BOOM! Goes “The Fly”

A blow up after all.

After all of the drama, the relief of an acceptable earnings release coupled with a muted response in the share price, I am having my head handed to me after all, long YELP. The stock traded up this morning; but I noted in conversations with “The Devil”, something was awry. The stock was trading odd and a big move was on the horizon. Literally, it could have gone either way. Today’s decline doesn’t mean anything other than the fact that sellers showed up and buyers are non-existent. I know that sounds a little too simple; but this story is young and the shareholder base is fickle.

I’ve had my share of blow-ups, several over the past few years.This 8-10% drop in YELP, coupled with the fact that my other positions are flat to down equates to a -2.25% day. That might not sound like a “blow up” to many of you; but -2.25% days are not welcomed around these parts any longer. This was supposed to be the year of flawless winship, accompanied by cocaine dragons and chest pounding gorillas. Instead I get milquetoast. I shot higher by 20% during the first month of the year and slowly but surely I am giving it back, just like last year.

Lo and behold, TDC is at new all-time highs today, formerly a top 3 position of mine.

Here I am, a most humble space alien magician, buying dips in ANR, VCLK and YELP, using the proceeds of a fine company, MJN, to finance degeneracy. On the eyes of Saturn, I will not sell any more grandpa stocks to buy shit. Correction, I am not saying those companies are shit, per se. Let’s just agree that their risk profiles are somewhat in flux.

Off to go hit somebody in the chest with a gravity hammer.

With MJN proceeds, I bought the dip in ANR and carnage in VCLK–way overdone in my opinion.

UPDATE: I am buying this YELP dip.

Took profits in MJN

America is over the single cup server phenomenon (GMCR), as well as losing weight at WTW. We’re also sick of the shit HLF makes, but love some sugar water soda pop: MNST, KO and PEP.

One thing is for certain, we still love AAPL and we hate travel agencies, opting for the online versions instead: PCLN, EXPE and TRIP. YELP is killing it because we don’t trust “professional food critiques.” The reviews that matter are the consensus opinions of the masses, which is why ANGI is of great interest to me.

Natural gas is so cheap, it has caused dementia in the management personal of America’s largest natural gas producer (CHK), leaving them open to a legitimate funding gap next year.

Coal has been killed, partly thanks to cheaper natural gas supplanting it at power plants and a seemingly worsening Chinese economy, leading to weak met coal pricing. Nevertheless, oil is still robust and margins at the refineries are very strong.

Online advertising is allegedly strong; but why is VCLK getting smashed this morning? American’s love to watch movies (RGC), but have grown weary of the sub-par offerings of NFLX. iTunes will crush them one day to dust.

The next big trend is out there, within reach of anyone who is paying attention. I happen to believe that trend is hidden in the cosmetically rich valuations of social networking stocks. Before you know it, their 50%+ growth rates will cheapen the valuations and these stocks will “Priceline” the fuck higher, scorching the shorts, sending those fuckers sheepishly to the breadline.

http://www.youtube.com/watch?v=e9GaKRRXgpY

I hope you appreciate the magnitude of this recent iBankCoin home page redesign and understand, with every fiber of your physical being, that it is better than anything you could have ever imagined, let alone create. Having said that, this is only the beginning.

Bloggers in the Blogger Network will receive the same page rank as my own staff. However, such luxuries will come at a great expense. Starting immediately, I am watching you very closely, as you represent iBankCoin, in all of its pomp and grandeur. Should you fuck up or post horseshit with bad syntax, I will fire you.

For bloggers in the blogger network: you now have editorial power to choose front page pictures to accompany your posts. You have access to my personal collection of eclectic pictures, placed on the upper right hand side of the wordpress dashboard. Enjoy them with my compliments.

GONE ARE THE DAYS OF SUB-PAR BLOGS. BEHOLD THE ERA OF ENFORCED EXCELLENCE.

Moreover, we are still in the development stages of creating an iBankCoin economy that will dictate your “rank” on the site, with whimsical income versus expenses spreads– and other fun things to help alleviate the stress this cocksucking market burdens us with. Those things, AND MORE, will be completed inside of the next week. For now, you can see most readers are defaulted as “analysts.” There will be “trainee”, “vagrant” and “prison” (banned fuckers) ranks as well, all done with the utmost care and precision that you’ve grown to expect from iBankCoin.

BEHOLD THE INTRODUCTION OF THE MERITOCRACY.

All posts, aside from me and the 12631 boys, adhere to the laws of chronology. In the center is a “trending” box, listing the top 4 articles posted on the site, over a 24 hour time frame.

Some things never change, however, like excellence.

-Fly, 2012

Disaster averted. The YELP numbers were very good, good enough, I believe, to stave off any degenerate short raids. Throughout the day, I twisted the knife embedded in my gut, thinking of how to rebuild my year, should YELP disappoint. But they didn’t.

This is a quarter, as an investor, you can build on. The company is on the cusp of going EBITDA positive and before you know it, they will be profitable. This is, with pulling punches, one of a select few premium names in social networking. Moreover, I do not believe Facebook, Google, Microsoft– or other big internet companies– will just sit there looking at YELP kill it. They will try to acquire them.

For the day, I made 0.9%.

UPDATE: Here is a replay of the YELP call.

SAN FRANCISCO, May 2, 2012 /PRNewswire/ — Yelp Inc. (YELP), the company that connects consumers with great local businesses, today announced financial results for the first quarter ended March 31, 2012.

 

• Revenue was $27.4 million in the first quarter of 2012, reflecting 66% growth in revenue from the first quarter 2011
• Cumulative reviews grew 59% to 27.6 million
• Average monthly unique visitors grew 53% to 71.4 million*
• Active local business accounts grew 117% to 27,300

Net loss in the first quarter of 2012 was $(9.8) million or $(0.31) per share, compared to a net loss of $(2.8) million, or $(0.19) per share, in the first quarter of 2011. Adjusted EBITDA for the first quarter of 2012 was a loss of approximately $1 million, compared to a loss of $880,000 for the first quarter of 2011.

“We are very pleased to report our first quarter as a public company,” said Jeremy Stoppelman, Yelp’s chief executive officer. “We were particularly excited to launch 11 new Yelp markets in the first quarter, including Sydney and Stockholm. With more than 80 Yelp cities around the world today, consumers are yelping about their favorite local businesses in record numbers and we look forward to continue expanding our platform around the globe.”

“Our initial public offering added $114 million to our balance sheet, adding strength to our financial foundation as we look to continue investing in our rapid growth and increase the value we deliver to our communities and local businesses,” added Rob Krolik, Yelp’s chief financial officer.  “The number of active business accounts has more than doubled year over year, and we have seen engagement from local business owners increase proportionally as they realize the positive economic impact that results when business owners have a constructive dialogue with their customers.”

Business Highlights

• New market expansion: Yelp launched 11 new markets in the first quarter, including Antwerp, Brussels, Oklahoma City, Perth and Hampton Beach, increasing the total active markets worldwide to 82.
• Yelp Mobile:  Our mobile apps were used on approximately 6.3 million unique mobile devices on a monthly average basis for the quarter. Our development team released a total of nine updates for Yelp’s iPhone and Android apps in the first quarter. Enhancements to the user experience included new features such as the release of photo feedback, new search filters (filter by what’s hot/new and by businesses with deals) and the ability to view business owner replies.
• Distribution partnerships: Mercedes and Lexus integrated Yelp into their in-vehicle infotainment systems. Combined with Yelp’s BMW partnership announced in December, these relationships underscore the value that Yelp content provides to consumers on the go. OEMs are now working quickly to ensure that Yelp reviews are within reach from the dashboard.
• Yelp for Business Owners: Yelp introduced a new set of dashboard metrics to make Yelp’s business owner accounts even more insightful. The most notable improvement is the integration of mobile metrics which enables a business owner to track how many people placed a call to a business, mapped directions, purchased a Yelp Deal and/or uploaded photos.
• Yelp Deals: Yelp Deals continues to grow. More than 25,000 businesses offered deals to their local community in the first quarter.

Business Outlook

As of today, Yelp is initiating guidance for its second quarter of 2012 and full year 2012 revenue and adjusted EBITDA guidance.

• For the second quarter of 2012, revenue is expected to be in the range of $29 million to $31 million. Adjusted EBITDA is expected to be a loss in the range of $(500,000) to $(800,000).
• For the full year of 2012, revenue is expected to be in the range of $128 to $132 million, representing growth of 54% to 58% compared to the full year of 2011. Adjusted EBITDA is expected to be breakeven to slightly positive

UPDATE: Yelp misses by $0.01, beats on revs; guides Q2 revs in-line; guides FY12 revs above consensus (22.99 +0.39)
Reports Q1 (Mar) loss of $0.31 per share, $0.01 worse than the Capital IQ Consensus Estimate of ($0.30); revenues rose 66.1% year/year to $27.4 mln vs the $25.41 mln consensus. Cumulative reviews grew 59% year/year to 27.6 mln, average monthly unique visitors were up 53% to 71.4 mln, and active local business accounts grew 117% to 27,300. Co issues in-line guidance for Q2, sees Q2 revs of $29-31 mln vs. $29.07 mln Capital IQ Consensus Estimate, and expects adjusted EBITDA to be ($500)-($800)K. Co issues upside guidance for FY12, sees FY12 revs of $128-132 mln vs. $124.77 mln Capital IQ Consensus Estimate. Adjusted EBITDA is expected to be breakeven to slightly positive.

Click here for conf call

ADP reported a net gain of just 117k jobs, way off of the fucking forecast of 170k+, which had already been revised lower from 200k+. But the Dow is at 4 year highs and PCLN is going to a $1,000 p/s. I’m fucking confused; what’s going on here?

Rest assured, with the elections around the corner, liquidity awaits in the balance, courtesy of the Federal Reserve.

Hey, PEP just upped their dividend to 4%. I don’t know about you, but I’d rather keep my cash in PEP than some fucking “savings” account yielding less than 0.5%.

European markets are now nosediving after opening strong as fuck. Blame it on a plethora of weak PMI’s. Look, I get it; Europe is fucked and we’re just scheming our way to prosperity. Regardless, I still like PEP and its 4% divvy.

Bottom line: we’re likely to give up yesterday’s gains–not a big deal in the BIG scheme of things. Go eat a sandwich.

If you are reading this post late at night, you are looking for answers, clues if you will, regarding the stock exchange. Mysteriously, AAPL has transformed from an autobot to portfolio decepticon, ripping through pension funds across the planet in a BIG CAP way. At the same time, earnings have become something to be shunned, because of the onerous nature of the misses. If you do well, TRIP is your fate. If by chance the quarter is less than stellar, you might find yourself OPEN to some capital losses.

I don’t want to talk about my oversized position in YELP because it wasn’t supposed to play out like this. I was overweight and the stock spring-boarded higher by 50% in 3 days. For whatever reason, I never took profits and bought more as it went lower. The biggest fuck up about this strategy is the share volume seized up, effectively shutting the door for me to make an honorable exit. If I were to pare my position, it would certainly hit the stock.

On top of that, I now find myself in the untenable position of having close to 30% of my assets in a single name that is about to report earnings for the first time as a publicly traded entity.

I hope you appreciate the gravity of the situation that I find myself in.

Although I love YELP, as a product, I have no way to gauge it as a business, just yet. My favorite social media companies are TRIP and YELP. TRIP reported a stellar number this evening, let’s hope YELP does the same. Again, I have no edge going into this report, totally exposed from the superfluities of their fucking CEO, Jeremy Stoppelman, who reminds me of a nerdier Einhorn- if at all possible.

My options are limited: delve into the options market and buy illiquid put contracts, pare down my position tomorrow or ride and/or die.

This is why I opted to bulk up on old man stocks, paying big dividends, in order to offset the insanity of my YELP position. Just so you know, the month of May is a particularly onerous one for the markets, one that favours the stability of conservative/defensive stocks. In The PPT, I just posted the seasonality report for May. Go check it out.

One way or another, the market is set to make a big move in May.

Just in case you were wondering, in the month of April, the S&P traded down 0.64% (the first down month of 2012), while the nasdaq traded down more than 1%. In 2011, the nasdaq traded down 1.2% in May and in 2010 -7.5%.

The Dow hit new highs today, but most of my stocks were lower. They weren’t down enough to alert me to danger. They were down just enough to depress me into second guessing my bullish stance.

Stocks reversed sharply off their highs, with stocks like AAPL vomiting it all up into the bell. My “big winners” were WM and PEP–truly a sad state of affairs.

After being up more than 1% this morning, slowly but surely, I gave it all up and closed at the absolute lows of the day, off by 0.5%. The big winners were commodities, a sector I have been avoiding.

While it’s true, we are in a bull market. It’s also true, this is one hell of a stock pickers tape. It is not easy.