Checking in On Broadway Bill Ackman’s Investments and Real Estate Ventures

His largest long bet.

His biggest short bet.

Still not good.

In other news, due to Pershing Square’s massive success, they’re moving into new office space, a vast big complex built from scratch in hells kitchen (rather befitting, if I say so myself).

At 787 11th Ave., Pershing Square is taking about 50,000 square feet on two new floors, to be built atop of the current eight, according to a person with knowledge of the plans. There also will be a gym, outdoor terraces, space for the Pershing Square Foundation and a tennis court on the roof for use by all office tenants. The hedge-fund firm will pay about $88 a square foot, down from the $140 a square foot it’s paying currently, said the person, who asked not to be identified because the agreement is private.

A partnership including Ackman bought the 464,000-square-foot building a year ago for $255.5 million from Ford Motor Co. Adam Flatto, president and chief executive officer of developer Georgetown Co., which leads the partnership, called the project a “counterpoint” to the skyscrapers being built to the south.

Here are some choice sketches of Ackman’s new digs.

Take a look at the idlers at Pershing discussing new employments opportunities.

LAVISH AMENITIES are a must for Bill. Both pool and tennis court accommodations will be provided.

Frederick Wilson, connoisseur investor and regular Joe worth $500+ million about town, is quite pleased with his latest offering to the market, Twilio–ticker TWLO. In the past, Fred has worked feverishly to exit from some high profile unicorns, such as TWTR, ETSY, LENDING FUCKING CLUB and ZNGA–just to name a few. Today, Fred presents us with his latest and greatest cash incinerator: Twilio.

Here is the TWLO balance sheet, currently valued at more than $2 billion or 13x sales. Reasonable for a scaling money burner, eh?

Fred got in at the ground level, due to his preference for extreme profit.

Back in 2010, Fred alerted the world how to pitch a product. Sagely, he featured Twilio’s presentation as the model to copy.

Union Square owns upwards of 13% of Twilio, virtually all profit.

Annoying balance sheet stuff, via the TWLO s-1

We have achieved significant growth in recent periods. For the years ended December 31, 2013, 2014 and 2015 and the three months ended March 31, 2016, our revenue was $49.9 million, $88.8 million, $166.9 million and $59.3 million, respectively. We incurred a net loss of $26.9 million, $26.8 million, $35.5 million and $6.5 million for the years ended December 31, 2013, 2014 and 2015 and the three months ended March 31, 2016, respectively.

Oh, about 15% of their revenues comes from Facebook’s What’s App. Should Zuckerberg decide to smite Twilio, the company might be doomed.

We currently generate significant revenue from WhatsApp and the loss of WhatsApp could harm our business, results of operations and financial condition.

In 2013, 2014 and 2015 and the three months ended March 31, 2016, WhatsApp accounted for 11%, 13%, 17% and 15% of our revenue, respectively. WhatsApp uses our Programmable Voice products and Programmable Messaging products in its applications to verify new and existing users on its service. We have seen year-over-year growth in WhatsApp’s use of our products since 2013 as its service has expanded and as it has increased the use of our products within its applications. Our Variable Customer Accounts, including WhatsApp, do not have long-term contracts with us and may reduce or fully terminate their usage of our products at any time without penalty or termination charges. In addition, the usage of our products by WhatsApp and other Variable Customer Accounts may change significantly between periods.

While we expect that the revenue for our largest customers, including WhatsApp, will decrease over time as a percentage of our total revenue as we generate more revenue from other customers, we also believe that revenue from WhatsApp may continue to account for a significant portion of our revenue, at least in the near term. WhatsApp has no obligation to provide any notice to us if they elect to stop using our products entirely and, as such, the contribution from WhatsApp could decline to zero in any future period without advance notice. In the event that WhatsApp does not continue to use our products, uses fewer of our products, or uses our products in a more limited capacity, or not at all, our business, results of operations and financial condition could be adversely affected.

Duh.

The market in which we participate is intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed.

The market for cloud communications is rapidly evolving, significantly fragmented and highly competitive, with relatively low barriers to entry in some segments. The principal competitive factors in our market include completeness of offering, credibility with developers, global reach, ease of integration and programmability, product features, platform scalability, reliability, security and performance, brand awareness and reputation, the strength of sales and marketing efforts

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business and may require additional funds. In particular, we may seek additional funds to develop new products and enhance our platform and existing products, expand our operations, including our sales and marketing organizations and our presence outside of the United States, improve our infrastructure or acquirecomplementary businesses, technologies, services, products and other assets. In addition, we may use a portion of our cash to satisfy tax withholding and remittance obligations related to outstanding restricted stock units. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A and Class B common stock. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop product enhancements and to respond to business challenges could be significantly impaired, and our business, results of operations and financial condition may be adversely affected.

Be on the lookout for restrictive covenants in credit facilities, for if credit ever dries up…

Our credit facility contains restrictive and financial covenants that may limit our operating flexibility.

Our credit facility contains certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event we, incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, change business locations, make certain investments, pay dividends, make any payments on any subordinated debt, transfer or dispose of assets, amend certain material agreements, and enter into various specified transactions. We, therefore, may not be able to engage in any of the foregoing transactions unless we obtain the consent of our lender or prepay the outstanding amount under the credit facility. The credit facility also contains certain financial covenants and financial reporting requirements. Our obligations under the credit facility are secured by all of our property, with certain exceptions. We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under the credit facility. Furthermore, our future working capital, borrowings, or equity financing could be unavailable to repay or refinance the amounts outstanding under the credit facility. In the event of a liquidation, our lender would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our Class A and Class B common stock would receive a portion of any liquidation proceeds only if all of our creditors, including our lender, were first repaid in full.

Today at Fred’s blogsite, he waxed poetic over his Twilio investment.

I read yesterday evening that our portfolio company Twilio, which priced its IPO last night, is going to live code from the NYSE this morning. That brought a powerful flashback to the first time I met Jeff Lawson, founder and CEO of Twilio.

It was 2008 in our old offices on the 14th floor of the building we still work in. My partner Albert, who led our investment in Twilio, had met Jeff and was impressed with him and his vision for Twilio. He asked me if I would meet with him and so I did.

Jeff came into the conference room, sat down, and said “we have taken the entire messy and complex world of telephony and reduced it to five API calls”.

I said “get out of here, that’s impossible.”

Jeff proceeded to reel them off and I said “wow”.

He then pulled out his laptop, fired up an editor, and started live coding an app. He asked me for my cell phone number and within 30 seconds my phone was ringing.

I said “you can stop there. that’s amazing”.

It was, and remains, the best seed pitch I’ve ever gotten. I’ve told him that many times and have told this story many times. I am not sure why it has never made it to this blog. But this morning is a great time for that to happen.

Fred might be talking to someone using Twilio here, or maybe not.

In summary, Twilio is really ramping up both revenues and losses, almost in lock-step. The current valuation is excessive by any measure, beckoning an era of VC sponsored tech IPOs that absolutely scorched the earth late investors walked upon. The last big splash into the public markets for Fred Wilson, and the gang over at Union Square, was ETSY and LENDING FUCKING CLUB. We all know how those worked out. Nevertheless, I don’t want to rain urine on anyone’s parade. I am merely pointing out some definite red flags for many of you home gamers out there who see this stock surging, wondering to yourselves “is this the next Face’d Book”?

Without question, it most certainly is not.

Anyone who’s a member of the hall of gentlemen, Exodus, knows Robert and his sublime calls on the semis. He called the top long before anyone else and he called the bottom in March, way before Cramer became impressed by some analyst finally coming to grips with a fundamental shift in the sector.

Here was Robert’s comments back during the darkest days in March.

Cramer on the Micron upgrade.

No word on whether this attack was sponsored by the religion of peace or some right wing, American, wackos, who happened to make their way into Germany, armed to the teeth in the name of baby Jesus.

The shooting took place in Viernheim, Germany and is ongoing. There appears to be a hostage situation.

BREAKING: At least 25 wounded in shooting at a cinema in Germany, German public TV says https://t.co/NcN1h0b8wW https://t.co/J55BHzMERJ

— CNN (@CNN) June 23, 2016

UPDATE: There are reports that the man has been arrested.

UPDATE: the masked man is dead. Back to your regularly scheduled market rally.

Jim wore his ‘fuck China’ bow’d tie for this interview. Maybe the Council for Foreign Relations sent Jim out to lobby for regime change in China. Or, maybe China is really doomed.

You decide.

Thoughts? This is the story of the generation.

The absurdity of this is almost too much for me to bear. Each and every day I consume information on an industrial scale, from all different walks of life. Most of the news is grim and dire and totally demoralizing. Every once in awhile there’s a story about a dog saving a drunkard from a flaming inferno, which warms my black heart to no end. But this Belarus story, of a small piece of shit country rife with corruption, seemingly in charge of agriculture on a global scale due to its market share in potash, is a burden for me this morning.

Several years ago when I was an investor in MOS and POT, I learned about the great gypsy nation of Belarus and how it had designs to starve the world via excessively higher potash prices. For a while, their scheme was working, wonderfully. Prices soared and I was talking seriously about the specter of a $100 tomato.

Anyway, the rascals are back at it again. Oh, the Russians are involved too. But they’re always up to no good.

“New Uralkali shareholders are coming to me every month saying: ‘accept us’. We are not against it – let’s unite, on our conditions,” Belarus President Alexander Lukashenko said at an event in Minsk.

“Let’s resume work and agree how much we will produce.”

Lukashenko did not disclose his conditions. The previous joint venture was based in Minsk, that time a crucial condition for Belarus and the main concern for Uralkali.

The collapse of Uralkali’s joint venture with Belaruskali triggered a fall in global prices as competition between producers intensified. Prices have not yet fully recovered.

Lukashenko also said Minsk signed a new potash supply contract with India on Wednesday, although Belarussian Potash Company (BPC), a trading arm of Belaruskali, later said it was still finalizing the deal.

“I think it’s a wonderful contract, taking into account the current prices,” Lukashenko said, without disclosing the price or volume to be supplied.

See how these devils tried to starve the planet, like true villains, back in 2008?

Wall street loves this shit and has bid up shares of Ag stocks with reckless abandon.

This makes no fucking sense, whatsoever. But for some reason, idiots abound are tethering the fate of BREXIT to the Bitcoin, the virtual reality scam currency.

Bear in mind, there was another higher profile, $50 some odd million, hack attack on one of their idiot exchanges, which might be prompting this 5 day 25% drop in BTC.

Bitcoins are lower by 4% today.

All of the dreams and fantasies of the Bank of Japan Governor, Haruhiko Kuroda, are coming true–at least for today. The yen is falling in spectacular fashion, much to the delight of yen carry trade gamblers, positioned long equities. With the yen dropping by 1.4%, trades have become indelibly profitable from recent levels and it might be time to up the leverage, ahead of the BREXIT results.

It’s worth noting, however, gains in Europe are fading, as traders tuck tail and run ahead of the BREXIT results. Who can blame them, really? The DAX was up more than 2%, now higher by 1.1%. The Italians and their MIB don’t give a shit, still up, whilst drinking wine, by 2.5%

U.S. markets just opened, higher by 155.

Happy BREXIT day.

Adam Jonas is one of the most bullish Wall Street analysts covering TSLA, localed from the venerable investment bank and chief underwriter for TSLA, Morgan Stanley.

Jonas thinks the SCTY deal is horseshit of the very first magnitude and has subsequently slashed his price target for the shares.

Jonas, whose firm has underwritten securities offerings for Tesla, lowered his recommendation on the stock Thursday to equal-weight from overweight and reduced his 12-month target for the stock price to $245 from $333.

“While there may be any number of lucid arguments supporting the strategic rationale of a combination, we believe many of the benefits could have been achieved through arm’s length/strategic partnership and without the risks inherent in exposing Tesla shareholders to the financial and capital markets risks faced by SCTY,” Jonas wrote in a report to clients.

Rumor has it, Jonas has been throwing vases against the walls at Morgan all morning long after publishing this note.

His love affair with Musk is, essentially, over (no homo).

Investment banks have been optimistic about YELP’s prospects as of late. This morning, Needham is out with some bull porn for all of you YELP lovers out there.

Price target has been lifted to $34; hitherto, it was only $28.

Needham raises their YELP tgt to $34 from $28. Firm notes while growing its sales headcount remains a top priority, they are encouraged by mgmt’s increased attention to account mgmt and focus on national advertisers. They believe the positive impact of these initiatives is not reflected in models. However, they believe product innovation is even more important as high-demand products such as Request a Quote or Eat24 should not only enhance sales productivity but also improve retention. These products and the shift to CPC pricing transitions Yelp toward performance marketing and a more transactional business, which should enhance its value over time as it more clearly demonstrates its ability to add value to consumers and businesses. Thus, they recommend shares to investors.

The stock is only up 1.1% in the pre market.