The BLS have reported the current job openings to 5.2 million. The highest amount since they started keeping track in 2000. So, this should mean the job postings should have more revenue than any time during the past decade and a half. Unfortunately, Monster has lost to the competition. Revenues are at their lowest since 2000 when they should be the highest since 2000.
Great! Please reveal more illegal inside information. Also, just to skew the number, there has been horrible turnover over the past few months (just look at linkedin). Do you realize how many reps are on ramp-up and how many territories have been dissolved? Just another angle at their funny accounting. On a side note, this current quarter is one of the lower goal/volume quarter. 1st and 4th quarter are the big ones. Will be interested to see the revs.By the way, look on linkedin, another GOAL producing sales rep left Michigan.
So did you combine a bullish call spread and a bearish put spread? From the looks of Max Pain, it should be below 7 by the next expiration date.
I remember they tried to sell the company at 10 bucks about three years ago to no avail. However....over 2000 calls at the $10 strike for March? That is not individual investors. Look at all the call options, biotech do not have as much call activity as Monster has. Continuous declining revs, EPS that will tank once the senior convertible notes start coming through, mysterious booking claims that are not documented...the calls are trying to say something. Either it is the shorts getting protection, or something big is going to happen soon, and it is not going to be an unexpected change in guidance to the upside.
98% of the stock is held by institutionals. They can do whatever they want with the price. For some reason they want it higher. As for the lower revs, in 2011 they had 6000 employees. Now they have 3,800. You can't have a decline of 2200 employees without revs going down.
Those expire next Friday. That is pretty hefty for the 8 dollar strike...here's a question...who would be interested in buying Monster? I know they had the "for sale" sign up in 2012 when they were looking for 10 bucks a share. These call options are crazy. Not just August, but December as well. If you look at the Max Pain theory, these are risky bets...unless someone knows something.
That can turn around and bite them at the end of the subscription. These are twelve month subscriptions. As I mentioned before, a lot of that technology was developed during the high unemployment and underemployment rates. Anything worked. So, they were giving out deals and discounts thinking that if people use the technology, they will fall in love with it and renew every year. So, they are obviously selling the technology at a deep discount which causes two problems. First, upon renewal, they are probably complain about the increase in price and ask for a continued discount. Second, if it really doesn't work and all their people are happy with Linkedin...they will probably set the software to non-renew. They are really placing a big bet on this. Those numbers you have posted show the high risk they had to take. Discounts usually mean people aren't interested enough to pay full price. I think on renewal...they just won't be interested at all.
I think the short squeeze is going on right now. for the last two years revenues have declined by 60 million per year and they are on pace to do that again this year. At the same time all their competition has been growing. They had to take out a 100 million dollar loan that will dilute the shares when the senior convertible notes sell at the agreed upon $5 share price. Right now 98% of the shares are owned by institutionals. There is a large bullish call spread that was taken out for December at the 5 and 9 strike respectively. I don't see institutionals increasing their positions, but at this point, the shorts that loaded in the 4's need to cover. Looking at the YOY numbers, they are not good enough to cause the rise in share price.
The reason I keep harping on revenues is because EPS does not matter. Keep in mind, they took out a 100 million dollar loan. They have Senior Convertible Notes that can be exercised at $5 per share. So once the notes start to convert, the EPS will fall due to the dilution. When you factor this in, you really need to have a high EPS to absorb that impact. Unfortunately with the rapid decline in revenues plus dilution in the future, the earnings are not what they need to be.
They have been averaging a decline of 60 million per year. They have all these new products as well as this new model, and they are still watching their revenues decline. The BLS has reported 5.4 million job openings, the highest since it started recording back in 2000 and still...revenues decline. With the massive turnover, commissions on the pipeline are not paid. So, you will see the cost of business go down, but the revenues go down with it. What will be the breaking point.
It will keep going down. Look at all the Puts bought at the $6 strike. They expire Aug 21. Usually something that close without being a bearish put spread is a sign that an institutional is worried. Why else would you buy an insurance policy on 200,000 shares. Funny thing is, the open interest on options for Monster is pretty thin. I am guessing that they would buy more if the market would allow at the right price. The ask is at .55. That would means they are worried that the stock will drop below 5.45. I see the 4's coming back very soon.
I was being kind. Remember in the beginning of the year I predicted they were at a tipping point and the loss of revenue were going to accelerate. I really think it will be 25 mil. Check the BLS, 5.4 million job openings STILL. They started keeping track back in 2000. This is the highest it has ever been. Monster should be killing it right now. Like you mention, when the veterans leave, so do the big accounts. CB has been hiring while Monster has been laying off. They know when the Monster rep leaves. Also, the new model is not working. They had a year and no go. If their trend continues, all the EBITDA hype will not matter. They won't have the resources to grow.
You are being generous. They laid off 300 employees...some of those folks whether cost effective or not brought in revenue. Turnover continues to be high. Look anyone up one Linkedin that worked for Monster in the past, you will find more that used to, than currently do. Also, look at the "people also viewed" column. Several people that had been there for years and left recently. Any time you see that many leave, you have to replace and train. That causes the revs to dip. Remember, last year they hired 100 people to create an acquisition team. At this time last year they had everyone in place including the veterans. Over the past year, layoffs, veteran turnover and a product launch that was dismal. They will be down at least 15 mil YOY.
I really don't know how they will pull this one off. There was horrible turnover last quarter. Basically once the commissions went out, several employees left. If you don't believe me, look on Linkedin. Just do a search for Monster current and Monster Past. Or just look of someone that works there and go through the "people also viewed" section. Seems like every time I do this, the list has several that RECENTLY left. You cannot build revenue on the insane turnover that is going on right now. Oh, and the Glassdoor reviews, paint a horrible picture.
Great, give us the other side. There are several facts presented that are public information. This message board can support both views because there are investors that have short positions as well as long positions. There are investors that have bought calls as well as puts. Both sides have an interest. Salpleasego has accurate numbers that he is posting to support the shorts and the puts. So, give us your research that would support the longs and the calls. I would say that this is a respectful request.