Nom De Plum

Kit Digital: Riding the Online Video Wave

There is absolutely nothing directly comparable between On2 and Kit Digital. It's like comparing FedEx and McDonald's because they both sell things to consumers. On2 is a proprietary CoDec (Compression/Decompres... protocol that digital media is transcoded into for more efficient distribution. Kit Digital is a software platform that uploads, manages, and transcodes digital media. The Kit Digital platform would actually transcode media into On2's protocol so in many ways the two company's are complementary. However, to say that Google paid 6x Revs for On2 thus Kit Digital is undervalued is just flat out irresponsible. On2 has patents and is proprietary. Its failure was its lack of uptake with media producers similar to DivX. I don't disagree that Kit Digital is undervalued as many believe that the content management software for CDNs (Brightcove, Kit Digital, etc.) will be more important than the CDN (Akamai, Level 3, Limelight, etc.) itself.

It's Time to Think About Shorting Open Table

When you make a call like that you need to evaluate the cost to borrow the shares. At $30 I did a whole bunch of work on the company and thought it was a great risk/reward short as I believed that revenue expectations would only bet and not materialy exceeded for the next few years. However, beofre doing the work I should have inquired about the cost to borrow. There was 30%!!! interest charge on borrowing the shares. OPEN would need to hit $21 from $30 in less than a year before I even started making a penny of profit. I thought the company was worth around $18-20 so the short made no sense....and that's probably why the "borrow rate" was 30%

China Slams U.S. for Inflating Global Asset Prices

When Governments manipulate markets for nationalist reasons, it is usually a precursor to conflict. I'm not predicting WW III, but if the "Dollar Carry Trade" continues unabated for years, I predict a major international sovereign fallout. Our monetary leaders fail to understand the "Law of Unintended Consequences" and create these boom/bust cycles over and over again. Greenspan was hailed as a hero for bringing rates to 1.0% for a year to save the economy, but in the end he was villified for enabling the housing bubble...Unintended Consequences. I have not spent enough time trying to figure out what asset bubble is being created currently, but there is NO DOUBT IN MY MIND that holding rates at 0.0% for over a year will produce Unintended Consequences.

If the U.S. does not figure out a way to invest in itself and grow through internally generated cash flow and modest leverage, then our future is bleak. Transferring debt from the private sector balance sheet to the U.S. government balance sheet does not materially improve the situation we are facing and is not a viable long-term solution.

The main reason the U.S. private sector created so much debt and derivative exposure a half decade ago was because internal growth was anemic and leverage was the only way to maintian high rates of return on equity. The best solution would have been public/private partnership or massive funding to be the world leaders in alternative energy or the world leaders in biotech. This would create long-term jobs for our citizens, retrain a large percentage of the workforce from the disappearing manufacturing base to leading edge industries and allow the U.S. to maintian its leadership position for attracting capital.

I fear we missed a great opportunity that will lead to political instability. I hope I am wrong.

Implications of The Dollar Carry Trade

I remember going to the arcade and getting $10 from my mom and cashing it in for quarters. The next hour was phenomenal. I played Kung Fu, Pole Position, etc. When my money ran out, I was depressed. I looked around and all I had were fleeting memories of recent fun times. My mom saw how dejected I was and gave me another $5 in quarters. She hoped that I would spend it on a book next door or save it so that it would create something tangible for me in the future. I plowed it right back into those machines because they were awesome and I would worry about learning or occupying myself later.

If you understood this story, then you will most likely weather the turbulent economic times we are living through.

If you think I'm some nutcase posting gibberish about my childhood, then don't be surprised to wake up in the future, maybe 2012, and have the true meaning of my story hit you like a ton of bricks.

Sigma Post-Earnings Update: Staying Long, Though Concerns Remain

Looks like we got that wasteful acquisition I knew was coming because that cash was burning a hole in management's pocket. And just to insult current stockholders even more, they threw in 4M shares of SIGM stock. Clealry, management felt at these prices the stock was fairly valued. There are many other ways to structure a transaction to keep the new team incentivized other than diluting current shareholders, but SIGM management doesn't care much about its shareholders. This story has played about dozens of times in Semiconductor investing. Michael - I wouldn' be surprised if I found you recommending STEC!!! Same story, different players!!

Property Values Set to Fall 43% from Current Depressed Levels

The trend line for prices is not relevant unless you incorporate some metric for average interest rates. Price is a function of interest rates.

Weak Dollar Is the Price to Pay for Economic Growth

Manufacturing is not coming back to the US no matter where the dollar goes in the next five years. Building a plant and producing goods is a LONG-RUN investment. Managers would have to be convinced that dollar declines are in the cards for a decade or two before seriously committing major sums of capital to US manufacturing. The Chinese manipulated their currency, the US Govt is manipulating its interest rates right now. Government intervention in the private marketplace always has unintended consequences. Unfortunately, even if we elect Ron Paul for President, the US cannot control other sovereign entities like China.

Syniverse Acquires Verisign, Shareholders Celebrate

What type of research do you do before you post? VRSN has a much stronger balance sheet than SVR. FYI - You also might want to point out that SVR tends to react negatively whenever there is Telecom M&A. If an investor believes that wireless networks will continue to consolidate, then this is not a great long-term business.

Apple Has Plans to Bring CDN In-House; To What Extent Is Unknown

MikeSX....what does "$1.23" mean? How much equity value is that? How much debt does LVLT have? A stock price is only a placeholder for value. What return would AAPL extract from this acquisition in terms of reduced bandwidth costs? What would AAPL do with all of LVLT's other customers? Please stick to watching Cramer and Fast Money and not commenting on intelligent blog's such as Dan's.

The Case for Shorting Bank of America

Have you seen the yield curve??? You don't short bank stocks when the yield curve is this steep. It's like shorting a bookmaker during the superbowl. If I can borrow deposits at 0.5% and lend at many multiples higher than that, it's tough to short that kind of business. Banks won't be a short until the yield curve flattens....why do you think the subprime king Paulsen went long the sector?

Why I'm Restarting Blue Coat Systems

BCSI was down 10% becuase of the negative news out of SYMC. BCSI has two businesses WAN optimization and Enterprise Security.

Boone Pickens Seeks Investors for Hedge Funds

These guys make a mockery of the investment world and should be ashamed of the fees they have charged for merely leaching off short-term bubbles. However, if there are suckers willing to give these guys money and get ripped off on fees, more power to them. This is America.

Moore's Law for the Solar Market

I find it highly suspect that the author thinks that Applied Solar is connected to Applied Materials.

Why Netflix Is a Short

NFLX's competitve advantage was its low cost OFFLINE delivery model. This advantage disappears ONLINE. The key differentiation online will be user interface...so far MVSN and TIVO have a stronghold here.

Volt: An Employment Play

Ever heard of debt?....When a company liquidates it has to pay off creditors before shareholders. VOL definitely does not have $141M of net cash, it closer to $10M when you net out ($130M) of debt that needs to be repaid before a shareholder sees one cent. Also, book value consists of $100M of Goodwill and Intangibles, you don't get much for that in a liquidation scenario.