Friday, October 28, 2016
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
14,496 Blog Posts

Jeff Bezos Tries to Trick People into Shorting His Stock, Posts Earnings Shortfall


Don’t fall for this gambit again. Jeff ‘crazy eyes’ Bezos, owner of the Washington Post, is a man without morals. For about two decades, Jeff had used his super powered website, dubbed, to destroy the U.S. economy and see to it that vast quantities of Americans get fired from their retail jobs. Every so often, he intentionally posts bad results, in order to lull shorts into a false sense of security.

Case in point, the company just said this:

Reports Q3 (Sep) earnings of $0.52 per share, $0.30 worse than the Capital IQ Consensus of $0.82; revenues rose 29.0% year/year to $32.71 bln vs the $32.65 bln Capital IQ Consensus; operating income $575 mln vs. $50-650 mln guidance and $670 mln estimates.
NA net sales +26% to $18.9 bln; GAAP operating income 37% to $255 mln
Int’l net sales 28% to $10.6 bln; GAAP OI ($541) mln.

AWS net sales +54.5% to $3.2 bln; GAAP operating income +101% to $861 mln.
Co issues in-line guidance for Q4, sees Q4 revs of $42.0-45.5 bln vs. $44.65 bln Capital IQ Consensus. Operating income is expected to be between $0 and $1.25 billion, below estimates, vs. $1.1 billion in fourth quarter 2015.

In the after hours, AMZN is down $50, or 6.5%, like a jackass moron. Twitter is filled with obituaries, decrying the death of Bezos — tying his fate, ironically, to the orange pussy grabbing clown. But don’t be fooled by this ruse. Neither he or the clown is done yet.

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Stocks Deteriorate into the Close, Led Lower by High Risk Assets


All of the riskiest stocks are getting hammered again. A great man once said ‘show me where I’ll die and I won’t go there.’ Having managed money for nearly two decades, I can tell you, without equivocation, traders die in the riskiest stocks — and it’s always without warning. Things are going great — until you’re being ejected out from the car — through the windshield.

Case in point, IPOs

PTI -32%
ACIA -16%
SNDX -7%
TWLO -6%
EDIT -6%

In spite of the market only down a little, breadth is dreadful at 32% and a sundry of sectors are sharply lower.


How am I playing it?

I have 25% of my holdings in the FIST OF DEATH, short DB, ULTA, LFC, CAT and FCX. Additionally, I am long gold, via GLD, AUY, ABX and AU. Lastly, I am long TLT. The net result is a rather benign day for me. However, I am looking forward to the resumption of the no bid tape — which should provide comfort to those aboard the ark or in the mine.

Cash reserves is at 5%.

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The Largest IPO of 2016, ZTO Express, Plunges in Debut

Employees work at a sorting centre of Zhongtong (ZTO) Express ahead of the Singles Day shopping festival, Chaoyang District, Beijing, November 8, 2015. REUTERS/Jason Lee

You can thank the leader underwriters for this disaster. Guess who? Goldman Sachs and Morgan Stanley. Who else could it be, really?

This is a courier provider in China, based like an American Greed company in the Cayman’s. Upwards of 77% of their business derives from Alibaba.

Pray tell me, what happens to ZTO should BABA ever decide to buy start its own courier service?



The stock market debut, the biggest by a Chinese company since the $25 billion IPO of e-commerce giant Alibaba in 2014, gave the Shanghai-based company a market value of more than $12 billion.

ZTO priced 72.1 million shares at $19.50 a share, above its previously indicated range of $16.50 to $18.50 a share. That price is about 27 times its expected 2017 earnings per share, according to people familiar with the company’s financials. The company wants to use $720 million of its IPO proceeds to buy more trucks, land, facilities and equipment.

FDX trades at 24x earnings and UPS 19x. Obviously, Wall Street doesn’t think ZTO deserves to trade at a premium to those two companies.

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Morning Joe’s Very Liberal Mika Brzezinski Disgusted by the Clinton Foundation’s Scandals


Again, I find myself fascinated by Mika’s reaction to the Clinton’s, outwardly expressing her disgust with the foundation, particularly their conduct in Haiti, where money was stolen and influence was used to further the Clinton Foundation’s money raising efforts — capitalizing on the tragedies afflicting that country.

Her dad is globalist employee #1, architect of the New World Order with Kissinger, making her reactions all the more interesting.

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Wikileaks: Clinton Campaign Colluded with State Department, ‘Friendlies’ at AP to Cover Up Email Scandal


This is precisely how the deep state is supposed to operate. Its leaders are appointed as defacto autocrats to manage the country on behalf of special interests, a shadow government. Lull the people into a false sense of security by telling them how fucking great George Washington was and how the constitution is so awesome and amazing and how rule of law presides over the land.

Use dwindling wealth to bolster the military and use it as a weapon to both distract populace from issues at home and to spread the empire’s territory.

Lastly, control the narrative by cajoling and pressuring the press to be friendly and/or overtly work for the benefit of the government. Anyone who believes in the deep state ¬†will be labeled a ‘conspiracy theorist’ to be ridiculed and dismissed as unserious.

Clinton camp coordinating with the State Dept and press to suppress email scandal.

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An Epic Rout in Bunds is Underway


The German bund market is in flux right now. From -0.25% on the 10yr, bund yields have raced all the way back to to +0.14%

In the last two days alone, bunds have risen by more than 10bps.

These are huge moves and should be monitored.


This is a positive development for markets and the German economy, in my opinion. But like anything else in the market, when it happens too fast people get hurt. This massive rout in bunds smells like margin calls and forced liquidation. I wouldn’t be surprised to see much of this move given back within the week, so be careful about declaring the bund market dead.

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Twitter’s American Sales Grew by Just 1%; 9% of Workforce to be Culled


There isn’t any other way to describe this quarter other than a solid beat. Clearly, the expectations were very grim and the company was able to deliver a better quarter. However, US sales only rose by 1%. Think about that for a second.

Has Twitter ever been more relevant and active than now? World tensions are on the rise. The elections and the Wikileaks are keeping people glued to Twitter, in order to get the news first. Having said all that, the best Jack and his band of morons could do is a 1% earnings beat?

To be honest, in spite of the best, I view these numbers in the worst way possible. They’ve failed to cash in on a watershed moment in American politics.

On top of that, they’ve culling 9% of the work force.


Reports Q3 (Sep) earnings of $0.13 per share, $0.04 better than the Capital IQ Consensus of $0.09; revenues rose 8.3% year/year to $616 mln vs the $605.5 mln Capital IQ Consensus.

Q3 adjusted EBITDA of $181 million, up 28% year-over-year, representing an adjusted EBITDA margin of 29% (Guidance was $135-150 mln)

Revenue Breakdown

Advertising revenue totaled $545 million, an increase of 6% y/y.

Mobile advertising revenue was 90% of total advertising revenue.

Data licensing and other revenue totaled $71 million, an increase of 26% y/y.

U.S. revenue totaled $374 million, an increase of 1% y/y
International revenue totaled $242 million, an increase of 21% y/y

User Metrics

Total ad engagements were up 91% y/y
Cost per engagement (CPE) was down 44% y/y
Average monthly active users (MAUs) were 317 million for Q3, up 3% year-over-year and compared to 313 million in the previous quarter.

Average U.S. MAUs were 67 million for Q3, up 1% year-over-year and compared to 66 million in the previous quarter.

Average international MAUs were 250 million for Q3, up 4% year-over-year and compared to 247 million in the previous quarter.
Mobile MAUs represented 83% of total MAUs.

Average daily active usage (DAU) grew 7% year-over-year, an acceleration from 5% in Q2 and 3% in Q1.

Adjusted EBITDA to be in the range of $700 to $715 million
Adjusted EBITDA margin on GAAP revenue to be 27.5% to 28% (Prior 26-27%);

Capital expenditures to be no more than $360 million (Prior $300-375 mln)

Stock-based compensation expense to be in the range of $150 to $160 million;

GAAP share count to be in the range of 715 to 720 million shares;

Non-GAAP share count to be in the range of 725 to 735 million shares.

Sell the news.

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$QCOM Acquires $NXPI for $110


A deal like this is better for stocks than any earnings announcement. The chips are alive and well. Consolidation is something of a trend for the industry. This deal was leaked a thousand different times and still got done. Amazing.

Via Briefing

Pursuant to the agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all of the issued and outstanding common shares of NXP for $110.00 per share in cash, representing a total enterprise value of approximately $47 billion.

The transaction is expected to close by the end of calendar 2017.

Qualcomm intends to fund the transaction with cash on hand and new debt. The transaction is structured to enable tax efficient use of offshore cash flow to rapidly reduce leverage. Qualcomm is committed to maintaining its strong investment-grade credit ratings.

The combined company is expected to have annual revenues of more than $30 billion, serviceable addressable markets of $138 billion in 2020 and leadership positions across mobile, automotive, IoT, security, RF and networking. The transaction has substantial strategic and financial benefits:

Complementary technology leadership in strategically important areas: The transaction combines leadership in general purpose and automotive grade processing, security, automotive safety sensors and RF; enabling more complete system solutions.

Mobile: A leader in mobile SoCs, 3G/4G modems and security.
Automotive: A leader in global automotive semiconductors, including ADAS, infotainment, safety systems, body and networking, powertrain and chassis, secure access, telematics and connectivity.

IoT and Security: A leader in broad-based microcontrollers, secure identification, mobile transactions, payment cards and transit; strength in application processors and connectivity systems.

Networking: A leader in network processors for wired and wireless communications and RF sub-segments, Wave-2 11ac/11ad, RF power and BTS systems.

Enhanced go-to-market capabilities to serve our customers: The combination of Qualcomm’s and NXP’s deep customer and ecosystem relationships and distribution channels enables the ability to deliver leading products and platforms at scale in mobile, automotive, IoT, industrial, security and networking.

Shared track record of innovation and commitment to operational discipline: Both companies have demonstrated a strong commitment to technology leadership and best-in-class product portfolios with focused investments in R&D. Qualcomm and NXP have both taken action to position themselves for profitable growth, while maintaining financial and operational discipline.

Substantial financial benefits: Qualcomm expects the transaction to be significantly accretive to non-GAAP EPS immediately upon close. Qualcomm expects to generate $500 million of annualized run-rate cost synergies within two years after the transaction closes. The transaction utilizes Qualcomm’s strong balance sheet and will be efficiently financed with offshore cash and new debt. The transaction structure allows tax efficient use of offshore cash flow and enables Qualcomm to reduce leverage rapidly.

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