Posts Tagged ‘IPO’

Fabulous Friday – Our AliBaba Play Pays off Big!

We're already up over 100% on Alibaba.

How, you may wonder?  Well, two ways:  Back in October of 2007, before Alibaba IPO'd in China, I was touting the company when it had an $8Bn valuation ($1.10 per  share – pre-split).  I was the first and only analyst in the US to point out the benefits of Yahoo's investment back then and our Members who play the Asian markets were able to take advantage of that and today should be the culmination of the white whale of investing – the 20-bagger as Alibaba is expected to IPO in the US at $160Bn just 7 years later

YHOO, on the other hand, took the long and winding road but it should finally be getting to our $50 target and that's another 100% gain on the stock – though a very small consolation to those who didn't pick up AliBaba directly.  Fortunately, at Philstockworld, we know how to BE THE HOUSE – Not the Gambler and, back in June, when the rumors of the AliBaba IPO began we came up with a way for our Members to make 400% playing YHOO into the AliBaba IPO.  

From our Live Member Chat Room:

YHOO/Albo – Why not just buy YHOO?  YHOO is $35Bn and owns 22% of AliB while SFTBY is $91Bn and owns 33% of AliB, so you get a lot more bang for your buck with YHOO, whose forward p/e is only 19, than SFTBY, whose forward p/e is about 17 – so not all that significant.  Of course, more significantly is the potential impact of (guessing) $50Bn worth of AliB on a $35Bn company!  

So we don't even have to go crazy if we want to play the "YHOO is undervalued" game.  The Jan $38/45 bull call spread is $1.60 on the $8 spread with 400% upside if YHOO gains 28%.  I think that's worth $800 for 5 shares in the $25KP


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Even Though GM Lied and Said They Paid Us Back, They Say They’ll Need More Time to Pay Us Back

Even Though GM Lied and Said They Paid Us Back, They Say They’ll Need More Time to Pay Us Back

Courtesy of Jr. Deputy Accountant 

Wait a second… didn’t GM already claim to pay us back in slick commercials earlier this year or am I completely confused? If I’m not, GM said they paid us back but left out that A) they were using government money to do so and B) only paid back the part that was actually "loaned" and didn’t include the full $49.5 billion extended to GM should they need it. They argue that not needing it and instead using that money to pay back the government shows the company is in good shape but I argue that it only shows that our government is the worst loan sharking operation in history. It’s like taking out a payday loan to pay off the interest on the last payday loan except in the case of GM they get a way better interest rate than the 400% Western Union would charge for a few extra bucks til payday. 

USA Today:

General Motors’ new CEO, Dan Akerson, confirmed Thursday that the government — taxpayers, that is — won’t get back all the money put up to save GM from ruin in the car company’s initial public stock offering, expected as soon as mid-November.

[I]t’ll take a couple of years, at least, for the taxpayers to get back the remaining $43 billion in bail-out money the government invested to save GM from going out of business. It won’t all get paid back in the government’s initial sale of its GM shares later this year, he said, but over time investors will be willing to pay more for the shares and the goverment [sic] can get higher prices as it continues selling its 60.8% ownership of GM.

Treasury gets back the remaining $43 billion of bailout money. GM must be consistently profitable for investors to pay such prices, he acknowledged.

Great bargain for the American taxpayer if you ask me. Just let Bernanke and the HFT robots lube up for some $GM and we might actually see a few pennies back on every dollar.

What a joke.


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Can GM Really Call That an “Initial” Public Offering?

Can GM Really Call That an "Initial" Public Offering?

Courtesy of Jr. Deputy Accountant 

Initial would imply they didn’t embarrass themselves by getting kicked off the exchange the first time around.

Reuters:

General Motors Co has completed the paperwork for an initial public offering, and timing of its filing with the U.S. securities regulators rests with the board of the top U.S. automaker, sources familiar with the process said on Monday.

The initial prospectus, expected to be for $100 million, is likely to be filed with the U.S. Securities and Exchange Commission on Tuesday, two people said, asking not to be named because the preparations for the IPO are private.

Meanwhile, GM will tell you they have paid back the government in full but that’s not exactly true. They’ve paid back the $6.7 billion they were actually loaned but the total $49.5 billion extended to GM to help it through bankruptcy is still outstanding. A large chunk of that (the part they DON’T mention in the "we paid you back!" commercials) consists of the government’s equity in GM, so GM can turn around and say they paid back the bailout loan and technically be correct. Tricky ain’t it?

It gets worse when you realize they used government money to pay back the government.

Via Reason:

As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money—government money—to pay back the government loan.

GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development—although hardly one worth hyping in ads and columns—if it were not for a further plot twist.

Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5 percent) interest loan to retool its plants to meet the government’s tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the


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2010 Tech Debutantes Cool Off – Time For a Look

2010 Tech Debutantes Cool Off – Time For a Look

Courtesy of Joshua M Brown, The Reformed Broker 

A handful of young, vivacious tech stocks made their debuts this year, but I pretty much kept my hands to myself upon their arrival.

You couldn’t buy any of these smoke shows when they IPO’d earlier this year, they were pricing above the range and opening at huge premiums.  Now that the market’s pulled back, I’m doing some homework.

I haven’t yet formed an investment opinion on these names, I’m only now throwing them up on my radar.

Meru Networks ($MERU) - Founded in 2002, Meru is about helping small and midsized businesses with their internet connection needs.  According to 24/7 Wall Street, it "was hot at the IPO (for as much as a 30% gain in the first day and headed south since.  The networking solutions company came public at $15.00 and is now down 7.8% at $13.83."  (source: 24/7 Wall Street)

Calix Networks ($CALX- "Jefferies & Co. analyst George Notter launched with a Buy rating $16 target. ‘Calix is a direct way to play the broadband stimulus plan,’ he writes. ‘We expect Calix to begin recognizing revenues from this spending in late 2010, with the bulk of the benefit hitting the top-line in 2011 and 2012.’" (source: Barron’s)

SS&C Software ($SSNC) - A well-established maker of software for institutional investment managers (funds, trading firms, banks etc).  Ridiculous 49% profit margins, some debt.  Jeffries, Raymond James, JPMorgan and Credit Suisse all initiated it with buys on May 10th, Wells Fargo started it at an Equal Weight. (source: Street Insider)

Alpha & Omega Semiconductors ($AOSL) - Power and battery efficiency is so hot right now as all these mobile computing devices are energy drainers.  This one does power management chips.  "Alpha & Omega Semiconductor, a leading supplier of power management chips for laptops, flat panel displays and a variety of consumer electronic devices."  (source: Seeking Alpha)

There were one or two other tech IPOs that came out this year but these are the ones I’m trying to learn more about.

Here’s a quick look at how they’ve fared since descending the staircase into the ballroom:

 

 


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Vintage Wine Turns Sour for Financiers

Vintage Wine Turns Sour for Financiers

By Alex Daley and Doug Hornig, Casey Research

Shopping basket red wine bottles

When the folks at a private equity firm gather at the holiday party refreshment table to talk about “vintage,” they aren’t commenting on the Château Pétrus.

The world of private equity financing doesn’t have high visibility, but it is big business behind the scenes. Unlike venture capital outfits – which provide startup money to very early-stage companies – those who play this game grab existing private companies, often through leveraged buyouts (LBOs). Each year’s investments are referred to as vintages, with some being more highly drinkable than others.

Now, some of the recent vintages look like they’ll turn out to be little more than vinegar.

Private equity investing has never been for the faint of heart. But investors continue to engage in it, because the payoff can be substantial. And for the first few years of the new millennium, it was a go-go place to be. With so much easy money sloshing around, the number of PE deals exploded, totaling over half a trillion dollars at the manic peak in ’07.

Then came the crash:

                                                                                                

It’s important to remember that credit was not a single bubble. It was a bubble machine. It created the housing bubble, which fueled the personal debt bubble (which in turn popped the housing bubble, but that’s another story). The mortgage market gave birth to a whole new range of derivatives, things like collateralized debt obligations (CDOs), mortgage-backed securities (MBSs), and the rest of the acronyms we’ve all become familiar with, even if we don’t quite understand what they do. (Don’t be embarrassed, neither did the financial geniuses who swapped them like baseball cards.)

Frantic trading in these newly printed scraps of paper created its own bubble, manufacturing an incredible amount of seeming liquidity in a very compressed time frame. We know the ultimate consequences to the balance sheets of our banks, and our government, by now. But there was more to it than that. The capital these transactions threw off had to go somewhere, and suddenly well-capitalized investors were pouring their
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Zero Hedge

PG&E Plummets After Drawing Down Billions On Its Revolvers

Courtesy of ZeroHedge. View original post here.

Two days after California utilities PG&E and Edison crashed, losing a third of their market cap in 48 hours amid investor fears over their exposure to the devastating California fires which are still raging, moments ago PG&E stock tumbled over 20% in premarket trading after the company disclosed it has fully drawn down its revolving credit facilities, in anticipation of soaring liquidity needs.

In an 8-K filing this morning, PG&E and its subsidiary, Pacific Gas and Electri...



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Kimble Charting Solutions

Stock Market Correction Lingers As 800 Pound Resistance Levels Hold

Courtesy of Chris Kimble.

Key stock market indices continue to struggle beneath 800-pound Fibonacci extension levels (resistance).

In today’s “6-pack” chart, we illustrate these key bull/bear lines for investors – see below. The Dow Jones Industrials, Transports, S&P 500, and Nasdaq 100 are all experiencing weakness and selling pressure at long-term Fibonacci extension levels each at (1).

But the overhead resistance spreads to other key sectors like the Banks and Semiconductors. The Banks are experiencing weakness at the 2007 highs at (2) and the Semiconductors are experiencing weakness at the 2000 highs at (3).

Expect market weakness (or consolidation) to continue until these stock indexes and key market sectors breakout above resistance. Stay tuned!

6-Pack of Stock Market Indices –...



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Phil's Favorites

Data deficit means we're in the dark about the digital divide

 

Data deficit means we're in the dark about the digital divide

Cellphones are everywhere in Africa - but that doesn’t mean the digital divide is closing. Legnan Koula/EPA

Courtesy of Alison Gillwald, University of Cape Town

Digital concerns underpin many of the UN’s Sustainable Development Goals. Gender equality, good health, quality education, industry innovation, smart and sustainable cities: these all require strong information and communications technology systems to become a reality.

For all of this to happen, developing countries will have to overcome the &ld...



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Insider Scoop

8 Stocks To Watch For November 14, 2018

Courtesy of Benzinga.

Some of the stocks that may grab investor focus today are:

  • Wall Street expects Macy's, Inc. (NYSE: M) to report quarterly earnings at $0.14 per share on revenue of $5.41 billion before the opening bell. Macy's shares gained 0.59 percent to $36.00 in after-hours trading.
  • Analysts are expecting Cisco Systems, Inc. (NASDAQ: CSCO...


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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Chart School

Weekly Market Recap Nov 11, 2018

Courtesy of Blain.

This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic.   Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been.   Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!

The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.

“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlik...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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