BKS STOCK CRASHED BY WHITNEY TILSON/JANA PARTNERS AND CRIMINAL THUG REED HASTINGS AT NETFLIX
Microsoft investment and pump fraud , short squeeze and Criminal Thug Reed Hastings scma gang partners cashed out big: Jana Partners and Whitney Tilson criminal crook.
Incredible! Whitney Tilson May Have Just Made The Best-Timed Trade That We Have Ever Heard Of
Julia La Roche|April 30, 2012
Everyone is still talking about Barnes & Nobles' stock, which surged Monday following news that Microsoft invested $300 million in a joint venture.
The stock was last up more than 62% during mid-day trading.
A bunch of hedge funds are making a fortune today, especially Barry Rosenstein's JANA Partners, which disclosed an 11.56% stake in the book seller a couple weeks ago.
What's perhaps even more remarkable is hedge fund guru Whitney Tilson, the co-founder of T2 Partners, just went long Barnes & Noble last Tuesday after being short the stock.
Here's what the value investor said in a mass email this morning, which was first spotted by Jacob Wolinsky at ValueWalk. (emphasis ours)
1) You might not believe this in light of this morning’s news (BKS has roughly doubled), but this is what I wrote over the weekend but hadn’t yet sent:
For only the fourth time in our 13+ year investing history, we’ve gone long something we were previously short. (Given how well it’s worked out the three previous times with Fairfax, General Growth Properties and Netflix, we should do it more often!) In the past, there’s been some period of time between our switch, but in this case we went from short to long Barnes & Noble on the same day last week. Such a rapid shift in opinion is unprecedented for us, but when we encounter new data/analyses that convince us that we’re wrong, we act quickly.
BKS had been a profitable short for us and we were already thinking of covering when two things caught our attention: we saw that Jana, a firm we know well and respect greatly, took a big stake, and read the write-up below on our favorite value stock idea web site, Value Investors Club. We largely agree with the analysis in the VIC write-up: that the base business is worth almost the entire current stock price, so you get a nearly free call option on the Nook, which is doing much better than we expected. Plus with more than 2/3 of the stock controlled by insiders and, according to Yahoo Finance, 67.2% of the float is sold short (87% if you include Jana’s new stake), even a hint of good news will likely trigger the mother of all short squeezes.
Here's more from Tilson's morning email about going long Barnes & Noble.
LONG Barnes & Noble (BKS)
Market Cap (fd): $800 mm
Enterprise Value: $1.3 b
Average Daily Volume: $17 mm
BKS is a long because it has an under-appreciated asset in the Nook eReader platform, whose value will be illuminated through a partial sale of that business segment in 2012. We believe a conservative sum of the parts valuation for BKS is $11/share for the existing Retail and College bookstores and $26/share for the Nook resulting in a $37 sum of the parts valuation or 230% upside.
BKS is 3 distinct businesses: 1) the 700 Retail bookstores that carry the Barnes & Noble brand name 2) the college bookstore business which operates campus bookstores at 640 different colleges and 3) the Nook eReader platform which sells the devices and digital content and will generate $1.5 b in platform sales in FY12 (FY ending in April).
The Retail bookstore is a dying business as we shift from physical to digital online purchasing of physical. We estimate underlying SSS are declining ~7% annually. However, due to the liquidation of Borders and downsizing of selling square feet for physical books at WalMart and Target, actual SSS will be positive 1$ in FY12 and flat in FY13. EBITDA in FY12 will be $325 mm (or ~$294 mm excluding the Nook EBITDA that is accounted for in the Retail segment) and flat in FY13. Importantly, we believe there is significant value in the retail bookstores because their leases are increasingly becoming more short term (average duration of the portfolio is ~2-3 years) allowing for significant flexibility (and minimal friction costs) in downsizing the store base as 4-wall profit contribution turns negative. BKS is closing 20-30 stores annually or 3-4% of their store base.
The College bookstore is a much better business than Retail. The majority of what is sold in a campus bookstore is not trade books, but rather textbooks and college paraphernalia. SSS and EBITDA are stable ($124 mm of EBITDA in FY12). BKS operates the store on behalf of the school; BKS pays a % of revenues as rent so if sales decline the rent payments decline as well. In addition, there is flexibility to adjust the rent payment % or terminate a management contract on 60 days’ notice should a store become unprofitable.
Re: Tillison talking his book since he is 30$ down on his NFLX long
By singhlion2001 . 22 minutes ago . Permalink
His partner left him and why?
He was scared after finding oiut that Criminal MF thug Reed Hastings & Whitney Tilson are Partners in Crime for PUMP/DUMP loot scam and REED HASTINGS passes him Insider info at MICROSOFT deal with BKS
Criminal Thug Tilson was Short BKS big time, and it was friday, after getting tip from Reed Hastings He covered his short and went long on BKS and Monday BKS/Microsoft deal news hit and BKS stock opened up 100%+ and this criminal Tilson cashed out big