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.
Part of the problem with IMMR, despite the volume, is the concentration of revenues with Samsung, now more than 50%. At present valuations, the stock is trading about 10x sales, which isn’t that much, all things considered. The question is: how do we get a richer valuation for the stock?
The only way the happens is diversification of the customer base, which is happening, slowly but surely. The new playstation 4 will be a brand new revenue source for them, as well as 3rd party control makers for the new Xbox. But we all know what turns IMMR from a $10-20 stock to a $40-50 stock: Apple.
In my opinion, after speaking with management, Apple is extremely hesitant of adopting Immersion’s haptic technology, partly due to pride of not having it first and arrogance. It’s widely believed that if Apple offers haptics, they will try to do so without paying Immersion their proper royalties. Eventually, this will end up in court and IMMR will win, but at what expense?
The more immediate issue that I’ve been exploring is the shareholder base. Amazingly, more than 70% of the shares are owned by institutions, patiently waiting for this to materialize. If you think about it, that’s a shockingly high number, considering they’re small cap and a speculative IP play.
Then we get to the curious case of Dialectic Capital, a NYC based hedge fund with about a billion under management. Its manager, John Fichtorn, is on the Immersion board, due to once having a 7% stake in the company. Originally, he got on the board by asking for change at the company, helping it divest from non-core businesses and focus the company on shareholder value. His investment paid off, in spades, with the stock up sharply since his original investment.
However, as of late, he’s been a seller of the stock. In private emails, he describes his position as being “too large for his fund” and he’s been paring it down to an appropriate size. There’s nothing wrong with selling. Hell, I do it all the time. However, I’m not on the board of directors, privy to material information that might be a predictive element of where the stock is heading.
I have a big problem with this.
If Mr. Fichtorn’s advocacy is over at Immersion, he should resign from the board and make room for someone who will not raise eyebrows whenever an S-4 is filed. He’s not just an ordinary shareholder, but a hedge fund manager with a big stake, on the board, selling regularly.
I don’t know much about Dialectic’s performance and I haven’t done much research into the matter. However, I do know he’s been short HLF, long GLD and has a big stake ln TLAB, a perennial dog. It seems to me, on the surface, that his 2013 numbers might be coming in a little less than stellar, which makes his big win in IMMR an all too attractive “source of funds” to throw good money after bad.
My back of the envelope valuation for IMMR is $23, based upon a 10x p/s ration, off projected 2014 numbers.
I’ve been busy all day threatening companies with my new warchest. I managed to breakeven today, despite the nice looking Dow. As expected, the market sold off the news, that was supposed to be sold off.
This makes no sense, going up like this because some guy, who was never going to be the Fed chair, isn’t going to be the Fed chair.
I sold out of my GOGO, raising cash levels to 40%. I still own substantial positions in IMMR, YELP and POWI. Barring some sort of huge price surge in the aforementioned securities, I doubt I will sell them prior to seeing them through earnings.
I have another new issue that I am investigating, as it is incredibly cheap on paper. The business is slightly impaired, which has resulted in a steep discount. However, I can’t buy into this rally, even though many of my favorite names like OWW and MHO are rising without me.
It doesn’t matter.
I am up 53% for the year and have nothing but wins under my belt. I intend to be patient and buy the blood, if at all possible.
The market is rallying because Summers, who was probably the very worst pick for new Fed chairman in the history of Fed chair candidates, is out. Most are assuming Janet Yellen will be the next Fed chair, buttressed by the liberal tag line–“she is a woman.”
First of all, what sort of man picks an ultra-political guy, like Summers, to head up a non-partisan arm of the government? The answer to that question is an ideologue.
Don’t be surprised if Obama picks someone else to head the chair, someone retarded like Kohn or worse Stanley Fischer.
I am pleased to see the futs roar and I will most certainly take this opportunity to lighten up and book more profits. But, having said that, I do not believe this is a sound reason to rally 200 points.
Amazingly, S&P futs are up more than 20, following Larry Summers removing his name for new Fed chief. Apparently, the market approves of having a non-partisan bastard hack at the helm of the most important American institution.
I’d be shocked if this rally wasn’t sold off. Nevertheless, we are at the heights of hedonism and excess.
The house of pain continues for the vagabond short sellers, bankrupting themselves for believing everyone else will go bankrupt.
UPDATE IV: Sorry for the damn site going offline (I really wish I could curse right now). I have no idea what happened. My guess, Lehman Brothers got all pissed about my “fortune cookie curse” on them and ordered a web assault on iBC. Apparently, our fate is intertwined with Lehman.
Mini Update within a bigger Update: The site was hacked down by egregious iBankers. We are fighting them on the internets. Developing…
Odd, no?
Anyway, BAC just made a massive error, through buying MER. Essentially, the Fed is forcing them to do this deal. Everyone knows, they can get MER for $15 or less. Instead, they are trying to paint the pig gold and tell us it’s a golden bowling ball. It’s not. It’s a stupid pig with gold pain on it.
With that in mind, expect to see BAC at new lows, within weeks. And, on a big spike, I might short some MER, based upon the insane theory that BAC shareholders may say “hmmm, this deal blows, cancel it now.”
Basically, BAC is the biggest bagholder known to modern finance. I am sure Cramer will find the silver lining inside the nuclear bomb crater and suggest we go out and buy banks, again.
Then we have AIG. KKR and JC Flowers just walked away from a tentative deal with them. Basically, they need to raise $40 billion, in order to avoid a credit downgrade. Because of this, they want the Fed to give them a bridge loan of $40 billion: ROFL.
Are they nuts?
Finally, the hapless banks are concocting some new liquidity pool, in order to create liquidity. Shocker. Ignore their efforts and buy SRS, SKF and short LM, with great vigor.
The market should get stomped out tomorrow, led by free falling banks and massive drop in the dollar.
UPDATE III: Merrill’s board is voting on a $29 per share offer (all stock) from BofA. If this dilutive deal goes through, expect the shares of BAC to get mudstomped. This is a highly irresponsible move, on behalf of BofA. I am sure their shareholders would appreciate it if they could wait until Tuesday to negotiate a buy out price. My guess, they could bag MER for $10 or less, if they keep their cool.
UPDATE II: In light of the probable unwinding that will occur, here is a short list of Lehman Brothers’ top holdings:
General Electric Company [[GE]]
Pfizer Inc. [[PFE]]
Target Corporation [[TGT]]
UBS AG (USA) [[UBS]]
Linn Energy, LLC [[LINE]]
GLG Partners, Inc. [[GLG]]
Merck & Co., Inc. [[MRK]]
Microsoft Corporation [[MSFT]]
[[CME]]
Bank of America Corporation [[BAC]]
Apple Inc. [[AAPL]]
Flagstone Reinsurance Holdings Limited [[FSR]]
WellPoint, Inc. [[WLP]]
Wal-Mart Stores, Inc. [[WMT]]
Exxon Mobil Corporation [[XOM]]
UnitedHealth Group Inc. [[UNH]]
Google Inc. [[GOOG]]
Johnson & Johnson [[JNJ]]
Baidu.com, Inc. (ADR) [[BIDU]]
UPDATE: Should AIG catch a credit downgrade, they will face a 46 billion dollar cash call: ROFL. That’s like Dr. Evil type money. God help us.
S&P futures indicate a 36 point drop (3%), thus far. CDS spreads have widened by 30 basis points.
NOTE: As soon as I can start cursing again, Dick Bove is getting a “lifetime achievement” As*hat Award.
Look at everyone trying to describe this 150mph head on collision as some sort of final capitulation, a buying opportunity. Watch them talk garbagio about how insignificant Lehman Brothers Holdings Inc. [[LEH]] was and how if we just close our eyes, we will not see American International Group, Inc. [[AIG]] melt away.
Bank of America Corporation [[BAC]] just threw an oversized anvil on their shareholders, via buying Merrill Lynch & Co., Inc. [[MER]] —at way too high of a price. We all know they could have bought them for like 10 billion. Instead, I guess they thought it made “sense” to take the life savings of coal miners and school teachers in order to buy them for 44 billion.
Right, that makes sense.
Enough of the news; let’s talk turkey.
On this little tiny dip, I will buy more [[SKF]] . There is no way in hell those bastards from Wells Fargo & Company [[WFC]] ] should be green, yet they are. Look for Citigroup Inc. [[C]] and Bank of America Corporation [[BAC]] to continue to drive SKF higher, especially with all the arbs on BAC now.
Also, Legg Mason, Inc. [[LM]] is wrong, as usual. I will try to short more.
And, I will begin to short AXA (ADR) [[AXA]] . These European noodles have investment risk everywhere. They are as stupid as Pzena Investment Management, Inc. [[PZN]] , only 1,000 times bigger. Just know, AXA is long 132 million shares of American International Group, Inc. [[AIG]] .
Wonderful.
Finally, my head is being “Talibanned” off via egregiously weak oil stocks. From [[DIG]] to Western Refining, Inc. [[WNR]] , pain is abundant. At the moment, I am closing my eyes to the weakness, sort of like how Cramer only likes to accentuate his green stocks, while his “charitable portfolio” is down 25%, year to date.
Luckily for me, my “uncharitable portfolio” is up more than 40%.
Hey, let’s raise rates (remember that?). I believe it was the Fast Money gang (Guy Adami) who was suggesting we might enjoy a massive 3rd quarter rally, spearheaded by CDO markups. Buy the banks, no?
Where are the Warren Buffett rumors? Every time the market dumps out, they pull Buffett out of a potato sack and spread scurrilous rumors about his pending “white knight” investment. It never pans out. Buffett is old and cranky. He hates bailing people out, let alone buy himself a decent suit.
Shall we ignore AIG‘s trillion dollar meltdown?
I swear, men with charts should be sent to military work camps. As soon as the vix hit 30, buyers started stepping in. If you really think about it, men with charts are pretty much the dumbest people on the face of the earth, right below spastic retards, who buy Wells Fargo & Company [[WFC]] and U.S. Bancorp [[USB]] , in florescent orange jumpsuits.
The Fed will not cut rates tomorrow. However, in the event that they do, my oil stocks will surge. Either way, I win, at least half way.
At the present, I find it acceptable to lose money in my oils, providing my bank shorts eat pavement.
The next boot to drop has to be in commerical real estate. I have contacts in the field and almost all of them think they are immune. They have a certain smugness about their business and it irritates “The Fly.” These people are mentally impaired—I’ll have you know. On this display of hubris, I want to sell short Vornado Realty Trust [[VNO]] , Boston Properties, Inc. [[BXP]] , Simon Property Group, Inc [[SPG]] and SL Green Realty Corp. [[SLG]] or just get lazy and go long [[SRS]] .
Finally, I think it’s important to note the bag holders of American International Group, Inc. [[AIG]] equity. Here are a few publicly traded companies, who have massive AIG common stock on their books:
AXA (ADR) [[AXA]] : 161 million shares
State Street Corporation [[STT]] : 96 million shares
Barclays PLC (ADR) [[BCS]] : 94 million shares
The Bank of New York Mellon Corporation [[BK]] : 31 million shares
Legg Mason, Inc. [[LM]] : 29 million shares
Northern Trust Corporation [[NTRS]] : 29 million shares
T. Rowe Price Group, Inc. [[TROW]] : 23 million shares
Janus Capital Group Inc. [[JNS]] : 19 million shares
Goldman Sachs Group, Inc. [[GS]] : 17 million shares
Morgan Stanley [[MS]] : 16 million shares
Bank of America Corporation [[BAC]] : 16 million shares.
Dealbreaker has a nice summary outlining who got screwed by Lehman Brothers Holdings Inc. [[LEH]] . However, as you know, the media is so past Lehman. That is very early September 2008.
Instead, let’s focus on a possible American International Group, Inc. [[AIG]] buyout. After all, should AIG get bought out, that would mean everything is gravy train again, no? By the way, AIG is not down 60% for the day; it’s up 50% from the lows. I guess you didn’t get the memo.
This all brings us to tomorrow’s Fed meeting:
In light of Wall Street’s non-stop whining over a rate cut, I am beginning to think Bernanake may actually do it. Logic dictates the Fed would be stark raving mad to lower rates. However, that never stopped them before.
So, with this in mind, sadly, I will cease shorting banks(for the day) and put my money towards depressed oil shares.
At the present, [[SKF]] is my largest position and I would love to buy more—for I think it’s worth $140, easy. But, I need to remind myself how stupid all of the dip buyers are, with their Crameresque mannerisms and Larry Kudlow patience.
Temper your moves with extended breaks. Go for a walk. Eat a sandwich and drink a 40oz. of malt liquor. By the time you come back, the market will be at the lows of the day, effectively poleaxing all of the idiots with online trading accounts.
To sum things up: I will hold my powder, until 3:30. If I buy anything, it will be Western Refining, Inc. [[WNR]] or [[DIG]] . Let’s not get all gay and start saying “markets bottom on these type of events.” That is just plain huckery and untrue.
NOTE: How amusing would it be to see the MER and CFC acquisitions put BAC into receivership?
NOTE II: The mandatory Buffett rumor has been dismissed as lies. Shocker.
Hey people. There is no moral hazard. Our financial system is the envy of the world. Do yourselves a favor and go buy some bank stocks, especially Goldman Sachs Group, Inc. [[GS]] , or we’ll kick you out of your homes (we own them now) and kill you.
I am getting my teeth kicked in, holding [[DIG]] , [[IEO]] , Freeport-McMoRan Copper & Gold Inc. [[FCX]] and Western Refining, Inc. [[WNR]] —amongst others. However, my scientific blend of shorts:longs has resulted in a 1.9% gain—intra-day.
On days like this, it’s important to evaluate your portfolio. This is the stress test that will determine how prepared/unprepared you are. If you are having a very bad day, you are too long. On the other hand, if you are up too much, be careful and throw some longs on the sheets.
Reason being: the market never cooperates. The market is filled with idiotic participants (Vince Farell) who diligently work to delay the inevitable. It’s like one big game of chicken. Who will turn first?
I’ll have you know, “The Fly” drives a mean time machine, armed with machine guns and internet laser beams, capable of “junking” his opponents into a small stack of garbage.
Currently, I have no reason to make a move. My allocation is perfect—not too risky nor conservative. Best case scenario, oil runs and banks crap out. However, I don’t think that will happen anytime soon.
Look at National-Oilwell Varco, Inc. [[NOV]] and ask yourself: “would I rather own that business or Citigroup Inc. [[C]] ?” Then make your move.
Going into the close, I will try to short Pzena Investment Management, Inc. [[PZN]] and Legg Mason, Inc. [[LM]] . Both of them have a lot further to drop. Also, I am short Goldman Sachs Group, Inc. [[GS]] . That stock is trading “graveyard grim.”
You assholes better not question “The Fly’s” time machine usage, ever again.
Do you think it’s a coincidence that on the same day I am released from profanity prison, Lehman Brothers Holdings Inc. [[LEH]] files for bankruptcy protection? Come on. I’ve been “fortune cookieing” those cocksuckers for months now. This is called perfect symmetry.
I’ve been meaning to tell you assholes off, for a long time now. It’s been building up inside of me, like some sort of profanity filled volcano, minus the lava and other volcanic materials.
From this day forth, never question Senor Tropicana’s market wizardry—not matter how egregious his losses may appear to be. Just know, I have this stock game locked the fucked down, fuckface, like some sort of prisoner of war—minus the prison and absence of any semblance of a real war.
Into the fire, I am buying more [[SRS]] and shorting more Legg Mason, Inc. [[LM]] . I expect the fucktards, who make our cheese (government), will make a valid attempt to manipulate this fucker (market) higher. However, just know, the economy has yet to tank, meaning the writedowns and earnings shortfalls have only just begun.
As I write this, the Gov’t cheese makers are asking Goldman Sachs Group, Inc. [[GS]] to help fund American International Group, Inc. [[AIG]] . The funny shit is, inside of 6 months, GS will need help too. The way the big white shoe firms are structured, none of them will make it, including GS and Morgan Stanley [[MS]] . They will have to merge with traditional deposit based banks, in order to fuck America a little more directly.
In closing, evil Fly is back, with the fury and stamina of 100 mountain lions inside a locked Lehman conference room, filled with iBankers.
Top pick: Fuck Bill Miller, via shorting Legg Mason, Inc. [[LM]]
NOTE: You are witnessing a Dow 30 component about to go bankrupt, in AIG. Next is Citigroup Inc. [[C]] , then General Motors Corporation [[GM]] .
I am giving out emergency asshat awards, first thing tomorrow morning. I am having the trophies shined up real nice, right now.
In the meantime, American International Group, Inc. [[AIG]] just had their debt downgraded for them. It’s all over. They will be filing for bankruptcy protection by Wednesday, despite what you SKF to $80 tools say.
The gravity of a sitting Dow 30 component filing bankruptcy protection is huge, and entirely fucktarded, all at once.
Aside from the massive amount of exposure to AIG debt and preferreds, remember who is long the common, for they will be assclown fucked in early trading tomorrow. My favorite shorts are [[AXA]] and [[LM]].
AXA (ADR) (AXA: 28.13 -10.90%) : 161 million shares
State Street Corporation (STT: 69.53 -3.03%) : 96 million shares
Barclays PLC (ADR) (BCS: 21.48 -14.69%) : 94 million shares
The Bank of New York Mellon Corporation (BK: 36.56 -8.49%) : 31 million shares
Legg Mason, Inc. (LM: 36.30 -10.15%) : 29 million shares
Northern Trust Corporation (NTRS: 84.09 -3.44%) : 29 million shares
T. Rowe Price Group, Inc. (TROW: 53.98 -6.02%) : 23 million shares
Janus Capital Group Inc. (JNS: 21.67 -8.60%) : 19 million shares
Goldman Sachs Group, Inc. (GS: 135.50 -12.13%) : 17 million shares
Morgan Stanley (MS: 32.19 -13.54%) : 16 million shares
Bank of America Corporation (BAC: 26.55 -21.31%) : 16 million shares.
As far as the debt is concerned, the holders are foreign governments and large banking institutions. Essentially, this credit crisis destroyed the fucking world as we know it, yet the SEC and the fucking assholes from FINRA are too busy going after penny stock promoters. Fucking asshole motherfuckers.
Can someone please go to jail for this? Anyone?
Maybe we can start off with the tanned man in the Lambo?
Every month I publish a seasonality report in The PPT, using its seasonality tools. For the month of September, ULTA was an interesting pick because of its history. This is what ULTA has done in the month of September, over the past 6 years.
Pretty impressive.
“Now what’s the next one?” says the lurch in the reader class section of the website. I’ll get to it straight away, master.
In summary, chinese and airline stocks tend to do well. GPS has been up 22 of 25 years in October, for an average return of 4.8%. And KMP has been up 19 of 20 years, for an average return of 4.4%. It’s hard to dismiss these numbers as “mere coincidence.”
The best performing ETFs have been EWM, GXC and TBT, again solidifying the case for Asian stocks.
I was looking at GOGO spike into the bell, watching it become my largest position, passing IMMR, then decided to sell half. Ahead of next week’s Fed meetings, I believe it to be prudent to raise capital for a rainy day or two.
With the GOGO sales, I am now in a 30% cash position.
What business can you make thousands or millions per day, depending on your status, while hanging out with illegal mexicans, who happen to be digging holes in your backyard.
It was a very nice week, despite the drop in CVV. We’ll get those suckers next week.
Twitter is coming public and euphoria is running high. Although I believe there will be a broad market pullback in October, stock pickers, like you and I, can make money in any tape.
Later on tonight, or tomorrow, I will do a brief seasonality report for October and highlight how ULTA is a dunk shot in September, possibly picking some “dunk shots” for October too.
Top picks: GOGO, IMMR
UPDATE: I sold half of my GOGO position to lock in a +31% one week gain. It was my largest position and became too overweight, so I trimmed it.
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