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Waldo Mushman

Waldo Mushman
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  • Undisclosed Insider Activities At 21Vianet Group [View article]
    The implications of undisclosed relationships primarily point to fraudulent revenue and assets. I haven't looked closely but the predictable trend is to see receivables heading north fairly rapidly and the controlled sub to provide high growth rates. If the author gets copies of the SAIC's for the subs it should become evident if they are actually responsible for purported sales.

    You will also see that the Chinese audit firm for the SAIC filings will be the same firm for the controlled subs as the parent and the intercompany numbers will be eerily/suspiciously precise.

    John
    Sep 18 11:53 AM | 1 Like Like |Link to Comment
  • NQ Mobile Looks Like A Tasty Short After Running 15% Friday [View article]
    Read the client list for Pinchuk and the companies Bernstien has been involved with in the past. Birds of a feather.

    Problem remains that they will remain compliant for another year at least and continue to bilk the American investors. Years of experience offers skill sets that work like a charm.

    Just a tough game to play the short side against well heeled corrupt professionals.

    John
    Jul 20 08:02 AM | 4 Likes Like |Link to Comment
  • Behind The Scenes With Dream Team, CytRx And Galena [View article]
    Rick -

    Brilliantly done. The saying that you don't want to watch them make the sausage might be an appropriate metaphor. Many seem to miss the forest for the tree. GALE is not the story. The corrupt process of winning the hearts and minds of the investment community and the financial implications is the scandal.

    It is transparent to me that favorable press exists for the sole purpose of exaggerating (maximizing??) market values of a publicly traded entity. That premium is extracted from the dim witted and the trusting. America can't be in too bad shape financially if we can continue to crank out these all-day-suckers anxious to piss away small fortunes on Jack and the Beanstalk fables.

    What ought to really eat at the GALE supporters is the minimum wage touts they were using. $300.....????.


    John
    Mar 13 11:30 AM | 6 Likes Like |Link to Comment
  • Kinder Morgan Partners: Hedgeye's Error Could Cost You [View article]
    Hedge Eye is probably right about the maintenance being understated but the problem is that it makes little or no difference. There is not a lot of wear and tear on thick metal pipes in the ground. The items that require attention are mainly the surface equipment such as pumps, separators, diverters.... The operator is quite likely to replace many of those very expensive components as they reconfigure or expand existing facilities. You are also seeing many new lines with expanded capacity replacing older, smaller lines.

    The company may have booked the earlier repair costs as capital or did less than maximal maintenance but those "sins" are erased with the salvage and replacements. You are also worrying about 3 or 4% of the distribution so it seems trivial to me.

    LINN is a different (and very ugly) story. KMP has a fee structure that IMHO puts it in the mid range of the pipelines.
    The threat to MLP's is not the short sellers it is the House Ways and Means committee.
    John
    Sep 18 09:36 AM | 5 Likes Like |Link to Comment
  • Sina Is As Good As It Gets [View article]
    The collapse of maybe 10 VIE's already should be instructive. The core businesses revert to Chinese ownership, the options and management contracts are voided and the US investors have zip. The outright frauds and criminal accounting practices hasn't created much in the way of reciprocity.

    Worth remembering that VIE's were pioneered by Enron and absent the FASB regs attempting to solve the Enron issues these companies would not exist as US traded stocks. It is also worth remembering that the VIE has no direct ownership of anything in China. The VIE owns an option and has a management contract. The US entity cannot ever exercise the option because it is against the Chinese law for non-nationals to own regulated industries. The SINA option can never be exercised to actually own any assets in China.

    John
    Sep 9 01:09 PM | Likes Like |Link to Comment
  • Sina Is As Good As It Gets [View article]
    SINA uses an ownership structure known as a VIE. Recent Chinese court determinations call into question whether these structure are legal in China and the threat very clearly exists that all VIE's will be dismantled.

    China is a bucket of worms and VIE's are the wormiest. I recommend you refer to Paul Gillis and his blog which talks and loudly warns against VIE's.

    Be extremely cautious. This could be a total wipe out.

    John
    Sep 7 03:44 PM | Likes Like |Link to Comment
  • Linn Energy: Market Does Not Like The Quarterly Results [View article]
    It has been extensively written that ideas that are beyond the understanding of the reader are demonized. (See ....Witches+ Salem) Appropriate that your nick is a prehistoric fish from the lightless deep. Suggesting collusion or manipulation is a tad out of touch.

    How good a company is LINN using standard O&G metrics? Dividends and tax benefits may convince you it is a good investment but any rational viewing of the company and it is clear it is a very poorly run O&G company. The assets it holds are marginal at best. Many publicly traded companies offer more value-growth-ROI-safet... credibility. You have been told it is good but have nothing other than your boosterism to support that contention.


    John
    Aug 9 12:04 PM | 1 Like Like |Link to Comment
  • Linn Energy: Market Does Not Like The Quarterly Results [View article]
    Probably should just keep my mouth shut about LINN but this sort of article is exactly the sort of pollyanna nonsense that keeps everyone around looking for the pony. "Only 20% cut" - "worst case". I see 50-60% drop and I wonder why anybody sticks around. Just standing aside for 6 months will prove to be a brilliant play.

    1. Distributions will go down since they will no longer use borrowed money to create DCF.
    2. The SEC will require LINN to make the transactions with the Puts transparent and clearly explain the economic trail. The reality of juiced returns in the past will become evident.
    3. The class action suits will be successful if for no other reason than LINN stock went down once the accounting practices were fully disclosed. Doesn't matter what is GAAP, the fact that LINN is the only player to book DCF this way is damning. Won't be a major ding but it will sting.
    4. BRY is problematic at best. Plenty of time to stand aside and return if and when it occurs. Not that BRY is much of an oil company but they are a giant step up from LINN. Absent the BRY deal you are looking at some significant revenue drops assuming static pricing.
    5. Mentioning H wells is misleading. In many situations the effective cost per proven bbl a resevior is much higher with H wells. H wells don't create new reserves it is merely a method to access reserves that aren't economic otherwise.
    6. It appears that the hedging activities going forward will be more in line with common industry practices. That should translate into a significant hit to the DCF.

    As a general opinion I cannot understand the attraction to E&P MLP's. As an investor in a standard C corp the shareholders benefit from the same tax advantages (derivatively) as the MLP. MLPs seem far better suited to pipelines (my preference).

    It should be clear to every LINN shareholder that you didn't understand what management was doing with the puts. It is obvious that many still don't appreciate the impact of the circular funding. It is not merely some small fraction of the top line...it is a major portion of the bottom line.

    John
    Aug 9 11:03 AM | 2 Likes Like |Link to Comment
  • Why The Shorts Are Wrong About Linn Energy [View article]
    The wounded party is indeed the shareholder but the damage is done by Linn. Absent a convoluted and thoroughly misrepresented DCF fantasy there would be no price drop. It is unfortunate that you (seemingly) have lost money but the reality is that many more investors will benefit from a better understood company. Would you have invested in a company that was paying dividends with borrowed money? That reality is now apparent based solely on the efforts of the critics.

    You may not like people saying it but this kid is ugly.
    Jul 16 12:37 PM | Likes Like |Link to Comment
  • Why The Shorts Are Wrong About Linn Energy [View article]
    Upfront? Excuse me but paying 2.00 in excess put premium that you return as cash flow is not explained. Yes they explain the parts but never the purpose. (Which remains the giant red flag) Linn DID buy the puts ITM and they continue to do so.

    I was an owner of Linn until they started this nonsense. Buying puts was a brilliant hedge when NG was trading around $10.00. And the hedge cost was maybe 10% of the contract. Paying $2.50 for a put is poor money management and is downright stupid (deceptive) when it is borrowed cash. Remember that the current price of NG is ~3.50 and a protective hedge is meant to insure that the current market price is received when you deliver the gas.

    This is exactly what options are NOT for. Using your logic they should borrow more money and buy the $10.00 strike. To really jack up the payout they could buy the $20.00 strike and quintuple the payout.

    John
    Jul 16 12:21 PM | 1 Like Like |Link to Comment
  • Why The Shorts Are Wrong About Linn Energy [View article]
    Very puzzling -

    Can't you find an MLP that is a straight shooter? No one even attempts to suggest that the ITM put buying is a good idea. Seems fairly obvious that the entire ploy has the sole purpose of manipulating payouts.

    Do you really want to be a holder when they discontinue the portion of the payout that is prepaid put premiums?

    John
    Jul 16 11:13 AM | 1 Like Like |Link to Comment
  • Linn Energy: Don't Believe The (Negative) Hype [View article]
    YIKES -

    Writ large before us is exactly the reason why most investors are boobs. As the most idiotic comment that dooms the commenter to failure do you prefer #1..."Staying and Praying" .....or #2 "Stuck now"...?

    And writ equally large is the silence of Elliot Gue who should be making it clear to all the readers that he was dead wrong and Linn is probably going to slowly...but almost certainly.... implode.

    John
    Jul 2 11:07 PM | 4 Likes Like |Link to Comment
  • Illegal Products Could Spell Big Trouble At Lumber Liquidators [View article]
    Now I am being dismissive. Your silly DTPA won't get anywhere and LL probably has 10 of those sort of cases filed every week. Most retailers recognize these nuisances as a part of doing business. Irate customers with an inflated sense of importance clog the legal system with petty complaints and they are routinely tossed out.

    I wish you the best and I hope you get some satisfaction but your activities will go totally unnoticed by the market, the shareholders and probably LL itself. The stock remains an indifferent short sale.

    John
    Jun 25 02:28 PM | 3 Likes Like |Link to Comment
  • Illegal Products Could Spell Big Trouble At Lumber Liquidators [View article]
    XZ -

    I am afraid I am a bit jaded. Dealing with some of the Chinese stocks that didn't even have a business was eye opening. LL seemingly has real stores and real money. Contrast that starting point to Sino-Forest who didn't actually own any forests. Regulators are relatively indifferent to outright fraud so poor product quality is unlikely to wind them up. If poor products were of great import half of the NYSE names would be zeros.

    John
    Jun 23 10:25 AM | Likes Like |Link to Comment
  • Illegal Products Could Spell Big Trouble At Lumber Liquidators [View article]
    My point is to show how easily the charges can be refuted with some simple PR. The underlying financial realities will not be itemized and will very likely sink into some sort of suspense fund - amortized over 4 or 5 years.

    I looked at the name as a possible short and it seems to be a fairly weak play. LL is very unlikely to see any material revenue drop due to this issue. It is also unlikely that any litigation will get traction. I expect that the macro issues of new home count, sales per store, operating margins, etc will drive this train and the problems you identify are predictive of a JCP type descent into mediocrity. In 34 years.

    And I think you misunderstand - they aren't going to test a damn thing. They are going to say the did and who is going to call them out on it? Next we can start a national movement against Dairy Queen for under sprinkling the Jimmies.

    Hopefully I am not sounding overly dismissive but suggesting BK and a rain of consumer fury is a bit overwrought. Equally unlikely is any material impact on either the top or bottom line based on regulatory enforcement. The key reason this doesn't work as a short is that they can be brilliantly successful without the formaldehyde. That chemical is not a key ingredient to anything they do and they can (easily) and will (quickly) eliminate that concern.

    John
    Jun 21 10:31 PM | 2 Likes Like |Link to Comment
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