worries (As I Foresaw)

Reggie, Ambac may be illiquid but is is not insolvent. It could be driven to bankruptcy, not because of MTM losses, which are just US GAAP fiction, but by rating agencies downgrades and loss of confidence by investors and municipalities. By the way, in my opinion they should never have been AAA in the first place.

How Google Killed Web Subscriptions

I disagree with your thesis, Google is not responsible. The newspaper industry is somewhat to blame, as they sell contect directly and indirectly through Associated Press (which is owned by newspaper publishers) to aggregators like Yahoo and Google. A subscription model cannot work for a minority of the newspapers with people having free access to most of the newspapers. I also believe that people will also be willing to pay for premium specialized online content (I have no problem paying for the online access to WSJ, Barron's, Economist). The WSJ has been the most successful paid subscription web site ever; with almost 1 million subscribers paying ~$100 per year, it will be difficult to replace those revenues with online ads.