Send Message
View as an RSS Feed
  • A Pandora Short Could Still Reap 50% Gains  [View article]
    I dunno guys, it's been going up. The author's article calling for a 50% downside perfectly coincided with a bottom. Up 20+% since. I think it'll stay at these high levels for another month or 2, but long term this is still a short. I wouldn't want to hold it before or after earnings.
    Jun 13, 2014. 09:44 AM | Likes Like |Link to Comment
  • A Pandora Short Could Still Reap 50% Gains  [View article]
    All fair points, thanks. I'll try to play this long for a month or two, but you may very well be right, especially in the long run.
    May 12, 2014. 03:08 PM | 1 Like Like |Link to Comment
  • A Pandora Short Could Still Reap 50% Gains  [View article]
    First, you can't pay attention to anything the analysts say, it's absolutely useless. They're not there to analyze the stock properly, they're there to help connect investors to senior management and pump up the stock in some cases.

    Second, why would Pandora care if they own the OS in the car, or whether users stream via bluetooth? The point is, someone is listening to their music and generating high-paying localized targeted ads, as opposed to the irrelevant terrestrial radio ads. Pandora wants more people to play these ads in the future, and they will be serving many more ads.

    Third, yes the stopping of monthly metrics was a terrible move, and obviously the new subs growth came to a halt. But this all happened already, a few months ago. You can't continue to value the future Pandora with old news like this. You have to look at this stock from both sides.
    May 12, 2014. 11:44 AM | Likes Like |Link to Comment
  • A Pandora Short Could Still Reap 50% Gains  [View article]
    I see this argument as 100% valid, but maybe just a little incomplete. Despite the losses and a ridiculous valuation, the share price is completely based on business after 2016 and a potential buyout atop a very active M&A cycle.

    Again, I agree with all of the above points, but just to play devil's advocate:
    - After a 50% drop, the chances of a strong short term rebound increase exponentially. So do chances of a buyout for those that were on the fence only a few months ago.
    - P has a unique ability to serve local, relevant, tailored targeted ads to people driving around in their cars
    - The still have many levers to pull to jack up revenue. Their advertisement per hour of listening is a small fraction of terrestrial radio, and can be increased without major backlash.

    I think shorting with a 3-6 month horizon is a very risky move at this point. Perhaps picking up some long dated call is a better move temporarily.
    May 12, 2014. 10:27 AM | Likes Like |Link to Comment
  • Part V: Hedged Convexity Capture Continues To Be The World's Best-Performing ETF Strategy  [View article]
    This strategy will clean out your account if we head towards higher rates and lower equities. It suffers from the sample period bias. If we experience even a fraction of the equity volatility and rocketing treasury yields of the early 80's, both of these ETFs will shoot up simultaneously and you're done.

    Similar returns (albeit with slightly higher sigma) could've been achieved by just going long TNA or similar levered ETFs in the same period.
    Mar 27, 2014. 12:22 PM | 6 Likes Like |Link to Comment
  • Pandora the latest company to benefit from Icahn rumors  [View news story]
    dgulick, these are all great points, thanks!

    I was referring to Apple's 20MM iTunes radio listeners to Pandora's ~ 70MM by saying it was 2/7th, but wasn't implying that Apple stole all of those listeners. In fact, yesterday's Cannacord paper showed that only 8% iRadio users jumped ship from Pandora so far. And third to a half are basically evaluating both platforms as we speak. Remember that it has been a month since launch. Obviously iTunes can't continue this pace of growth, but they'll likely make a dent in Pandora's limited US growth.

    I definitely see your case for an MSFT buyout, especially given the reckless Skype acquisition. That's probably one of the major factors keeping the stock at these levels. However, this just doesn't seem to be the uncomfortable taking of a chance that Icahn gets himself into. All the firms you mentioned had a proven track record of sustained profitability and were either poorly operated or grossly undervalued, but the profitability was always there. Pandora is not at a dip like NFLX, has no profits, has a short history in an evolving market and he already owns one of the competitors.
    Oct 29, 2013. 04:40 PM | Likes Like |Link to Comment
  • Pandora the latest company to benefit from Icahn rumors  [View news story]
    Why would Icahn buy an unprofitable company with no competitive advantage, terrible cost structure, uncertain future...that's trading at its high? A $5B internet radio station that only stays afloat due to its users that refuse to pay. There is absolutely no freaking way. What's he going to do, fire board members and replace it with his own people who could negotiate better royalties?

    Look at the rosiest projected future cost structure. Let's say in 2016, Pandora finally gets a 30% break on its royalties. What happens to the user base though? You have Google, Apple, iHeart, Spotify, Rdio, etc shooting from every direction. They're growing, too. And all of them are doing it internationally, which Pandora is not. It's naive to think the same user growth will be there, and it's certainly stubborn to extrapolate the current ad revenue growth per all those users. Free listeners are not loyal, they have zero switching costs with the exception of building a new playlist, they'll jump to the next best thing in a click of a button.

    Oh btw, Icahn just took up a giant stake in AAPL. Apple! You know, P's newest free/premium radio streaming competitor with more cash than it's possible to spend? The one that effortlessly acquired 2/7th the size of Pandora's user base w/ zero marketing dollars. Why would Icahn invest in both? I just don't see it.
    Oct 28, 2013. 12:18 AM | 1 Like Like |Link to Comment
  • Pandora (P -4.1%) bleeds for the second day in a row (previous) on concerns about iRadio's impact. CFO Mike Herring's efforts at a BofA/Merrill conference to downplay the threat aren't doing much to help. A Bloomberg report claiming Apple is ramping its iRadio ad sales efforts and will share ad revenue with studios (apparently in return for playback options not supported by rivals) could be adding to the pressure. Will Apple disrupt Pandora in a way that Spotify, Amazon, Google, Sony, Microsoft, TuneIn, and Songza have thus far failed to?  [View news story]
    Pandora's $2.5B valuation is based on growing its free users who aren't willing to spend $3/month to support it. The company doesn't license any of its patents. Anyone can step in and make better services. In addition, Pandora shot itself in the foot by locking in some of the steepest royalties in the streaming world. To pile on, it's celebrated algorithm isn't all it was praised to be a few years ago. We all know how limited and repetitive our playlists have become, and how we can't stand those 6 skips per station rule.

    When Apple steps into streaming with its 500MM iTunes subscribers, it will absolutely crush Pandora with native device playback, larger catalog and marketing muscle. If Apple decides to offer free streaming, P will be wiped off the map.

    Google isn't too far behind, only thing holding it back is the lack of users already using Play for music. Pandora is being shot at from every direction. It's only hope is M&A, and it doesn't look like there are many suitors willing to pay ~ $4B for a mostly ad-supported music service these days.
    Jun 4, 2013. 03:16 PM | 2 Likes Like |Link to Comment
  • What's going on with AMD (AMD +14.4%)? The chipmaker's shares have taken off on volume that's 5x its daily average, even though no major news has hit the wires. Wells Fargo (Outperform) wrote this morning AMD has launched two new chips for its high-end FX desktop CPU line, and that its CPU pricing seems to be stabilizing, but it seems unlikely that's responsible for today's huge move. 16.9% of AMD's float was shorted as of April 15. Update: As SA commenters note, Intel buyout rumors appear to have played a role. Considering the antitrust issues, this rumor is even harder to swallow than the ones about Samsung and Qualcomm[View news story]
    Three days of large, consistent up moves, hit a tipping point today and saw a humongous short squeeze after lunch. The report last week was encouraging, clearly the company is full steam into the post-PC strategy. Fears of running out of cash are subsiding, management team is regaining trust. With all of that, I'm sure some big players stepped in this afternoon as well.

    It's hard to explain why the exact timing, but let's face it, this stock had too much of a negative sentiment, with too much potential and good news on the horizon. It was a matter of time before a breakout day.

    Oh btw, it's a $2B established US chipmaker. Just say that outloud and think about how ridiculous that sounds in the long run.
    May 1, 2013. 04:29 PM | 1 Like Like |Link to Comment
  • AMD To Post Another Difficult Quarter With Dismal PC Sales  [View article]
    Thanks for the analysys, very insightful and agreed earnings are looking dismal at this point. However, I think that this quarter, more than ever, the main focus will be on the outlook and management comments on AMD's plans for post PC products. If they project out early expected revenues from PS4 and Xbox 720 sales, Adobe revenues and such, and show at least some positive tick in revenues the stock is taking off. Otherwise, might get real bad.
    Apr 16, 2013. 03:42 PM | Likes Like |Link to Comment
  • Dell's (DELL -0.9%) LBO proxy will show "the extreme challenge and unpredictability" the company is facing in its badly slumping PC business, David Faber reports, while adding a forecast for $3.7B in FY14 (ends Jan. '14) operating income may be significantly revised lower. Faber also notes Silver Lake initially bid just $11.22/share for Dell, before gradually raising its offer to $13.65. Dell is down $0.12 today to $14.14. (previous[View news story]
    Dell went from having the most desired to most despised consumer and business PCs and service. It tried to copy IBM's mini-me through a series of ill-timed acquisitions without a strong plan. The firm is a mess, and since these proxies are required to be mostly factual by law w/o any forward looking statements, I can totally see how ugly the company really looks.

    There's no room for it in public markets, it'll get destroyed. Shareholders should indeed be happy with what they're getting, cause it ain't getting better going forward. The right plan is to take it private, chop off the ugly parts, create good LT strategy, sell off parts of business that don't fit.
    Mar 15, 2013. 01:18 PM | Likes Like |Link to Comment
  • Apple (AAPL +1.7%) rallies as the Street takes the launch of Samsung's (SSNLF.PK) Galaxy S IV, which has an impressive spec sheet but has seen mixed early reviews, in stride. Apple's sell-side fans are circling the wagons, with Gene Munster comparing the S IV to an 'S' iPhone launch. Nomura is less sanguine: noting the popularity of bigger displays and stating its checks indicate a bigger iPhone won't arrive in 2013, it thinks Samsung could overtake Apple in high-end smartphone shipments this year on the back of 35M-40M S IV and Note sales per quarter.  [View news story]
    Both companies are really struggling to do something new and unexpected. I'll go out on a limb and say that the next true "innovative" smartphone will come from the Google/Motorola camp. They clearly see the value of an ecosystem and standardization as evidenced by Apple over the last 6 years, yet Google is the only company that's left with any sort of vision and creativity (i.e. glass).

    Btw, Tim Cook needs to go. Only question is who's the best replacement. Apple lost so much momentum and played a very conservative hand when they should've been coming out guns blazing. They've been focusing too much on non-revenue generating activities in existing products (factoriy conditions, supply chain, publicity, government).

    Bottom line for AAPL: Ive for CEO. Introduce that "fourth" post-PC evolution device and make your competitors look bad like you used to.
    Mar 15, 2013. 11:23 AM | 1 Like Like |Link to Comment
  • Neither PlayStation Nor Windows Tablet Will Turn Around AMD  [View article]
    I disagree on the console turnaround, but agree that the windows tablet business is doomed. Windows tablet sales are in the low millions a few months after release. PS4 sales will be in the tens of millions a few weeks after release. The sales will be consistent throughout the first year or so. PS4's also use more valuable components than any tablet would. Looking from a very high level, the PS4 could reasonably bring in a fresh few billion in revenues this year alone, nothing to laugh at.
    Feb 25, 2013. 08:23 AM | Likes Like |Link to Comment
  • Microsoft (MSFT) will charge a hefty $899 for the 64GB version of Surface Pro, and $999 for the 128GB version. Touch/type covers are sold separately. There's a good chance Surface Pro will be seen as just one name in a sea of Windows 8 Pro tablets and convertibles, especially since its use of an Intel (INTC) Core i5 CPU has made it a little thicker/heavier than models running on Intel's Clover Trail. Meanwhile, Digitimes is reporting Microsoft has cut its Q4 Surface RT orders in half to 2M  - that's a negative for NVDA. (NPD data[View news story]
    Nobody is sitting around waiting for Win 8 tablets, come on. Consumers are buying iPads. Businesses (majority of which are still on XP) are still slowly upgrading to W7 and basic, cheap hardware when not virtualizing. MSFT is about to get a reality check bitchslap in Jan when it reports.
    Nov 29, 2012. 02:43 PM | 1 Like Like |Link to Comment
  • A German site has leaked pricing for the Windows 8 Pro versions of Microsoft Surface (MSFT). The 64GB Surface Pro will reportedly have a local cost of €809 ($1,027) after including VAT, and the 128GB a cost of €909 ($1,160). At those prices (well above Surface RT's), Surface Pro, which uses an Intel Core i5 CPU, is likely to be a niche product. Especially since many OEMs are releasing cheaper and thinner (albeit less powerful) Windows 8 Pro devices based on Intel's Clover Trail Atom CPU.  [View news story]

    Cut pro to 2MM orders. Ouch, and that didn't take long.
    Nov 29, 2012. 02:30 PM | Likes Like |Link to Comment