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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Phil's Favorites

Boeing is doing crisis management all wrong - here's what a company needs to do to restore the public's trust

 

Embed from Getty Images

 

Boeing is doing crisis management all wrong – here's what a company needs to do to restore the public's trust

Courtesy of Kelli Matthews, University of Oregon

In a crisis, time is not on your side.

A crisis creates a vacuum, an informational void that gets filled one way or another. The longer a company or other organization at the center of the crisis waits to communicate, the more likely that void will be filled by critics.

That’s exactly what&...



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Kimble Charting Solutions

Connect Series Webinar March 2018

Courtesy of Chris Kimble.

We cover dominating patterns in major global Indices, sectors, commodities and the metals markets.  We produce chart pattern analysis and empower people to improve entry and exit points.

To become a member of Kimble Charting Solutions, click here.

...

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Zero Hedge

US Home Price Growth Slowest Since 2012

Courtesy of ZeroHedge. View original post here.

Following disastrous starts and permits data, Case Shiller's home price index was expected to show growth continuing to slow. and it did, considerably worse than expected.

Case-Shiller's 20-City Composite grew at just 3.58% YoY in January (well below the 3.8% YoY expectation and December's 4.14% YoY print). This is the weakest annual growth since September 2012, decelerating for a 10th month in January as buyers held out for more affordable properties.

...



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Insider Scoop

Analyst: Apple's New Credit Card Bodes Well For Green Dot

Courtesy of Benzinga.

Apple Inc. (NASDAQ: AAPL) announced Monday it will launch its own branded credit card called Apple Card and this should be viewed as a positive for Green Dot Corporation (NYSE: GDOT), according t...



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ValueWalk

Tesla's Massive Increase In Delivery Volume In Europe And China

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing a few good posts on Tesla on the VIC message board about the massive increase in delivery volume in Europe and China.

41 – jcoviedo – 3 days 2 hrs ago

Re: Re: Re: Several bullish points

40

Q4 hedge fund letters, conference, scoops etc

Elon leaked...



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Chart School

Weekly Market Recap Mar 24, 2019

Courtesy of Blain.

It was looking like another week of Federal Reserve Kool Aid and crushing bears .. until Friday.  On the back of bad economic news out Europe, the yield curve inverted on the 3 month vs 10 year bond – before you fall asleep to that news, it is a quite important indicator for the economy (not necessarily the stock market… yet).   More on that in a bit.  As you can see the action in the bond market Friday was quite severe so it will be interesting to see the move in the coming few days.

As for the Federal Reserve:

The Federal Reserve signaled no more increase in interest rates this year and just one in 2020, according to its new ‘dot plot,’ and the bank said it would...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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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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