Salesforce Earnings Preview: 7th Consecutive GAAP Loss Expected [View article]
wait a minute...WHAT % of their current (and LT assets for that matter) are actually capitalized expenses (software & "other")? it will catch up, it always does, as soon as top line (&/or def'rd revs) slows...it's def been a tuff short...but the macro environment has slowed (Q4 GDP being FLAT never mind europe) ..it may finally b time...
Bed Bath & Beyond: Strong, Safe & Cheap [View article]
a stock is not a 'good value' just b/c it's price has declined. unless u can structure an argument for why bbby mgns will expand or top line will grow faster than the newly reduced #'s, it remains a great short...especially given people's inclination to 'invest' in stocks simply b/c their price has declined PS - balance sheet confirms the structural stress cracks even better than the P&L
Watch Liquidity Problems In Netflix Earnings [View article]
why do i care about revenue/A/P coverage? I'm not trying to be flippant...I've been watching these numbers closely as well...& i well understand that if their subs continue to slow, they've got problems... I think they must be stretching out payments from the growth in A/P and the admission last year that they needed to raise $400mm to make their vendors more comfortable...but i'm just not sure when that's going to catch up to the company and subsequently the stock... thks for your help on this...
Did Square Stick A Fork In VeriFone? [View article]
But square sure sounds secure enough when u read their website or read independent reviews and not listen to their competitor: http://bit.ly/TcrAU8
& PAY bought 5 cos. since 8/11, it seems to me, as a way to keep up with innovation. Are they running to catch up or are they leading the charge? The GlobalBay acquisition, for example, provides customers with the ability to be mobile and use an apple device b/c not all customers want that 'fixed' platform. & It just makes sense, to me, for a retailer to be able to use an ipad that can serve so many other functions rather than be locked into a proprietary system, never mind the price differential. The inventory tracking systems between the various companies is key too. According to each, they have the better reporting & therefore better solution for inventory optimization ie: reducing costs. I'm not sure which is better right now, but writing apps to the apple platform would seem a more open, more widely understood choice. This is really where the greater cost benefits can be derived & customers will look closely at what each has to offer. The larger the PAY customer, the greater drive they'll have to reduce costs & increase convenience sooner rather than later. No business is SO entrenched that they will not constantly re-evalutate solutions. Especially if they are looking at having to renew a contract. PAY is in the awkward position of NECESSARILY having to transition their business model and that is just never a good thing for margins...this is disruption...& it tends to end badly for the company that has the market share to lose. The acquisitions have also made it difficult to determine the true growth rate of this company other than what is stated. & specifically from pg 18 in the last Q, the company stated, "Other revenues and earnings contributions from Hypercom were not separately identifiable due to our integration activities". I might be tracking that if I were PAY so that I would know what was selling well and what was not. Wouldn't you? There are a few other fuzzy points. They have $1.16billion in goodwill and the $749mm of purchased intangibles, but state, again from the Q, that they have "accumulate goodwill impairment losses of $372.4mm and $65.5mm in our International and North America segments..." I don't know, maybe that's ok? But I mean, if they're not tracking the acquisitions separately, how do you know you've overstated their value? & then the $153mm of prepaids is significant b/c it grew 20% over the last 9months while expenses grew only 2%. Have they been overstating margins? It's something to keep an eye on, if you own a company with a biz model in transition.
That said, the CEO, Bergeron recently said their ASPs on their hardware have been increasing which I found amazing. & their services revenues have been increasing as a % of sales. But I think the discounted P/E investors give this stock is for some of the concerns I've raised above. The analyst who recently upgraded the stock says the company knows it must report a "clean" and "transparent" Q in order to improve it's stock price...which of course means that investors feel these last few Q's have not been clean nor transparent.
everybody sees the looming expenses...most of them anyway... it's aLL about sub adds b/c it's all about margin expansion right? NFLX was supposed to add 7mm subs this year...stock dropped when they had to dampen expectations of sub adds during the last canned Q report...when u can't extrapolate sub adds out to 2015, you can't expect the margin compression to turn around and become margin expansion ie: increased EPS. U might be able forgive the addt'l expenses related to rev growth (int'l sub adds) but not the slow down in existing b/c those expenses, the ones that everyone keeps harping on, are sTill coming... & those expenses do not always cover distribution overseas...those are brand new contracts with brand new $$ to be necessarily invested. So where's the leverage in this biz? & everybody knows increased competition will bid up the prices of incremental contracts...casting greater doubt on margin expansion as well... They paid $200mm to Epix for exclusive rights and 75% of that for non-exclusive. So now they have what AMZN has, only AMZN is cheaper. Then there was that curious appendix given at the March Q report: "Mathematical illustration of increased seasonality of net additions, given stable seasonal patterns in gross additions" I am just too dumb to understand the mathematical sophistication of increased churn i guess. Bottom line is, how many subs will they add this Qtr? If you think they'll add more than 7mm u buy the stock. Penetration rate is relative to "TV'd households" not individuals...so at 29mm subs they've penetrated 35-40% of the US...& I feel confidant more have had it and churned off or decide to churn on and off as they see fit. The only other lever for margin expansion -other than adding subs, which is also unclear b/c of the variable component of some of their more recent contracts- is raising prices of course. Given all this, I could probably at least make the argument that they don't deserve a premium P/E.
Netflix's Upcoming Earnings Report - A Preview Of The Main Attraction [View article]
The last insider buy was before May 12th, 2012 as far as I can glean. Then they reported the June Q which included guidance for slowing sub growth and increasing expenses & the stock dropped. In other words, they were really bad buys & I don't see any insiders dipping their toe in the water this time around...
Why Google Will Win The Tablet Battle [View article]
just spoke to someone re: nexus...he can't wait to upgrade....he's not even sure it's a phone but all devices are 'jailbroken' then use wifi..droid has 500k apps vs. the 100k on my iPhone...why? i asked...'steve' he responded...it's the cool kids upgrade & did Jobs 'pc' himself again? ..goog has usurped the new new iPad or iphone or whatever is the 'leader' in innovation at this stage....goog has caught up... & glass...what of it? it is the vision...not the final answer...i own both but at this point, mio amico Galilei i will own more goog...innovation = premium & most readers are deep aapl.
u only do fraud? that's too bad...for me. nono not fraud...just bumping up against the lines of ethical goodness... from peeps much smarter than myself.. http://bit.ly/Jbbh5I
& stuff like this: "Netflix (NFLX) shares fell Monday after the company late Friday announced a lawsuit settlement retroactively applied to its recently announced Q4 results...The company didn't expect to pay the claim and so none of the $9 million "had been accrued prior to the mediation and settlement," the company says in the SEC filing." & this: "After retaining KPMG as its accounting firm for a decade, Netflix has dismissed the firm ...While spokesman Steve Swasey thanked KPMG “for their many years of service,” he would not comment on the cause of the change." Swasey has since left.... & the recent purchase by insider Jay Hoag is coincidentally timed with the day the loan he made (thru TCV) to NFLX can convert to common...but he can't convert unless the stock trades at an avg of $111 for 50 of the previous 65 trading days to that 5/28 covert date. The average, on this heavily shorted stock, is in the $90's... There's more...investigations, audits, lawsuits, restatements...so i guess my stupid ques is: when does misrepresenting or manipulating truth cross the line and become fraud? I realize I'm hounding you on a stock other than the one you've written about above!! But hey...Sam...I mean...WHaT have you done for us lately?
been quietly appreciating your work here...thk u for it...i was short b4 but you helped keep me from blinking. would love to hear your thoughts (ie get your help) on nflx. i appreciate bal sheets more than most & there's a whole lot happening on theirs that your expertise cud shed bright light on. i'm short it as well... u know...in ur free time...
What Does Netflix's $14,500,000 Insider Purchase Mean? [View article]
Jay Hoag cofounded Tech Crossover Ventures. Barry McCarthy (former CFO of NFLX) became an advisor there after he left NFLX. TCV loaned NFLX $200mm in exchange for "zero coupon senior convertible notes due on December 1, 2018" I'm sure TCV would like to convert into common. But the stock will need to trade higher for them to do so.
From the most recent 10Q: At any time following May 28, 2012 , the Company may elect to cause the conversion of the Convertible Notes into shares of the Company’s common stock when specified conditions are satisfied, including that the daily volume weighted average price of the Company’s common stock is equal or greater than $111.54 for at least 50 trading days during a 65 trading day period prior to the conversion date.
Salesforce Earnings Preview: 7th Consecutive GAAP Loss Expected [View article]
Bed Bath & Beyond: Strong, Safe & Cheap [View article]
PS - balance sheet confirms the structural stress cracks even better than the P&L
Watch Liquidity Problems In Netflix Earnings [View article]
I think they must be stretching out payments from the growth in A/P and the admission last year that they needed to raise $400mm to make their vendors more comfortable...but i'm just not sure when that's going to catch up to the company and subsequently the stock...
thks for your help on this...
Did Square Stick A Fork In VeriFone? [View article]
http://bit.ly/TcrAU8
& PAY bought 5 cos. since 8/11, it seems to me, as a way to keep up with innovation. Are they running to catch up or are they leading the charge? The GlobalBay acquisition, for example, provides customers with the ability to be mobile and use an apple device b/c not all customers want that 'fixed' platform.
& It just makes sense, to me, for a retailer to be able to use an ipad that can serve so many other functions rather than be locked into a proprietary system, never mind the price differential.
The inventory tracking systems between the various companies is key too. According to each, they have the better reporting & therefore better solution for inventory optimization ie: reducing costs. I'm not sure which is better right now, but writing apps to the apple platform would seem a more open, more widely understood choice. This is really where the greater cost benefits can be derived & customers will look closely at what each has to offer.
The larger the PAY customer, the greater drive they'll have to reduce costs & increase convenience sooner rather than later. No business is SO entrenched that they will not constantly re-evalutate solutions. Especially if they are looking at having to renew a contract.
PAY is in the awkward position of NECESSARILY having to transition their business model and that is just never a good thing for margins...this is disruption...& it tends to end badly for the company that has the market share to lose.
The acquisitions have also made it difficult to determine the true growth rate of this company other than what is stated. & specifically from pg 18 in the last Q, the company stated, "Other revenues and earnings contributions from Hypercom were not separately identifiable due to our integration activities". I might be tracking that if I were PAY so that I would know what was selling well and what was not. Wouldn't you?
There are a few other fuzzy points. They have $1.16billion in goodwill and the $749mm of purchased intangibles, but state, again from the Q, that they have "accumulate goodwill impairment losses of $372.4mm and $65.5mm in our International and North America segments..." I don't know, maybe that's ok? But I mean, if they're not tracking the acquisitions separately, how do you know you've overstated their value?
& then the $153mm of prepaids is significant b/c it grew 20% over the last 9months while expenses grew only 2%. Have they been overstating margins? It's something to keep an eye on, if you own a company with a biz model in transition.
That said, the CEO, Bergeron recently said their ASPs on their hardware have been increasing which I found amazing. & their services revenues have been increasing as a % of sales. But I think the discounted P/E investors give this stock is for some of the concerns I've raised above. The analyst who recently upgraded the stock says the company knows it must report a "clean" and "transparent" Q in order to improve it's stock price...which of course means that investors feel these last few Q's have not been clean nor transparent.
Netflix: Sell, And Go Away [View article]
it's aLL about sub adds b/c it's all about margin expansion right?
NFLX was supposed to add 7mm subs this year...stock dropped when they had to dampen expectations of sub adds during the last canned Q report...when u can't extrapolate sub adds out to 2015, you can't expect the margin compression to turn around and become margin expansion ie: increased EPS. U might be able forgive the addt'l expenses related to rev growth (int'l sub adds) but not the slow down in existing b/c those expenses, the ones that everyone keeps harping on, are sTill coming...
& those expenses do not always cover distribution overseas...those are brand new contracts with brand new $$ to be necessarily invested. So where's the leverage in this biz?
& everybody knows increased competition will bid up the prices of incremental contracts...casting greater doubt on margin expansion as well...
They paid $200mm to Epix for exclusive rights and 75% of that for non-exclusive. So now they have what AMZN has, only AMZN is cheaper.
Then there was that curious appendix given at the March Q report: "Mathematical illustration of increased seasonality of net additions, given stable seasonal patterns in gross additions" I am just too dumb to understand the mathematical sophistication of increased churn i guess.
Bottom line is, how many subs will they add this Qtr? If you think they'll add more than 7mm u buy the stock.
Penetration rate is relative to "TV'd households" not individuals...so at 29mm subs they've penetrated 35-40% of the US...& I feel confidant more have had it and churned off or decide to churn on and off as they see fit.
The only other lever for margin expansion -other than adding subs, which is also unclear b/c of the variable component of some of their more recent contracts- is raising prices of course.
Given all this, I could probably at least make the argument that they don't deserve a premium P/E.
Netflix's Upcoming Earnings Report - A Preview Of The Main Attraction [View article]
In other words, they were really bad buys & I don't see any insiders dipping their toe in the water this time around...
Why Google Will Win The Tablet Battle [View article]
newnews i know...
Why Google Will Win The Tablet Battle [View article]
& glass...what of it? it is the vision...not the final answer...i own both but at this point, mio amico Galilei i will own more goog...innovation = premium & most readers are deep aapl.
Really, Green Mountain? [View article]
nono not fraud...just bumping up against the lines of ethical goodness...
from peeps much smarter than myself..
http://bit.ly/Jbbh5I
& stuff like this:
"Netflix (NFLX) shares fell Monday after the company late Friday announced a lawsuit settlement retroactively applied to its recently announced Q4 results...The company didn't expect to pay the claim and so none of the $9 million "had been accrued prior to the mediation and settlement," the company says in the SEC filing."
& this:
"After retaining KPMG as its accounting firm for a decade, Netflix has dismissed the firm ...While spokesman Steve Swasey thanked KPMG “for their many years of service,” he would not comment on the cause of the change."
Swasey has since left....
& the recent purchase by insider Jay Hoag is coincidentally timed with the day the loan he made (thru TCV) to NFLX can convert to common...but he can't convert unless the stock trades at an avg of $111 for 50 of the previous 65 trading days to that 5/28 covert date. The average, on this heavily shorted stock, is in the $90's...
There's more...investigations, audits, lawsuits, restatements...so i guess my stupid ques is: when does misrepresenting or manipulating truth cross the line and become fraud?
I realize I'm hounding you on a stock other than the one you've written about above!! But hey...Sam...I mean...WHaT have you done for us lately?
Really, Green Mountain? [View article]
would love to hear your thoughts (ie get your help) on nflx. i appreciate bal sheets more than most & there's a whole lot happening on theirs that your expertise cud shed bright light on. i'm short it as well...
u know...in ur free time...
What Does Netflix's $14,500,000 Insider Purchase Mean? [View article]
I'm sure TCV would like to convert into common. But the stock will need to trade higher for them to do so.
From the most recent 10Q:
At any time following May 28, 2012 , the Company may elect to cause the conversion of the Convertible Notes into shares of the Company’s common stock when specified conditions are satisfied, including that the daily volume weighted average price of the Company’s common stock is equal or greater than $111.54 for at least 50 trading days during a 65 trading day period prior to the conversion date.