SQUARE TO IPO AT TWICE THE VALUATION OF $PYPL

Jack Dorsey is going to be CEO of two publicly traded companies once Square IPOs. A little daylight on Square.

They suck and hemmorage money. Annual losses are in the range of $150 million. Combine that with the hundreds of millions Twitter loses and you have the world’s biggest money loser in @Jack (the fuck).

via the S-1 out tonight:

Our business has generated net losses, and we intend to continue to invest substantially in our business. Thus, we may not be able to achieve or maintain profitability.
We generated net losses of $85.2 million, $104.5 million, and $154.1 million in 2012, 2013, and 2014, respectively. As of December 31, 2014, we had an accumulated deficit of $395.6 million. For the six months ended June 30, 2015, we generated a net loss of $77.6 million. As of June 30, 2015, we had an accumulated deficit of $473.2 million. We intend to continue to make significant investments in our business, including with respect to our employee base; sales and marketing, including expenses relating to increased direct marketing efforts, referral programs, and free hardware and subsidized services; development of new products, services, and features; expansion of office space and other infrastructure; expansion of international operations; and general administration, including legal, finance, and other compliance expenses related to being a public company. If the costs associated with acquiring and supporting new or larger sellers materially rise in the future, including the fees we pay to third parties to advertise our products and services, our expenses may rise significantly. In addition, increases in our seller base could cause us to incur increased losses, because costs associated with new sellers are generally incurred up front, while revenue is recognized thereafter as sellers utilize our services. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses and may not achieve or maintain profitability.

If it’s of any comfort to you, the company just raised $150 mill on October fucking 5th, from the government of Signapore. Before that, they were strapped for cash, dying on a vine, and speculated to be up for sale.

Why?

Because Square isn’t a real business. Apple Pay and Paypal will eat them whole like a fucking leviathon.

I am sure the stock will rocket on its first day of trade. After all, Goldman Ball Sachs is an early investor. VCs want the fuck out of this and @Jack is looking to become a very wealthy man.

The point: if given the opportunity, sell short Square whenever possible. Trading at twice the valuation of Paypal, losing money like morons, this unicorn is destined for the tech ipo trash heap, like ETSY, TWTR, YELP and so many others.

Another day passes by, another day of wasted time. Having lasted in this racket for almost two decades, I can tell you there’s never been a boring day. It’s a non-stop drama, with a comedy of errors, full set of changeable actors (although their roles are always the same), and the sacrificial lamb, who offers himself up to the market as a token of selflessness to help all others succeed.

People like to fade each other. “Look at that Fly guy, he’s buying BIDU. Let’s go fucking short it then blow up an animal hospital.”

Do not discuss the Yen and how it threatens Japan, as it is only up 1% for the month. Moron. Do not discuss how WMT is a harbinger of doom. They are a welfare state. I am not here to discuss the merits of the economy, for I know it sucks.

Case in point, look at the pin action in the homies over the past month.

I only care about the next trade, the remainder of October. You can keep the rest. We have NASDAQS to recover. I can’t wait to see you drown.

NOTE: We’re doing free trials this week for Exodus. Judging by this tape, you might catch one of our lauded OS signals. Email [email protected] for credentials.

Two of our beloved Dow 30 stocks are being dismantled today. One is down because they outfit themselves as a government DMV office, masquerading as a general goods store, who only employs former inmates and persons on the dole. You will never, ever, find a helpful person there and often will find employees listening to loud music, stealing food, and have a joyous occasion amongst each other.

The other is an airplane maker who has been trying to making a flying fortress (extra spruce goose!) for as long as I can remember. Delta came out and talked shit about it today, so, naturally, the stock is down 5%.

Aside from that, it’s a benign day, with the NASDAQ down about 0.3%. It’s the never ending grating of the soul that hurts the most, the animals spirits being snuffed out with the realization that we will never enter a bull market again. The great elixir of all things, easy money, is desired by all nations. Therefore, as logic dictates, when all want something, no one will get it.

I’m still holding onto my positions. My top three are BIDU, GILD and SLCA. What else am I supposed to do? I sit here. I brood. I lose money. I plot revenge.

This is the stupidest shit ever.

The Yen is soaring. Dollars are sinking. Gold is soaring. Stock are languishing. Who can keep up?

We know the economy is in the pits, so we’re dependent on external means to jack prices up. By external, I mean the Fed, naturally. Why not? Its been a reliable investment theme for every year since 2009, save 2014.

Stocks are getting hit again, save commodity related names. Our robot overlords are shorting anything that has worked in biotech, tech, and going long the laggards in gold, silver and oil. It’s the most diabolical trading robot ever.

BEHOLD: gold is now in a bull market, up 20% over the past month.

Sell it.

Top pick: SLCA

Shares of ZFGN are down today on news that a patient died in one of their obesity drug trials. Many of you are young punks, attracted to “The Fly” because he curses and spits at people, and are not familiar with stocked market history. Back when I was a wee lad, in my 20’s, getting started in the business, Fen Phen was all the rage. It was a miracle drug that made fat people lose weight. I remember a guy in the boardroom who was long huge amounts of a biotech stock that had developed the drug and partnered with American Home Products, who was later bought out by Wyeth, and lost his fucking shirt on it, once it was revealed the the miracle drug murdered people. I forget the name of the little biotech stock. Maybe Neogen? I forget.

Here is an excerpt from a 1999 NY Times article. Total damages, eventually, exceeded $14 billion.

The American Home Products Corporation agreed yesterday to pay $3.75 billion in total to thousands of people who contend they were injured by taking the popular diet pill combination fen-phen.

Under the settlement — one of the largest ever in a product liability case — people who used one of the diet drugs for 60 days or less would be eligible for $30 to $60 prescription refunds, while those who have a heart valve injury could receive as much as $1.5 million.

While executives and industry analysts hailed the agreement — which came after months of negotiations and whose terms were widely expected — as a way for the company to put an embarrassing problem behind it, yesterday’s agreement does not shield American Home Products from all fen-phen liabilities.

Some six million people took the diet drugs Pondimin, American Home Products’ brand name for fenfluramine, the ”fen” in fen-phen, and Redux, a similar drug.

The drugs were hailed earlier in the decade as miracle pills for obesity, as an alternative to pure diet and exercise. Diet centers actively promoted the pills to the obese and even to people who wanted to lose a few pounds. In 1996, doctors wrote 18 million prescriptions for the two drugs.

But in September 1997, the company removed the drugs from the market at the request of the Food and Drug Administration after studies linked them to heart valve damage.

I am unsure about the safety of ZFGN’s drug. It’s fun to talk about fat people getting skinny through a pill. Truth is, the technology is hard. If you fat fuckers want to lose weight: start heading to the gym and eating less calories. It really is that simple.

As for the stock, ZFGN: I’d avoid like it was Lehman circa 2008. Where there is smoke, there is fire. This story isn’t over yet.

Stock market history class is now over. Fuck off and go away now.

Professor Fly

This was a stellar performer. With a name like that, I suppose
it’s only right and just for the stock to collapse in such an unceremonious fashion.

The auditor, Matt Erhart, said in the suit that he was fired after revealing what he believed to be wrongdoing at the bank to federal regulators and management at Bank of Internet. The complaint, filed in federal court in the Southern District of California, said that Bank of Internet violated federal laws that seek to protect whistle-blowers.

“As a former federal prosecutor and long time employment lawyer, I find the bank’s conduct as alleged here to be among the most egregious I have seen from a publicly traded company,” Carol Gillam, Mr. Erhart’s lawyer, said in a statement.

In an interview on Tuesday, Gregory Garrabrants, Bank of Internet’s chief executive, said the allegations were groundless. “The factual inaccuracies here are numerous and substantial,” he said. “Mr. Erhart has made all of these allegations in great detail to federal regulators, who have reviewed them in depth and have found them to be wholly without merit.”

All things internet, on a long enough timeline, die.

But look at the revenues and earnings ramp over the years. Truly spectacular, almost too good to be true, no?

Shares are being annihilated today. Nothing is sacred and everything is a facade. Buying opp? I have no fucking idea anymore.

If I told you nothing else mattered but the fate of the US dollar, would you believe me? Italian and French markets are leading the world this year, not because their economies are awesome, but because the euro had been going lower. Don’t look now, however, the dollar is now shitting the bed and this could be the beginning of some wonderful developments.

UUP vs SPY

For one, it allevites the pressure on our exports, which has been cited as a major issue of earnings loss from our fortune 500 companies, over and over again.

Also, it means oil and dollar denominated commodities will catch a bid. Look at how well gold and miners have been trading. You didn’t think it was because the financial system was about to collapse, did you?

Believe it or not, we need higher oil prices. With higher oil prices, over $100 billion in distressed oil and gas debt might get some financing. Otherwise, dark ominous clouds will enshroud the sector and high paying jobs will be lost.

Lads, I am trying to remain optimistic here. It’s easy to get glum and down and out, cast the world aside and sink into a hole of nothingness, begin to short stocks. But I know that’s a transient bet, one that, over time, will prove to be clownish and a bane to my checking account.

The currency wars are real and right now the dollar is winning by losing.

NOTE: We are running free trials for Exodus for the rest of the week. Email [email protected] for access

Am I supposed to feel good because the market isn’t getting its brains kicked out, or because Europe is trading better? This is abuse, making one feel as if they’re being treated fairly because one isn’t being kicked down a flight of stairs lined with mustard.

I can’t control the market. But I can do a few things.

1. Email [email protected] for FREE, unfettered, access to Exodus

2. Don’t forget to ask about the iBC conference, which is happening in less than 10 days. It’s going to be fantastic and we’re gonna have a great time.

3. All of the above.

All you need to know right now is the dollar is going lower vs the euro. Everything else is noise. A lower dollar helps us tremendously and will pave the way for higher stock prices. Nevertheless, early going, I am not impressed by this ‘rally.’

Biotech is looking good, but everything else like vomit.

More later.

dollar crushed by 0.55% v euro, NASDAQ futs up 8, oil flat

Higher

Kick-ass earnings: BAC +2.8%, ADTN +1.9%, DAL +1.6%, LLTC +1.8%, CSX +1.6%, WFC +1.0%, PNC +0.2%

M&A related: SNDK +10.1%; report out they hired banksters to arrange a sale

Euro-trash banks: CS 1.7%, DB 1.5%, HSBC 0.5%

More Euro-trash, this time pharma: SHPG +2.7% (initiated with a Nutella Good at Northland Capital), NVS 1.1%, GSK 1%, AZN 1%

Metals and Miners higher: RIO +2.6%, BBL +2.3%, MT +2.2% (initiated with a check this shit out at Berenberg), VALE +1.9%, GOLD +1.6%, FCX +1%, SLV +0.9%, BHP +0.3%

Euro-Trash oil: SDRL +3.8%, STO +1.6%, RIG +1.5% (higher despite downgrade from bucket shop, Seaport Global Securities), RDS.A +1.1% (upgraded to God Amongst mortals at Argus; tgt $73), BP +0.9%.

Random shit: CASI +14.7% (orphan bullshit…europe), TRIP +10.2% (Did a deal with the man, at PCLN), ZFGN +4.1% (after dropping a gazillion points the past two days, this garbage is up now), ZEN +3.5% (acquires some piker company), MU +2.3%; up on SNDK deal talk or INTC eps beat), AKRX +1.7% (boring), STON +1.6% (CRAMER PUMP), HABT +1.4% (Wells Fargo discloses monster stake), CQP +1.3% (Blackstone takes 5.5% active stake)

Analyst nonsense: MCD upgraded to this isn’t poison anymore at some random boiler room, PBMD +10.7% (initiated with a Cool Shit at H.C. Wainwright; tgt $3), ADI +1.7% (upgraded to Everything is Awesome from Boring at BMO Capital), ECA +1.3% (initiated with a Holla at Your Boy at Deutsche Bank), DYAX +0.6% (upgraded to The Good Shit from Skunk Weed at Leerink Partners), MNK +0.5% (initiated with a Jammin’ at Northland Capital), AXTA +0.5% (initiated with a Blue Horse Shoe Buy at RBC Capital Mkts), HAIN +0.5% (initiated with an Crack at Cowen), VFC +0.3% (upgraded to BUY THIS NOW at Piper), XON +1% ( initiated with a This Can Go Either Way at BofA/Merrill).

Lower

Shitty earnings: CPHD -13.5%; this company is a huge piece of shit (also downgraded to piece of shit at Raymond James; target lowered to $47 at Needham), CFX -9.9% HAWK -6.1%, HASI -4.4% (dilutive offering to boot), INTC -2.6% (also upgraded to pretty good from meh at Summit Research), ASML -2.4%, OZRK -1.6%, JPM -1.4%.

AG -9.8%; nonsense company, DOC -4.9%; no one really cares, NVCR -3.3%; recent IPO, time to crush shareholders, BRG -1.6% (financial engineering horseshit), RCL -1.3% (mystery!), IRWD -1% (phase 3 lotto), COP -0.6% , AAPL -0.5%; Tim Cook is still gay and dating, )

Analyst dart throws: GPRO -1.7% (downgraded to garbage from treasure at Piper Jaffray), UA -1.3% (downgraded to huge pile of shit at Piper Jaffray), DISCA -1.1% (ticking lower; downgraded to no opinion from this is great at Macquarie), TWTR -0.9% (downgraded to laughable from buy at JMP Securities), ORCL -0.8% (downgraded to snooze fest from awesome party at JMP Securities), WLL -0.4% (downgraded to turd from good stufff at Deutsche Bank).

Its been several months since my last bout of unparalleled generosity. My spiritual advisor recommended that I do it again.

Effective tomorrow, the good folks at iBankCoin will grant free and unfettered access into our world class market intelligence platform, called Exodus. Trust me when I tell you, there is nothing else like it out there, especially for retail.

All you need to do is email Vince: [email protected] or myself [email protected] and you will be hooked up through the weekend. When inside, I strongly suggest emailing us again for a free live one on one demo.

Congratulations on your gift. Consider this to be my spiced soul’s cake, granted to you, the neighborhood beggar. Go say some prayers for me now and ask God to release my relatives from purgatory (extra Halloween).

Be well,

Fly