The SEC Comment letter and response are not the end of the story. Stay tuned for the 10K and let's hope it is not delayed.
Note 2. Summary of Significant Accounting Policies
Resale value guarantee, page 10
6. We note your disclosure that in April 2013 you began offering resale value guarantees on certain sales financed through your banking partners. We also note you account for such transactions as operating leases. With regard to measurement of expense during the term of the operating lease, you disclose that you depreciate the cost of the respective operating lease vehicles less the resale value guarantee amount to cost of automotive sales over the contractual term of the guarantee program. Please explain to us the basis under GAAP for your use of this method, in which the depreciable basis excludes the resale value guarantee amount and in which the depreciation rate is not based on the useful life of the vehicles. In this regard, ASC 840-10-55-18 requires equipment to be depreciated following the manufacturer’s normal depreciation policy.
Response: The Company confirms that our operating lease vehicles are being depreciated following our normal depreciation policy. In accordance with ASC 360-10-35-4, our normal depreciation policy is to depreciate the cost of our fixed assets, less salvage value (if any), over the assets’ respective useful economic lives. We believe that for our operating lease vehicles, the useful economic life is consistent with the period under which the vehicle is leased. Accounting guidance is not specifically prescriptive as to whether the expected useful economic life or the expected life of the asset to the reporting entity should be used in circumstances such as this, but we analogize to the guidance provided in ASC 350-30-35, which suggests that the useful economic life is determined based on our expected use of these fixed assets which is to produce operating lease revenue over the expected operating lease.....
Lenovo has been looking for a way to enter the US markets in a meaningful way. Their best smartphone will compete at a lower price point than comparable phones from Apple. Sprint is the carrier that is well positioned to promote Lenovo. And NQ wins.
Sorry guys, but I didn't get to the video and didn't comment sooner, but here is my take.
I am really confused how the fire on the Tesla car could be caused by the battery current.
Having been in an electrical fire, I can tell you it did not look like that. Now I will give you that an electrical fire can become a different kind of fire, but you need to have combustible materials igniting. Could the paint have produced those flames?
The arcing of an electrical fire does not produce large flames. It produces current hot spots where the short circuit is complete. Water will not extinguish and electrical fire, and their is extreme heat, but little flame, mostly a bright orange glow at the arcing point, and sparking which gives off white light.
I don't know what else is in the car that could produce a fire, but here is my take on what Tesla should do now.......try to reproduce the event in their lab. If someone can demonstrate that the random scrap metal on the road can get into the engine compartment, lay perfectly and stable so that a constant arc is created, then maybe I'll be a believer. Until then, I think there is a lot more to be investigated here.
Loved the risk when I bought in 60's. Took it all of the table today. Funny how the market never changes. Look at the volume buy ahead of the uppy target today.
Thanks for the Show...Netflix....bye bye.
Posted by Kwiksaww Trading Blog
As an activist investor, Carl Icahn must have gotten used to reinventing himself to stave off attacks on his agenda.
Let's just say the old dog may have learned a new trick.
While material information on positions is required to be disclosed, SEC filings of late show interesting approaches to the requirement. While a last minute filing may be expected from someone that reluctantly must comply with such a requirement, what seems to be a twist of the filing requirement process is it appears a material disclosure has been offered to the public through an amended filing. Suprisingly, even Reed didn't seem to get around to noting it to his Facebook friends.
But then again, who could blame an activist investor for trying to fly under the radar?
With a renewed battle between Carl Icahn and Reed Hastings that still has a sour taste left over from the Blockbusters days, you would think somebody would have noticed the amended filing of Sch 13D.
The filing indicates the Reporting Persons (Icahn and his controlled or involved parties) exercised their American call options, giving them 4,291,066 shares in the aggregate, and the upon the exercise of the call options, the European Put Options terminated.
What? Terminated? All collected premium will now stay in who's pocket?
These are the questions that need to be addressed to see the bigger picture. Now with voting power, and a tidy markup on the excercised call options, the "Reporting Persons" can play the seller's dance, and use voting power along the way to effect changes to benefit their position.
In any event, the next Sch 13D filing of the "Reporting Persons" could report a reduced position. Using short squeezes to purchase protective puts would offset downside risk to a holder of over four million shares, but that information under current regulatory requirements may not be available. The bigger question that remains though is who was the counterparty on those European Puts and why would they agree that upon exercise of the American Call Options, the European Put Options would terminate?
Most likely the answers won't come in an amended filing.
The amended SEC filing indicates an investor no longer is obligated to purchase under the European Put Option terms upon the excersise of the American Call Options. As the excercise was in the money, all risk is downside to any such investor.
Significant sales volume to bids.
Now what was that PE again?
The position looks like a trade, and is based on selling European put options and buying out of money calls. Net cash going in was most likely zero.
Based on open interest and option activity yesterday, call options were sold.
Only hope now is buying support at lower levels.
NFLX is too cheap for its user base.
AMZN - Can buy, stock for stock, improves margins
FB - Installed customer base, easy delivery, gets instant monetization and internal advertising
MSFT - New tablet, wants to compete more with AAPL
AAPL - Why build when you can buy. Especially if you have the cash.
NFLX - Going alone, $120 is cheap.
Somebody knows something or 70 calls would not flash green.
Seems this negativity is so one-sided. The company pricing model makes sense. It's not that expensive. Checked with a number of individuals that say they are adding the service because they are just now getting more aware of streaming. They also are tired of cable boys and giving there money to them.
Netflix will make money as a distributor. Apple did, and they did not own any songs.