Loeb Predicts Hedge Fund Industry Washout, Calls Current Market ‘Hedge Fund Killing Field’

Strong words for the hedge fund industry– coming from one of the best in the business, Dan Loeb from Third Point Capital.

“There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies,” the New York-based firm said in a quarterly letter posted on its website.

Third Point, which was founded in 1995 and lost 2.3 percent in the first three months of this year, described the industry’s performance as one of the most “catastrophic periods” that it could remember since the firm was started. It said the “increasing complexity” in markets over the past few months is here to stay.

Most investors were “caught offsides at some or multiple points” since August, Third Point said, when China’s surprise currency devaluation roiled global markets. The firm said market participants were hurt by bets against the yuan in February and investments in Facebook Inc., Amazon.com Inc., Valeant Pharmaceuticals International Inc. and Pfizer Inc.

“Further exacerbating the carnage was a huge asset rotation into market neutral strategies in late the fourth quarter,” Third Point said. “Unfortunately, many managers lost sight of the fact that low net does not mean low risk and so, when positioning reversed, market neutral became a hedge fund killing field.”

Here’s a free piece of advice for Dan and his buddies struggling to make ends meet in the stock picking business: get on over to Twitter. I’ve found everyone there to be quite the fashionable expert on the economy and for the management of money. They’re always right. To prove their success, I’ve seen many pictures of exotic vacation spots, as well as new cars and fast women.

Dan, if you want new cars, fast women and a chance to parlay in exotic places around the world with stacks of cash on your desk, do yourself a favor and visit Twitter and behold the expert opinions of so many astute and well qualified investors.

I’ve done my good deed for a lifetime. I can die now, knowing that I’ve made a difference.

The market is barely lower, after the world’s largest company missed…by a lot (Extra Trump). More than that was the horrid numbers coming out from a sundry of companies, like BWLD, TWTR and any number of banks of your choosing.

Apple is down 8% and the Dow is off by 40. Amazing.

While this can change as the day progresses, I can’t help but to marvel at how different this market is from what we’ve seen over the past two years. Gone are the days of false rallies and failed momentum. The market smugly presses higher, with crude marooned in the $40’s, after the energy sector has bled out to the tune of $100 billion in free cash flow over the past 12 months.

Everyone is so optimistic and filled with hope. If I didn’t have a brain, I might be fooled by it and sop up the koolaid myself.

What balls these hedge fund shills have, posting reports via Seeking Alpha for the explicit purposes of making a stock trade lower. This is all very convenient for these people who take positions before hand. It’s perfectly legal, apparently.

iBankCoin has a fairly large audience. Why, I’m missing out on huge pay days by not publishing hedge fund short reports on the site for a large sum of coin.

I wonder how many puts the catamites at Seeking Alpha bought before publishing the latest XON short piece?

The first report really crushed the stock. This being the second report in as many weeks, it’s having a much more subdued affect on the share  price.

Truth is, I think some of these short sellers do the market a great service. Many of their reports are spot on. My sole complaint is the obvious front running taking place here, a method of stock manipulation by which nefarious American Greed type scam artists will use to commit fraud.

In what is being described as the boldest move against foreign steel interests since 1978, U.S. Steel is trying to get China from cheating and stealing its way into the American steel markets.

The petition, known as Section 337 and used to protect against intellectual property theft, listed some of China’s top producers, including Hebei Iron & Steel Group and Anshan Iron and Steel Group and Shandong Iron & Steel Group Co [SDONGG.UL].
“We have said that we will use every tool available to fight for fair trade,” said U.S. Steel Corp President and Chief Executive Officer Mario Longhi in a statement.

“With today’s filing, we continue the work we have pursued through countervailing and antidumping cases and pushing for increased enforcement of existing laws.”

It comes after U.S. officials last week warned that China should take steps to cut excess output or face possible trade action and Australia said it will impose import duties on certain types of Chinese steel to protect domestic steelmakers.
China’s Commerce Ministry called steel a “mature product” where “intellectual property rights disputes do not exist”, and said industry from both the United States and China should work together to address overcapacity caused by weak global demand.
“So-called accusations of intellectual property rights violations have no factual basis. We hope the U.S. International Trade Commission will reject these accusations,” the ministry said on Wednesday in a statement on its website.

China has been dumping subsidized steel on our shores for a long time. It’s basically a welfare state for China, with the government paying steel makers to employ thousands, enabling them to dump steel on our markets for a fraction of what American steel makers charge.

Monetization is slowing. The Twitter is dying. The company is a house of ill repute.

Shares are plunging by more than 15% this morning, on much worse than expected quarterly results.

The analyst community are casting wide aspersions this morning.

Mizuho Securities notes, so far, 2016 is not looking rosy for the blue bird. MAUs were up only 5m sequentially, revenue came at the low end of guide and below expectations due to weakness from brand advertisers, and the 2Q revenue guide implies very modest sequential growth. Firm maintains Neutral rating given that it does not see any material near-term catalysts, but certain products/ad units could drive growth later this year or in early 2017. Firm is impressed by the product innovation at Twitter since Jack Dorsey took over, but the business model continues to lag. Remain on the sidelines for now.

Pivotal Research notes weak 1Q16 results and 2Q16 results suggest a worse-than-expected 2016 and longer-term growth trajectory. Despite firm’s own confidence in the still-favorable prospects of the business, investor confidence is unlikely to return any time soon. Continue to rate Twitter Buy, but reduce price target from $39 to $27 on a YE2016 basis. Advertising as-reported was up by +37%, constrained slightly by foreign exchange down from a +48% growth rate in 4Q15. More concerning than the deceleration was that O&O ad revenue grew by only +23%. Conservative guidance for the current quarter is sensible

RBC Capital notes Organic Rev growth is clearly decelerating; all-important MAUs are showing limited growth (though was a bit ahead of Street). Maintain Sector Perform, but lower ests and tgt to $20 from $23. Q4 Keys- 1) Better than Expected MAUs, firm remains cautious on TWTR’s ability to show meaningful user growth; 2) Continued Revenue Growth Deceleration; 3) Strong Margins; 4) Monetization Slowing.

Come hither Apple Computer corporation and the Buffalo Wild Wing entity. Your presence is no longer required in these convicted halls of Goldman, as you’ve proven to be unworthy of our grace. Heretofore, your attendance was quite popular amongst our customers and denizens of our banking interests. But now, you’re an albatross of the first magnitude.

Be gone from this place and erase it from your memories, forever, or until you come across a great deal of cash. Only then will you be welcomed here and considered to be something that we have ‘conviction’ in.

Yours everlastingly,

The Goldman Sachs Corporation

Apple target lowered to $136 from $155 at Goldman; Removed from Conviction Buy List, maintain Buy rating

Buffalo Wild Wings target lowered to $166 from $185 at Goldman; Removed from Conviction Buy List following the Q1 results

Super assholes.

The Wall Street Journal is reporting that Comcast is in talks to acquire Dreamworks for more than $3 billion. At or around $3 billion, that would equate for a massive premium to Tuesday’s closing price of approximately 30%.

Year to date, DWA is up around 5%. Both revenues and earnings have upticked recently, thanks to big box office smashes, such as Kung Fu Panda. Truth is, DWA is a giant turd, with limited creative skills as a studio. They’d be smart to cash in now, before Comcast figures out they’re getting ripped off.

He laid waste to Rafael Cruz and the road slob Kasich.

It looks like a clean sweep of 5 states: MD, PA, RI, CT and DE are all his. Some might argue ‘those a liberal states.’ Fuck off. This is a republican primary, not a general election. Moreover, the state of PA is as backward and checkered pants as they come, being the #1 state in the union in terms of bearing arms.

The results weren’t even close, utterly embarrassing for the other candidates. People literally hate them.

Stay tuned for Trump’s celebratory speech.

NOTE: Trump is up by sixty points in PA.

Chipotle is losing money and rapidly decelerating in terms of sales and margins. Comps are down 29% and the company has resorted to giving away burritos to increase foot traffic. The lunacy of it all lies in the decisions put forth by management. They intend to open 220-235 new restaurants in 2016, effectively leveraging a broken model.

The stock is down 4.5% in the after-hours, continuing a harrowing decline that began when the company started to poison people with their food several month’s ago.

These numbers are much worse than anyone had expected. Shareholders should expect scathing reports tomorrow morning and significant pressure on shares throughout 2016. In my opinion, CMG doesn’t deserve any premium valuation and should fall in value down to $250.

Via Briefing.com

• Reports Q1 (Mar) loss of $0.88 per share, $0.17 better than the Capital IQ Consensus of ($1.05); revenues fell 23.4% year/year to $834.5 mln vs the $863.24 mln Capital IQ Consensus.
• Warned on March 15: Lowered EPS to ($1.00) or worse from break even; updated comps through 2nd week of March.
  • The decrease in revenue was driven by a 29.7% decrease in comparable restaurant sales (estimates near down 28.5%), partially offset by sales from new restaurant openings. Comparable restaurant sales declined primarily as a result of a decrease in the number of transactions in our restaurants, and to a lesser extent by a decline in average check, including an impact from sales promotions.
• Comparable restaurant sales decreased 29.7%, Comparable restaurant transactions decreased 21.1%.
• Restaurant level operating margin was 6.8%, a decrease from 27.5%. The decrease was primarily driven by unfavorable sales leverage, and to a lesser extent by higher than usual marketing and promotional costs, and food testing and waste costs.
• For 2016, management expects the following:
  • 220 – 235 new restaurant openings
  • An effective full year tax rate of approximately 38.4%

• CMG says that it began to see some recovery in comps in the second half of the first quarter. In January, comps were running at about -34%. It improved to about -22% in the first few weeks of April, with Easter adding about 4%. Wet, cold weather also negatively affected comps in early April.
• The company says the recovery has been uneven throughout the country. The west coast and northeast for example — where the health concerns were most acute — have struggled the most. In these geographies, it has only recovered about a third of visits.
• The company believes that consumer perceptions are improving, based on in-depth research work done. That said, it still needs to see improvements in certain areas. For instance, customer admiration has slipped to 61% from 70%. Likely to revisit is at 43%. These are up from earlier, but, still not where CMG wants to see them.
• In regards to marketing, it is implementing its largest marketing program through the end of June. Throughout the year, the company plans to be more aggressive with marketing (possible buy one, get one promo), and will launch a new limited time frequency program this summer. Also, it will add new menu items to invite customers back.
• Its free burrito program this past winter was very successful, with a 67% redemption rate on the mobile offer. This helped provide a boost to comps.
• In terms of expansion, the company still sees a very significant opportunity past this year.
• CMG says it is not prepared to give EPS guidance for Q2, saying that it is really dependent on sales. At comps stay at current levels, going to be difficult to deliver a healthier EPS. CMG gives an example that if comps stay at current levels, restaurant level margins should improve to low double digits.
• Shares of CMG are trading about 6% lower in after hours.

Let’s keep this clean and to the point. Tim Cook is still gay and actively seeking a life partner, who may or may not relieve himself inside of the ladies bathroom. Okay? Aside from that, S. Jobs is fucking rolling over in his grave, haunting Tim at night, throwing candelabras at him –because of what he’s done to his baby.

Apple reported a very bad quarter, with both earnings and revenues coming in light. Margins were less than expected and iPhone and Mac sales were disappointing.

Additionally, the company issued downside guidance, with sharply lower margin guidance, indicative of a company struggling to maintain share. The board has authorized share buybacks to the tune of $175 billion.

Why not just toss said dollars into a flaming barrel of trash?

Via briefing

• Reports Q2 (Mar) earnings of $1.90 per share, $0.10 worse than the Capital IQ Consensus of $2.00; revenues fell 12.8% year/year to $50.56 bln vs the $51.98 bln Capital IQ Consensus; gross margins of 39.4% vs 39.6% ests vs 40.8% last year (guidance 39-40%).
• iPhones 51.2 mln vs 51.5 mln ests vs 61.2 mln last year.
  • iPads 10.2 mln vs 9.9 mln ests vs 12.6 mln last year.
  • Macs 4.0 mln vs 4.6 mln ests vs 4.5 mln last year.
• Co issues downside guidance for Q3, sees Q3 revs of $41-43 bln vs. $47.35 bln Capital IQ Consensus; gross margin 37.5-38.0% vs 39.2% ests vs 39.7% last year
• The Board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. The Company also expects to continue to net-share-settle vesting restricted stock units.
• The Board has approved an increase of 10% to the Company’s quarterly dividend, and has declared a dividend of $0.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.
  • 2.3% dividend yield at after hours price of $99/share.

The stock is lower by 7% in the after-hours, dragging with it a sundry of tech names, such as SWKS -4.0%, QRVO -3.9%. CRUS -3.0% (also reported its own earnings), AVGO -2.2%, NXPI-2.0%, QCOM -1.1%, INVN -0.9%, TXN -0.6%,