CHRISTMAS COMES EARLY TO WALL STREET

Before we get into the market, I’d like to share an email I received yesterday, in response to my latest article on VCs and how they’re fucking us each and every day.

Wanted to email you a quick story to illustrate further your point on the last Fred Wilson post:

I was up in SF recently and my friends were telling me about this new app Saucey, essentially an alcohol delivery service, that they use to have booze delivered on-demand to their place. What they have found is that they are often offered coupon codes on which there are no limits to the frequency of usage for any particular account. Also, the codes are ridiculously easy to guess (i.e. “10OFF” works, but so does “30OFF”). The only requirement is that the order less the discount must total above $1.00. My friends have been drinking basically for free using this app for months now, courtesy of their local VC firms.

All this sounded too good to be true but I confirmed the scam when I was there. We ordered about $70 worth of alcohol to the house for $2 total. Unbelievable, and I am sure it is all in the name of increasing the “active user” figures for some offering memorandum.

Thought you would enjoy!

See? I was right. VCs pay “entrepreneurs” to take their money and burn it in giant gabage pales. I love how some of these hoodie wearing cro-magnons think they’re businessmen, yet are unable to book a profit on their businesses. I guess I’m old school when it comes to running an enterprise.

Markets are sharply higher today, for reasons that escape me.  Perhaps people just figured out that the north star is 14x brighter than the sun and deemed that to be boolish for stocks. Or, maybe the fact that the ISM numbers came in recessionary will provide the Fed with the data necessary to avert moronic rate hikes.

Or Santa.

Either way, I am riding William Albert Ackman’s coattails to the promise land, very long VRX, fixing to assist him in disposing of any and all bodies he might end up ripping to shreds.

We have  the ECB and Fed for interest rates and currency fuckery planning and OPEC, specifically Saudi Arabia, to determine the price of crude.

This Friday the oil sheikhs will discuss the fate of the world, as it pertains to crude.

“We have a meeting on Friday, we will discuss all these issues,” al-Naimi told reporters Tuesday. “We will listen and then decide.”

Oil prices just completed the biggest monthly decline since July as OPEC, which pumps about 40 percent of the world’s supply, showed few signs of trimming production. Crude has fallen almost 40 percent the past year as a record surplus persisted while global producers fight for market share.

When asked if Saudi Arabia will stick to its strategy of defending its markets against competing supplies, al-Naimi said: “Who said we are keeping market share strategy? Did I ever say?”

Smug bastard. You can feel the sense of entitlement seeping through this article. I’ve always felt that getting long crude is a good idea heading into an OPEC meeting, especially with crude near the lows. Eventually, they will cut production and it will invoke a fierce rally.

David is 100% right for calling bullshit on their recent strategy that seems to revolve around the world of SUNE, trying to keep those stupid bastards alive at the expense of their own shareholders.

I hope David gets 3 board seats and then proceeds to kick all of the C-level execs in the nuts, just before firing them.

Here are the excerpts of his letter.

We write in respect of Appaloosa Management LP’s holdings of TerraForm Power, Inc. common equity and senior notes.

Notwithstanding your explanation in the release, we find that “aligning the company’s strategic focus around acquiring projects from its Sponsor” offers little apparent benefit for TERP stakeholders and raises concern for obvious conflicts between the interests of TERP and its “Sponsor”, SunEdison (SUNE).

Until recently, TERP’s business purpose was to act as a vehicle to hold and finance a high quality portfolio of fully-developed wind and solar power assets that were supported by long-term power purchase agreements with large, investment-grade corporate counterparties. Isolating these projects within a ring-fenced vehicle made sense for both TERP and SUNE, as the most efficient cost of capital could be obtained by segregating them from the operational, developmental and construction risks of SUNE’s main operating businesses.

The July announcement of the acquisition of the Vivint Solar (VSLR) portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE’s desire to acquire VSLR’s development and operating assets, rather than enhancing the quality and value of TERP’s holdings.

Disclosure of the precise details of this acquisition plan is long overdue, as well. So too, are the details surrounding the distinct possibility that TERP will be forced to accept a note from SUNE (which is of dubious credit quality and market value) due to a shortfall in the market value of the assets to be delivered in the first leg of the VSLR portfolio transaction relative to the $922 million purchase price.

The reconfiguration of the lnvenergy transaction announced November 9th is no better for TERP stakeholders and is obviously intended for the sole benefit of SUNE. These modifications will hand­ off SUNE’s responsibility for a $388 million equity warehouse commitment to TERP — yet another departure from TERP’s traditional role of owning permanently-financed, income-producing assets.

We note the advertised increase in the number of independent directors on TERP’s board and trust that the Corporate Governance and Conflicts Committee will appropriately investigate these and any other related-party transactions to ensure that they are conducted for the benefit of TERP stakeholders.

Recent rumors of discussions between SUNE and VSLR regarding “strategic options” for the proposed merger transaction, if true, may represent an opportunity for the Committee to exercise its independence and relieve the financial pressures on both TERP and its “Sponsor” from this harmful transaction. Such efforts would be strongly supported by Appaloosa

On this news, TERP is through the roof, up almost 20%. SUNE, aka the “sponsor”, is higher too.

Just a refresher for you n00bs out there: I made the bulk of my 2015 returns long oil and gas stocks in the beginning of the year. The moves were outrageous and I was early to the trade. After selling them, I promised to steer clear of the sector until December, which of course I violated and ended up losing heinous amounts of dollars in SLCA.

At any rate, the reason why I was bullish on crude last year and why I’m considering it now is seasonality. Have a look at our Independent Oil and Gas sector in Exodus, with custom tailored seasonal stats. You will not find this data anywhere else.

Over the course of the year, the sector has been ripped to shreds, as you readily know.

Valuatons are at the cheapest in over a decade.

And, if we’re gonna play it like last year, you’ll want to be long the stocks with the largest short percentages. All of these stocks will soar, hardly any will post negative results. If this industry runs, take your trade, don’t get attached to them, and then get the hell out.

Here are the stocks most heavily shorted in the space.

Last year I played SN in a big way. I’m not sure which one I like now, so stay tuned.

It looks like the World of Warcraft, guitar playing, guru of the mad small cap biotechs is about to get a comeuppance of sorts.

ESRX has agreed to cover a $1 alternative to Martin Shkleri’s $750 option, or $375. I think he lowered the price by 50% recently, just after exiting from his clown car.

The U.S.’s biggest manager of prescription drug benefits said it will cover a $1-a-capsule alternative to the anti-parasitic treatment Daraprim, which costs $750 a pill after Turing Pharmaceuticals AG raised the drug’s price from $13.50 this year.

Express Scripts Holding Co. said in a statement that it’s partnering with Imprimis Pharmaceuticals Inc., a San Diego-based company specializing in compounded drugs. In October, Imprimis started making a medicine for as little as $1 a capsule that includes the active ingredient in Daraprim, pyrimethamine, together with a vitamin called leucovorin that Daraprim is usually used with.

Turing’s price increase for Daraprim, a decades-old drug that no longer enjoys patent protection, drew outrage from politicians, doctors and health insurers. By having a compounding pharmacy combine the two drugs, Express Scripts doesn’t need to wait for an FDA-approved direct competitor to Daraprim to come to market at a lower cost.

The $750-a-pill price “wasn’t acceptable,” Steve Miller, chief medical officer for Express Scripts, said in an interview Monday. Using a compounded drug is “a simple, elegant solution that gets desperate patients the drugs they need at an affordable price.” Miller said because Daraprim isn’t needed in large quantities, Imprimis should not have a supply problem.

So what does this mean for shares of KBIO today? Nothing at all, since Turing is private. Ultimtely, however, I believe KBIO goes to low single digits and Marty washes away with the sands of time, with his millions to enjoy, whilst entertaining an awkward group of livestream viewers–watching him comb over 10q’s, building balance sheets, floating about the office atop hoverboards.

As for Turing, I believe they will have a very hard time marketing a 60 yr old drug at $375, when a $1 option exists.

They must be smoking some good shit over at Citi. They’re calling for a mid 2016 turn in commodity prices. I suppose these fucking things can’t drop forever.

The bank predicts the start of a recovery in some raw materials as returns from commodities head for a fifth annual drop amid the slowest growth since 1990 in China and the prospect of a stronger dollar if U.S. interest rates increase. Citigroup sees “plenty of opportunity ahead for investors” as it believes that in most cases futures prices are below fair market value, both in a six to 12 month period and, more particularly, beyond.

“Citi’s outlook for end-2016 projects higher prices for U.S. natural gas, crude oil, all base metals but especially copper and nickel as well as platinum and palladium,” analysts including Ed Morse said in the report. It also sees prices “mildly up across the staple cereals, but weak to very weak across the bulks. In short, a modest recovery.”

People have been trying to catch bottoms in commodities for years, getting their greedy little hands blown off in the process. If in fact 2016 maarks the bottom in commodities, expect to see a lot more of the bow tie on Jim Rogers ancient body, talking shit on CNBC about the virtues of farms and how his kids know mandarin.

FML.

I once had a dear client who got old, a little incapacitated, and then his children descended upon his estate like fucking vultures. It was a disgusting display of greed. The thing about my client, a man of honor and business in his community, is that he never cared about money. He lived in a small house near his factory, while his bratty kids lived in the McMansions by the golf course. I guess I admire that quality from afar, since I’m guilty of a 6 bedroom dwelling and multiple foreign cars, some might consider luxury.

Nevertheless, when I get old and insane(r), I promise you that my funds will be tucked away in my foundation of the production and facilitation of Orbital Space Cannons (OSC), designed for offensive purposes only.

Enter Sumner Redstone, boss at CBS.

California Superior Court Judge Clifford Klein on Monday said that he didn’t think the case was urgent simply because Redstone is 92 years old. Klein said the request by Pierce O’Donnell, a lawyer for Manuela Herzer, to take a videotaped deposition of Redstone was premature until the case has survived the request to dismiss it.

Redstone, the Viacom Inc. founder and chairman who controls that company and CBS Corp., kicked Herzer out of his Beverly Hills home last month and removed her as his decision maker on his advance health care directive should he become unable to make his own decisions. Herzer sued him last week seeking a court ruling that Redstone is mentally incapacitated and reinstating her as his proxy.

“We are pleased the court today expressly rejected Ms. Herzer’s claims of
urgency and granted our request to stay discovery pending next year’s hearing
on our motion to dismiss,” Gabrielle Vidal, Redstone’s lawyer, said in a statement after the hearing in Los Angeles.
Klein tentatively scheduled a hearing for Jan. 27 on Redstone’s request to dismiss the case.

Redstone argues Herzer’s suit should be tossed based on a provision of California probate law that says the petition can be thrown out if it isn’t reasonably needed to protect the patient.

Petition ‘Farce’
Redstone’s lawyers said in a court filing that Herzer’s petition is a “farce” and that she’s merely concerned about being removed from his will.
Herzer, who’s been Redstone’s friend for almost 20 years and says she was told to leave his home on Oct. 12 without being allowed to talk to him, claims he had been manipulated to turn against her, according to court filings.

Just in time for the holiday season, yes? My knee jerk reaction was “oh this girlfriend is just trying to muscle her way into his billions.” But she’s been dealing with his shit for 20 years. Then I got to thinking “it must be his fucking ridiculous children, who were raised like champagne cavemen who had designs on his fortune.”

Either way, whether someone is out for old Redstone’s dough or not, I find it to be all too common, and reprehensible, that family members treat their patriarchs and matriarchs like departing money bags, each and all jumping in the air for a few million to keep the dream and hope of wanton “success” and luxurious living alive.

How about you fuckheads go out and make your own money?

All of these allegions running wild about the veracity of VRX’s business model has me voraciously acquiring its shares.

My name isn’t Bill Albert Ackman and I’ve never tried to turn around piece of shit retailer JCP; but I am long VRX here, looking to crucify shorts who find themselves squeezed here.

Biotechs were pummeled into dust; but VRX surged ahead.

I even got into a little “back and forth” with the lad who liked to attack VRX on his blospot address.

This is how it’s going down. Stocks will trade flat, but Bill Ackman and a consortium of like minded friends will push the envelope on VRX–burning all of the short sellers alive, actually killing them. By the time pagan X-mas is here, I will be popping corks of champagne into the tweets of that blogspot gent, while laughing and screaming, all the way to the bank.

Good news for all of you corn lovers out there. Monsanto has been doing such a good job at managing our food supply, they decided to up the mandate on biofuels in the gas mix–screwing the refiners, but ingratiating the alternative energy plays.

Here is the alt energy index in Exodus

I don’t know what to think of this shit, frankly. When corn was super expensive, I used to shit on the EPA for their “crazy liberal ways”, burning food and all. But now food is plentiful and cheap, despite what my WFM bill says. So, maybe this is a good thing: burn up the fucking corn and give another industry a shot at success.

To play this, long term, maybe GPRE works, with PEIX as a dice roll gamble. You’d have to be super drunk and fatalistic to invest in this sector. Then again, look at VRX and how I am making the money in it (extra russian accent, soviet era).

As for corn, I’ll leave that to you chart chomping catamites.

Frederick Wilson will not be pleased by this blog, highlighting a horrific ipo market, the worst since 2009.

For the year, our beloved underwriters have raised just $30 billion for companies coming public, down 64% from 2014. That’s a clown number. All of the men, in all of the investment banking divisions, should be fired and replaced with fire hydrants.

On top of that, 1/3rd of all 2015 IPOs were dogshit biotechs. This has truly been a year of extreme fuckery; and we’re not done yet.

Part of the problem is the lack of necessity to IPO. Fred Wilson has plenty of money to dole out to companies. He pays them to burn cash in a giant garbage pale. In return, they all walk around with hoodies and hire a bunch of cool people to help burn Fred’s money. Then Fred shows his friends how awesome they are and then sells his shares to them, booking 100,000% profits.

By the time the buyers figure out the company they invested in was nothing more than a money burning in garbage pale operation, it’s too late; the shares would have alredy dropped by 80%.