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Pixar Animation Studios (PIXR) Message Board

  • unitedfood unitedfood Nov 26, 2001 9:32 PM Flag

    Pixar Long and Short

    Only last week did the analysts at Goldamn Sachs finally take Enron off of its revered "recommended list" a list that once hyped that gem known as WEBVAN. Maybe one of these days a brilliant Goldman analyst will become bold enough to initiate coverage here with a buy. Ironicaly, Pixar may very well be neglected because the strength of its balance sheet obviates the need for it to court these investment bankers thereby snaring some significant analyst coverage. The coverage that Pixar has received is rather strange to say the least. Strange downgrades come at the least likely of times. The key to whether Pixar's stock price goes up in the short term however has little to do with these analysts or even the success of its films. The daily monitoring of box office numbers while interesting is really a useless endeavor. Monsters will continue to do fine, rest assured. Nor is wondering about whether it will be Shrek or Monsters to win the Oscar for best animation a useful endeavor. If WAKING LIFE is one of the animated films nominated, it will probably steal the Oscar, and yes it is a deserving film. Nor is whether Pixar will meet or exceed its "estimates" a significant factor, unfortunately history has shown this not to effect the stock price in the least. So what does matter? More than anything the stock price depends on whether the insiders such as Lasseter and Catmull can refrain from selling their shares this time around. Thus far it appears that they are indeed refraining (this year alone these insiders already have snagged a few million dollars from their sales) and hopefully this will continue to be the case. Shorts who regularly play Pixar depend on this selling by insiders which has historically enabled shorts to cover their positions. It is not enough to say that this is part of their compensation and that investors in this company should simply understand the need to do so. NO, it is time for these insiders to actually show a little long term faith in the company that they work for and break the cycle. It is rather simple, if the insiders do not sell, the shorts cannot cover at these prices and the stock will eventually rise accordingly. If they continue to sell, the stock price will continue to stagnate. Given past precedent here, insiders NOT selling is probably as significant as if there was Insiders Buying. Long term, Pixar is also in a pretty good position. They are a recession resistent company with good profits with a growing evergreen library. Bugs Life will be on T.V. this Friday and of course there will be some more revenue for Pixar from ABL's airing. Debt free Pixar's cash horde continues to grow every day and Pixar's value to Disney increases. With Disney having cutback their own animation department, it seems inevitable that Disney at some point will make an offer that Steve Jobs will not be able to refuse. My guess is that some kind of stock deal will be made which will handsomely reward patient longs. Yes a buyout. Just a hunch. But clearly you would not want to be short on that day whenever that day arrives. Make no mistake, this day will not be telegraphed. If it comes it will come as a shock and a surprise and after Disney has snagged as many shares as possible. The fact that no insiders have reported that they are selling this time around may be indicative of something brewing. OTOH if there are reports of yet more insider selling then of course we can expect more of the same old pattern for the indefinite future. What insiders do or not do is perhaps offering the clearest clues for what we can expect. It is also possible that Pixar may consider "working with" Lucas in the future but I do not think that would necessarily mean that the relationship with Disney would cease once the five picture deal is completed. A new agreement might mean that Pixar will continue to work with Disney AND also be free to work with other studios as well.

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    • For example, in 1996 and 1997 insiders sold 632 K and 995K insider shares respectively. Then in 1998 it picked up! THAT is where most of your cheapy shares went. Post 1999, insider selling has been trivial by comparison.

    • Yes, most are sold.
      They were sold in 97, 98, 99.
      1 million remain are unsold cheapy shares (under $1) of 13 million or so options shares outstanding. There used to be many more, that have been exercised. None belong to Jobs; he has received no options. Total shares sold this year is 336K> ; none last year; pales compared to past selling. They can sell anytime 90 days after filing intent--how would you time that?

    • united, you asked: What I wonder is how many of these belong to S.Jobs, he seems to be the only one not selling.

      Jobs holds no options. He has 30,000,001 shares he holds outright, but no options. For verification, see the proxy statement under the option grant table and the stock ownership table.

      Thi link may or may not work. If not, go to freeegdar.com and put in pixr.

      http://www.freeedgar.com/search/ViewFilings.asp?CIK=1002114&Directory=1095811&Ye
      ar=01&SECIndex=504504&Extension=.tst&PathFlag=0&TextFileSize=124982&SFType=&SDFi
      led=&DateFiled=8/21/2001&SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormTyp
      e=DEF_14A&CompanyName=PIXAR+%5CCA%5C

    • Hogs, your statement that "Most of the cheapy shares have already been sold" is apparently not accurate then. The figures you have now posted seem to indicate that there are actually loads and loads of cheapy shares still unsold. What I wonder is how many of these belong to S.Jobs, he seems to be the only one not selling.

      Lasseter did a lot of selling around the time of ts2 release in '99 and also thereafter, Catmull sold at various points throughout '01. A director named Levy did a lot of selling as well. The average daily volume of the stock for much of this period was rather small often under 100,000 clearly whenever these characters decided to sell it was major. I suspect there is also a bit of follow the leader(s) to a certain extent which occurs as well, that cannot be denied. The same way that Insider buying often can ignite interest in a stock, the converse can very well happen as well and it is that pattern that needs to be broken here. It will happen only if the insiders continue to refrain from selling. If they continue to sell the stock otoh pixar stock price will continue to stagnate, in that event the best strategy would be to be attuned to these insider sales and to sell covered calls in a similar fashion as outlined here by jesse.

    • Cat. & Lass. options for 2000 were at $26.50, not $22.00. so much for memory.
      Also, 336K shares sold TOTAL in 24 months is not nearly enough to move stock price or support the shorting. Numbers just won't work.

    • Nah-
      They still hold lots, but the bulk have been sold. Most shares in insider hands now are in the cat. of "employees-other" (3.8 mill. at about $29 ex. price). Las. & Cat. newly granted shares have ex. price around $22. I think what you have posted is not a sale, but purchase or exercise of option. I use sales list from the NASDAQ site, which I find more reliable and timely than YAHOO. Below are the options outstanding and expiration dates. My main point is that many options (Example: Mather-500K shares - $34 (or so) exercise price) have a price very near current stock price--but even those like Catmull sell for at least $31 /share for the last 3 years. Price determines sell decision, and they sell when Pixar is running hot. Now, a paranoid individual might wonder how Pixar managed to grant options to Cat. & Lass. at or near the very bottom of its Y2K price---


      OPTIONS OUTSTANDING
      -----------------------------------------------------------------------
      REMAINING WEIGHTED-AVERAGE
      EXERCISE PRICES SHARES LIFE (YEARS) EXERCISE PRICE
      --------------- ---------- ------------ ------------
      $0.20 to $1.25................. 1,031,697 // 4.38 // $ 0.31
      $9.60 to $14.25................ 1,424,557 // 5.57 // 11.98
      $14.50 to $21.95............... 2,113,786 //6.84 // 20.12
      $23.13 to $29.88............... 4,590,266 //9.72 // 26.78
      $30.75 to $37.63............... 3,480,027 //8.77 // 33.80
      $38.88 to $61.50............... 471,520 //7.88 // 42.76
      ---------- ---------
      ........................13,111,000//8.07 // 24.46

    • HOGS, fyi this is what I saw on Yahoo insider sales.


      "CATMULL, EDWIN E
      Director, Executive Vice President, Chief Technical Officer 66,667
      PIXR Acquired Shares via Exercise of Options at $0.20/Share.
      Paper gain of $1,753,342 at a fair market value of $26.50/share on 5-Dec-00."


      CATMULL did a great deal of selling in 2001. I do hope it is true as you have pointed out that both CATMULL and LASSETTER no longer are holding their cheaply acquired shares ie that they have finished disposing those shares on the market and that all they have now are shares with significantly higher exercise prices. It appears to be so from the data you have posted.

    • Lasseter,
      comprende'

    • WRONG.
      Read the sec filings; they list shares held or optioned by exercise price. Most of the cheapy shares have already been sold. This you must know, so are being purposely deceptive. List DATES. Sure, most of the shares SOLD over the last six years (not HELD) have a cheap price.
      TO PREDICT SELLING LOOK AT HOLDINGS AND OPTIONS EXERCISE PRICE.
      Folks, something is up. The trailer trash is back.

    • The point is that the insiders who excercise at .20 cents and are selling are selling at a major profit whether they sell at $30 or $40.

      When you say "a very large proportion of the shares in insider hands have an exercise price very near the current stock price" this is not an accurate statement when you factor in the Catmull and Lassiter Shares who have been the major Insiders Selling.

      Comprede?

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