Sodastream management responds to the report of Oppenheimers Consumer Conference cancellation: "In a statement to StreetInsider, SodaStream President Yonah Lloyd said "... as we just did a well-attended investor day in Mid-May, and I just marketed in both Baltimore and NYC last week we decided not to go out again only a few weeks later."
This makes sense, as Sodastream hosted it's very first Analyst Day this year......and just weeks ago. A buy-out or material event "in play" would've likely followed the typical "no comment" response from the company - rather than this elaborate reply from the CEO.
Looks like a suckers bet.
A final thought:
According to the Xbox One bulletin - game rentals are wholly banned from Xbox One. This will negatively impact game rental businesses such as CSTR and GFly, but will be materially positive for GameStop's new and used game sales for the obvious reason that those who used to rent games will now be forced to buy them.
I believe GameStop's Friday stock surge came on the heels of smart money investing in a net-positive future for GameStop on the back of Thursday afternoon's Xbox One disclosure, and not on the heels of a "misguided interpretation" by investors as the short thesis would imply.
According to the Xbox One bulletin - used games can be sold through authorized retailers only. This is a material positive for GameStop, as one of the very few authorized retailers of used games. Gone are the ebay (EBAY), craigslist, and the many other purveyors of used games. Furthermore, Microsoft will allow friends to "gift" used games to other friends only once in a disc or download ownership life-cycle - but with no trade-in limits to GameStop and other authorized retailers.
According to the Xbox One bulletin - consumers will be able to buy disc-based games at traditional retailers or online through Xbox Live, on the day of release. And so the short thesis belief says that gamers will cease to shop for new title releases in a brick-and-mortar environment, and will opt for the convenience of an instant download. Firstly, a huge chunk of gamers don't have PayPal or credit cards. Secondly, Microsoft didn't elaborate on an exit strategy for gamers trading in their downloaded used games, while GameStop guarantees a "built-in out" for any new title purchased on the release. Thirdly, 30 million obsessively loyal GamesStop Power-Up Reward members will choose GameStop to buy new releases at the store level vs. the Xbox download, so I speculate that an exclusive GameStop/Microsoft partnership is "in play" and the reason behind Microsoft's lack of consumer disclosure on the used game legacy of new games downloaded directly on the console. Furthermore, by allowing itself to become a trade-in vehicle for used games (should a GameStop partnership fail to materialize), Microsoft becomes entangled in a conflict of interest between the publisher and the console-maker. Would Microsoft want to get involved in negotiating separate deals with publishers for trade-in and re-sale rights?? Quite the contrary, Microsoft carefully thought out it's decision to allow publishers control over used game trade-ins and re-sales to/from authorized retailers, with no intention of every becoming one itself.
Microsoft's (MSFT) Thursday afternoon disclosure on Xbox Wire and it's games policy triggered another bull-and-bear debate over the future (or lack thereof) for GameStop Corp (GME).
According to the Xbox One bulletin - publishers will have control over used game sales. And so the short thesis belief says that publishers will demand a cut of GameStop's used game trade-ins or sales or ban used game sales outright. Publishers have little motivation to do this. Firstly, GameStop's roughly $5bil in new game sales would likely favor the bias towards promoting games from publishers who impose no restrictions. Secondly, first-in-line consumers know they can get resale value out of a new title's $60 purchase from GameStop, which helps drive new software sales in the first place. Without a "built-in out" for that new game purchase, there's a greater chance that alpha consumers would wait well past the first day of release, hoping for a sale - resulting in far less profit for the publisher. Thirdly, keep in mind (and publishers do) that GameStop pays out over $1bil in in-store currency from the trade-in of used games, with at least 70% of that going towards the in-store purchase of new games. Consider this, Take-Two Interactive (TTWO) had about $1.2bil in annual game sales, equivalent to GameStop's annual in-store currency doled out for used game trade-ins alone.
The stats tell the truth. Most of the put trades today are bullish traders selling puts. Pay no attention to Forbes - they contributed two short-inspired misguided articles today.
They both get hammered with misguided editorial abuse.
June 7, 2013
10:40 EDT TIVO
theflyonthewall: TiVo downgraded to Neutral from Buy at Janney Capital
Note this is the third downgrade of the day. :theflyonthewa
09:48 EDT TIVO theflyonthewal: TiVo downgraded to Equal Weight from Overweight at Barclays :theflyonthewal
09:30 EDT TIVO
theflyonthewal: TiVo downgraded to Neutral from Buy at Lazard Capital
Lazard Capital downgraded Tivo citing the lower than expected patent settlement. :theflyonthewa
09:30 EDT TIVO
theflyonthewal: TiVo settlement below expectations, says Piper Jaffray
Piper Jaffray says TiVo's patent settlement of $490M came in below its expectations of $550M. However, Piper thinks today's sell-off will prove to be a buying opportunity for TiVo shares and keeps an Overweight rating on the stock. :theflyonthewa
Approaching open interest with almost 700 contracts traded (79% at the ask), premium up 95% to $.37, break-even 14% higher by within 10 days. Second most active option is the June 42 calls, with almost 400 contracts traded, premiums up 92%.
Overall today, trades in calls outnumber puts by 2:1, approx 4400:2400.
Going much higher.
Shorts are in denial. Under the XBox outline, used games can be sold through "authorized retailers only", IE Gamestop. No ebay, Craigslist, non-friendslist, etc. These non-traditional, non-brickandmortar channels account for nearly half of all used game sales. This is a huge positive not reflected in the baked in ad-nauseam negativity hashed over by the short thesis.
Buying calls hand-over-fist today.
MakerBot's closest publicly traded competitor is DDD and should be a positive catalyst for the shares.
On another note, KKD CEO is on MadMoney tonight, good for a nice flip tomorrow.
Very dangerous to be short near-term.
Settlement Date Short Interest Avg Daily Share Volume Days To Cover
5/15/2013 2,222,969 1,477,570 1.504476
4/30/2013 3,273,920 1,158,832 2.825190
4/15/2013 2,953,356 846,972 3.486958
Given the stellar Q2 numbers today, expect PPS performance to exceed last Q's surge. Here were the Q1 results:
March 7, 2013
07:05 EDT CIEN
theflyonthewall: Ciena sees Q2 revenue $465M-$495M, consensus $482.13M
Sees Q2 adjusted gross margin in the low 40s percent range, sees adjusted operating expense in the low $190s million range. :theflyonthewall
07:04 EDT CIEN
theflyonthewall: Ciena reports Q1 adjusted EPS 12c, consensus (14c)
Reports Q1 revenue $453.1M, consensus $449.14M. :theflyonthewall
June 5, 2013
16:16 EDT JCP
theflyonthewall: J.C. Penney initiated with a Buy at Sterne Agee
Target $23. :theflyonthewall
09:25 EDT JCP
theflyonthewall: On The Fly: Pre-market Movers
UP AFTER EARNINGS: Ambarella (AMBA), up 7.5%... SHFL entertainment (SHFL), up 7.2%... Mattress Firm (MFRM), up 3.8%... ALSO HIGHER: Kandi Technologies (KNDI), up 40.8% after saying jointly developed electric sedan approved by China's Ministry of Industry and Information Technology... Avanir Pharmaceuticals (AVNR), up 6.8% after FDA agrees to accelerated development path for AVP-786... J.C. Penney (JCP), up 3.5% following positive comments from Cleveland Research on May sales and traffic. LOWER: US Airways (LCC), down 3% after announcing May traffic data, downgrade to Underperform at Bank of America Merrill Lynch... JA Solar (JASO), down 8.3% following downgrade to Sell at Goldman... Trina Solar (TSL), down 6.5% following downgrade to Sell at Goldman... Penn West (PWE), down 2.7% after lowering quarterly dividend, naming new CEO, saying company will explore strategic alternatives. :theflyonthewall
08:33 EDT JCP
theflyonthewall: J.C. Penney sales continued acceleration in May at Cleveland Research
Cleveland Research said J.C. Penney sales and traffic continued to accelerate in May driven by the reintroduction of circulars and coupons and that aggressive inventory control is resulting in positive channel commentary for June and July. The firm now expects Q2 comps of flat and EPS of (50c) vs. consensus (80c). :thef
A little long dated - but nice $10K+ bet just crossed; 150 contracts bought at the ask ($.71) with open interest of zero, targeting PPS 70% higher than current levels.