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Deckers Outdoor Corp. Message Board

jwm1031 179 posts  |  Last Activity: Feb 23, 2015 7:33 PM Member since: Feb 15, 2012
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  • Reply to

    Valuation

    by timsummers119 Feb 2, 2015 12:56 PM
    jwm1031 jwm1031 Feb 2, 2015 1:39 PM Flag

    Then it would follow if you think the core is worth $2--5 B that the stock is presently overvalued by $5 to $10 per share? I can't convince anyone that the Baba shares are laden with built-in taxes to be considered.

  • Reply to

    Valuation

    by timsummers119 Feb 2, 2015 12:56 PM
    jwm1031 jwm1031 Feb 2, 2015 1:35 PM Flag

    I understand the basis split in reorganizations. I've done several in my life, including 355's. I would suggest that the basis split will be more like: $20 Yhoo, $24 Spinco.
    Yes, if Baba acquires spinco in a stock for stock or a triangular merger down the road, it will own Spinco as a subsidiary and can then liquidate it with tax advantages on its own stock. If Baba does this it will be a couple of years down the road. Further, since it works with Baba only Baba has the bargaining power and is going to want half or more of the savings. I understand all of this but I don't think Spinco will trade with a value fully assuming this. And, in the meantime you have a long term hold on baba to suffer through. Like I have said, I like Yhoo and think it has growth potential but I think Baba has no place to go but down in the next 11 to 12 months. It has some huge lockups expiring in March and then later in the year. And what everyone is discounting is the non disclosures about its meetings with the government officials on the counterfeiting issue. That is huge from a securities law standpoint and everyone is dismissing it as no harm, no foul. Their decision to not fully disclose that is just about as bad as the Seahawks passing for a touchdown when you have the best runner in the league and one yard to go. May end in the same result too.

  • jwm1031 jwm1031 Feb 2, 2015 1:12 PM Flag

    It committed the ultimate sin, nondisclosure of all material facts about the Chinese government and counterfeiting. The securities litigation attorneys will tie them up with lawsuits and no one will want to own baba pending the outcome.

  • Reply to

    Valuation

    by timsummers119 Feb 2, 2015 12:56 PM
    jwm1031 jwm1031 Feb 2, 2015 1:05 PM Flag

    It's already valued at $10 B but you just can't see it. Total market cap right now is $42.25 Billion:

    Core -- $10 B
    Cash-- $5 B
    Yahoo Japan-- $4.2 B
    Baba stock $34 B minus $10 B built in tax = $24 B net
    TOTAL $43.2 B

    Pretty close to actual market cap and using your Cash and Yhoo Japan numbers. Remember, the tax in Baba shares does not go away in the spin-off, just deferred.

  • jwm1031 jwm1031 Feb 2, 2015 12:58 PM Flag

    Disagree, Baba is going to sink badly. It will become untouchable with the counterfeiting / securities lawsuits.

  • jwm1031 jwm1031 Feb 2, 2015 12:05 PM Flag

    I don't think anyone is going to buy Yhoo until Baba shares are gone. I like Yhoo but don't like baba at all. I see baba going down over the next couple of months with the lockup expiring and the counterfeit / securities disclosure issues. You may discount the counterfeiting issues but the bigger deal is not disclosing all about that in their offering. That becomes a violation of the securities laws and they will use that to hang them for anything they want. Not a good place for baba right now and, unfortunately, it is going to drag Yhoo down with it. I exited my Yhoo shares this morning. Will be back in the mid 30's. In addition the analysts are not understanding the spinoff and think there is a "$16" per share savings which is just not the case.

  • jwm1031 jwm1031 Feb 1, 2015 6:50 PM Flag

    Scott Walker and Ben Carson

  • jwm1031 jwm1031 Feb 1, 2015 5:08 PM Flag

    And you have a crystal ball since futures aren't open yet and you're looking at Friday?

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 3:00 PM Flag

    Can you not understand that the tax we speak of has nothing to do with your IRA? Spinco gets 34 B of baba stock. It has a $10 plus tax built in. Spinco sells baba stock pays tax and there is $24 B left to distribute to Spinco shareholders. Shareholders pay tax on gain on Spinco shares unless you hold it in an IRA. Then only when you take it out. If the baba stock increase in value by $100 B then Spinco pays another $35 B. If you can't understand that I give up.

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 9:44 AM Flag

    Yes, understand that 355 is a tax deferral mechanism. Tne end tax results end up being the same down the road.

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 9:42 AM Flag

    If Baba buys shares of Baba from Spinco there will be full tax. If Baba acquires Spinco by either buying Spinco shares, or more likely, in a tax free stock for stock where Spinco shareholders end up with Baba stock and Baba owns Spinco as a subsidiary there is a different twist. For Baba only, since we are dealing with Baba stock, Baba may be able to liquidate Spinco and take back its stock tax free. Baba is not going to do this for free, however, they will want a piece of the pie and will bargain to pay Spinco shareholders less than full value. This also is not going to happen overnight. Any indicia of a preconceived plan will invalidate the 355 transaction. I may take a couple of years before this happens if it is the long term plan.

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 8:40 AM Flag

    And there is no tax to yhoo when they transfer the baba stock to Spinco. But for section 355 that transfer alone would be taxable. Ok that part is done is tax free and we agree that was the 355. Now spin holds baba stock and has the $14 B tax still built in. Believe it. I've done 355 transactions before. It's Sunday and I have better things to do. Ask Pebble for a second opinion as he understands this.

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 8:19 AM Flag

    You are not getting baba stock. Spinco will own baba stock and you will own Spinco stock.

  • Reply to

    with the annoucement of the spinoff

    by lucetteo1 Jan 30, 2015 12:50 AM
    jwm1031 jwm1031 Feb 1, 2015 8:07 AM Flag

    What you are not understanding is the $14 B you reference is a corporate level tax that happens at the corporate level and affects the value before it ever reaches your IRA.

  • jwm1031 jwm1031 Jan 31, 2015 4:41 PM Flag

    But whatever they pay for the baba shares owned by spinco are to the CORPORATION, called Spinco, and subject to about a $10B tax. You as a shareholder will not realized a $34 Billion value, but only a $24 Billion value out of your Spinco stock. I can buy baba shares on the open market at market value, why would I pay more buying from another holder?

  • Reply to

    Easy math

    by xx369 Jan 31, 2015 5:54 AM
    jwm1031 jwm1031 Jan 31, 2015 4:17 PM Flag

    OK, it is a tax free spin off, agreed. But after it is over Spinco holds the baba stock and you are a shareholder of Spinco. The baba stock is worth $34 B but there are $10 B of taxes to pay sometime. You, as a shareholder will get $24 when Spinco sells the stock and pays taxes. So, anyone buying your shares will not pay you more than $24. The taxes do not go away, they are just delayed. No different than if yhoo continued to own them and sold them down the road.

  • Reply to

    Spinco - YHOO

    by mlsmarket Jan 31, 2015 3:09 PM
    jwm1031 jwm1031 Jan 31, 2015 3:25 PM Flag

    If there is a prearranged plan for Baba to purchase Spinco then the spinoff itself will not qualify as a tax free spinoff under Internal Revenue Code Section 355. I believe that is why Baba supposedly was not notified of this beforehand. The requirement is that Yhoo cannot spin the stock off to Spinco "with a view to selling it".

  • Reply to

    after being outta here for most of the day

    by pebble16x Jan 31, 2015 2:19 PM
    jwm1031 jwm1031 Jan 31, 2015 2:35 PM Flag

    Hotmodel, you and Pebble are the only ones that I think understand this. Totally agree with you.

  • Reply to

    Easy math

    by xx369 Jan 31, 2015 5:54 AM
    jwm1031 jwm1031 Jan 31, 2015 2:33 PM Flag

    $19 to $20 per share****

  • Reply to

    Easy math

    by xx369 Jan 31, 2015 5:54 AM
    jwm1031 jwm1031 Jan 31, 2015 2:32 PM Flag

    Here's the real math: $34 B in Baba stock, less $10 B in tax nets $24 B which is $24 or $25 dollars of Yhoo's $44 price. That leaves $19 to $20 a share for Yhoo's Japan, cash and core values..........I don't know if that is sufficient but let's say $7 for Japan, $7 for cash, that leaves $5 to $6 for the core business which seems low to me. So, without Baba stock it looks to me like you can buy Yhoo Japan, cash and core for $10 to $20 per share based on the present market price.

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