Good questions ... and I'm neither a paid basher or someone who always picks the right points to enter & exit. Methinks, those people don't post on Yahoo for any reason whatsoever.... You are obviously still in love with the co., and when I said I liked some of it -
a) I DO think that TV has long needed a helping hand in terms of enabling mere mortals to get the most out of it. Too many channels, too little time in most people's lives, hence a huge opportunity in times past, probably STILL ... but maybe not as much & not for long.
b) I had a big long position going into the most recent quarterly earnings report. Fortunately, even as a non-technician, the dumping of shares going into that registered on my conscientiousness, and I bailed out almost entirely before the Street voted with its feet.
I've compared TIVO to Blackberry in the past, and in some ways the comparison looks sharper than ever. Don't forget - if you ever knew it - that before BB all but died, they bet the ranch on rolling out a spiffy new ... O.S. and some toys that incorporated it. (Sorry, they were phones.) ... I admit that TIVO's Roamio was much less a bet-the-ranch play, but they will kiss off quite a bit of the settlement money NOT gaining traction with it. You want market research - pay for it! - but I trust this particular seat of the pants judgment. You need lotsa VERY good advertising to move stuff like this, & I watch enough TV to know that TIVO cheaped out on that.
Again, the thing I hold against TIVO the most - ditto, BB - was a man at the helm who just doesn't seem to be equal to the task. You don't have to be the smartest person in the room if you have other things going for you, but I fail to see any with Tom (He's dumb AND arrogant.) He smacks of BB's leaders over the disastrous last 5 years - he was at the right place at the right time - ONCE - but this is just too cutthroat and changing a field for an empty suit to work out well for investors.
Only a buyout can save you/him.
What a great generalization! (Does cynicism get you good-looking women?) Good luck going against bigger and better brains than you have!
Yes, there's some truth in what you say - I wouldn't bet that 1 million "GS"-influenced shares got out last week at much better prices - but I think this is a harbinger of a spate of downgrades, perhaps coinciding with leaks that a Roamio write-down will grace the next quarterly report.
There was a straightforward comment in an otherwise moderately bullish analysis of the last quarter & the report which followed it from another analyst - "Investors are afraid of what Tom will do with the settlement money." ... Yup. They should be. When you see your core business very much at risk ... and you have "intellectual property" that's TRULY approaching its expiration date, you either sell your company - my biggest fear - or you try to stay alive by hopping somebody else's train.... Tom strikes me as the type of guy who'd rather take the latter course, so that risk offsets the buyout one that shorts have to bear.
Meanwhile, I look for an ugly quarter or 2, ... and with a gazillion shares in "long term growth" portfolios - the name notwithstanding, they abhor ugly quarters - look for $12.50 to get tested sooner rather than later.
With a headline like yours, I probably should just ignore you, but maybe you can/will learn. OF COURSE, an analyst needs (per firm's guidelines) to pick numbers going forward. You're taking out of context the squooshiest of numbers. The analyst trimmed close-in quarters in a non-trivial way along with the downgrade.
This was an analyst who re-iterated a buy after a "controversial" quarter 60 days ago or so. Methinks, this downgrade is done with a wink - i.e., "Neutral" = "on further review..." and I have money on this being the case - i.e., a big short position. In a month or 2, the call may look "inspired." ... Meanwhile, there are actually a few good reasons NOT to cause a panic. Some people probably see the 2-3 bounces from 13 to 13.5 as just volatility. I'm thinking that when this range REALLY gets violated, we could see $12 in a hurry.
Probably, s/he's just frustrated that TIVO - in an eventful year where they settled at least one big lawsuit - went nowhere and shows signs of more of the same in 2014. That is, it very much underperformed as a stock.
But talk about someone needing a reality check. Not only is $10 way closer than $100, it's painfully easy to see the path that will take it to that lower number, just as it was with Blackberry a year or 2 ago, and depending on how good your vision was in that case, you could have put a short on at $75 or 55 or 35, etc., and if you had the courage of your convictions, it probably got down to $6 before finally (maybe) bounding up to 8 or 9.
TIVO is selling yesterday's newspapers, and that seldom works out well. That is, set top boxes are painfully clearly en route to 8-track or buggy whip status. PLUS, it's dependent on a control freak of an industry - cable - and the terms of their contracts have - forever - told anyone with a brain that even when dealing with Podunk Cable Company, TIVO gets table scraps. Sure, if they got those little payments for 20 years on enough customers, they'd have a good business, but ... is there anyone who thinks that will happen?
Meanwhile Goldman got a kind of scoop - analysts hate to go negative, but every once in a while they do their job - knowing that short-term (which they alluded to), TIVO's position re its cable customers has gotten grim ... at the same time that they brought to market a product that didn't catch on. So they'll write what must have been a HUGE investment down - or not, but the analysts will see it coming - and they'll start to beat a drum about "the cloud," where they'll get to go toe-to-toe with Amazon, Google, Apple, etc.
Who do you like in that contest?
Tom made a big deal a quarter or 2 back about his company having moved into the black. Of course, there was some accounting "trickery" involved, but the key thing - it suckered me in for a bit - was that he asserted that there was "no turning back," i.e., it was profitable ... TO STAY.
Well, fast forward to today, maybe 6 months later, and methinks we'd see a big plate of "crow," if we could see anything at all ... and it wasn't the case that he'd rather order prime ribs, since shareholders are paying for it. In plain English, how does a team justify compensation in the tens of millions when they've delivered zilch to shareholders ... and have made a hash out of a new product launch that was something of a "watch us reinvent ourselves" event.
It won't be long before Ackman or somebody like him points out that TIVO's emperor (the whole company, in fact) is not wearing any clothes. Ask yourself what a fair price is for a company that has a business model that is flawed beyond repair, and one that's still owned widely by institutions who cannot help but see signs that a pretty strong balance sheet (courtesy of the settlement) is starting to hemorrhage. Hint, it's a one-digit number - and not necessarily 8 or 9.
Sentiment: Strong Sell
I suppose you're not as nutty as tim thinks, so ... NO, I am not a perma bear on anything or any stock. Neither do I go back with this company or stock more than 6 months.
But you ARE brain dead in ignoring rule #1 re investing - consider the future, not the past.
TIVO *did* have a better mousetrap 2-10 years back. Too bad they had to "waste" quite a bit of time and money to keep others from stealing their best ideas. Don't kid yourself - while the settlement sent a ton of money their way, it's a lot like those people who pursue medical malpractice suits and quite a bit that's similar.... By the time the lawyers have gotten their piece and 10 years have gone by, the plaintiffs (even the successful ones) are often far from "made whole."
Anyhow, the terrain has changed from even 2 years back - if you haven't noticed, there's truly no hope for you. Has TIVO kept up? NO - it looks to me like they've gotten too ingrained with a set-top box model. It's painfully similar to land-lines - something that took 100 years to get to 99.9% "penetration," and the unwinding process (dropping back to 70% of the under 30's) took/takes 5 years.
TIVO's not unaware of the change, but you really have to wonder whether 3 years focus on SUPER-TIVO (a/k/a Roamio) ever made sense.
Just as Best Buy had an unjolly Xmas, I'm betting (literally!) that TIVO did, too.
As luck would have it (for the longs), a little covering and a VERY strong market for tech stocks has left this rotting fruit still hanging almost proudly from the tree. Of course, it hasn't participated in most updrafts for at least a year, but that's because its rot is hardly a secret.... And just as with BBRY, you can defy gravity for at least a year or 2 if enuf people think that "they always have the exit strategy of taking a ton of money from X via a buyout." ... But just like BBRY, it's a lot easier to plug in values for X than it is to find one that works. The logical buyers look at buy vs. build & TIVO doesn't compute.
is that 50% over 6 years ... or 10? If you could do higher math than 2 + 2, you wouldn't be boasting. And I have no other aliases or whatever. If you go over to investor village for an even more negative take on TIVO, you'll see 2-4 bashers - I guess you won't, since you clearly have a closed "mind" or what passes for a mind in your case - and I suspect that there are at least 2-3 different people exchanging thoughts.
Remember, first you'll get either a pre-announcement or the kind of miserable action (today again?) that tells you that someone high or low at TIVO leaked some not so great numbers for the recently concluded quarter.
If you truly have a profit, now would be an awfully good time to book it, because you may not have one after what promises to be one ugly conference call. Remember, your money is being "managed" by a CEO not all that far above Daffy Duck in any important respect. If he were your Dr., you'd change doctors!
Don't be so sure.... Almost from day one of Cable TV - and that goes back 50 years more or less - an eternity re anything "tech" - people have thought they were "living on borrowed time," "feeding on scraps from the table," etc.
I'm sure they, more than most industries, buy outright the occasional politician ... and make themselves a part of so many pols' fund-raising that they have lots of friends in the right places.
And there are probably numbers that would allow even a couple of top 10 cable companies to say, "We outsource this to TIVO and we're cool with that."
Yes, if/when they go way beyond laying off 5 people to taking a 8 or 9 digit writedown, I figure the stock sheds 50 cents, but that's a big IF. (I still expect it, but it may be that the easy money shorting this stock has already been made. I'm pretty sure Tom can/will find something markedly positive to say or show almost concurrently with any big bad news - or he'll die trying.)
Last, this IS a company if/when it's facing an inglorious spanking that probably can cushion the blow by announcing that they've engaged this or that I.B. to explore strategic alternatives.
The o.p. on this thread DOES have some "analogous" bad experience to share, but times have changed. "Outsourcing" engineering strikes me, I admit, as kind of nutty, but I'm not the right person to comment or evaluate it.
Still - yes, there's a lot of back-and-forth here - I come out negative, because it sounds like this is a story TIVO hoped to manage better than it's turned out. INSANE, given that even if there are only 5 laid off employees (highly unlikely), when you consider how easy they - and the 1000 1st & 2nd removed friends, relatives, etc. - can (AND HAVE) make the story surface & maybe get traction.
If you or I saw someone acting suspicious, we'd do more than notice. Whether yesterday's and today's stock action constitutes a genuine reaction or just people avoiding an unpleasant (possible) surprise, it's costing longs tons.
It's about time for a pre-announcement - something to do with Roamio and the shape of things to come.
More than ever it's looking like GS got wind of the "change in direction" (i.e., an almost certain move away from "retail," hence a genuine redefinition of the company's game plan) and guessed right that it would sow unrest among the monster institutional holders/holdings.
And I stick with my guess that a disgruntled layoff-ee (or a friend/relative/ex-colleague of same) got TIVO some further unwelcome "sunshine" in terms of Engadget and others telling what little they could verify - anyone notice how little news (and staff, probably) these ad-sites proffer?!
But apart from true blood-letting if TIVO saves too much bad news for a conference call, I'm pretty sure their many lawyers have apprised Tom that it'll be godawful hard to defend against class action suits if he keeps it all under his hat.
So, maybe today, maybe after the market closes or before it opens on Monday - by mid-week next week at the VERY LATEST - I predict an ice cold shower for those who've oh so clearly substituted faith and hope for good judgment, i.e., didn't sell in the last 60 days, roughly the time when it became clear that TIVO decided that Roamio would either make it on its good reviews and "holiday extravagance" or NOT!
Well, GOOD MANAGEMENT has to make tough calls about cutting off a leg if that's the only way to escape a trap, but TVO's VERY BAD MANAGEMENT screwed the pooch with singular ineptitude. See you around 9-something!
Just the quick thought that apart from the fact that TIVO is contemplating entering a niche with formidable competition and even being a year late probably translates into a major handicap, there are these 2 "barriers" to a successful entry.
1) Do you think TIVO's good name recognition might be offset by the MANY people who either feel like their pricing and ads constitute a rip-off ...or who've experienced customer service issues (even if many of those trace back to TIVO's love-hate relationship with MSO's?!
2) With set-top boxes, maybe they had one or 2 formidable competitors and some comfort that no Chinese company could/would come out of nowhere to exploit any opportunities that might exist in TIVO's "formerly" (?) main niche.... If they move into the cloud, do you think the likes of John Malone and Roberts (Comcast) are going to miss the fact that there are many thousands of software engineers available to build either a best-in-breed product or an ok-AND-it's-ours product that will consign TIVO to a partial migration of its existing customers and accounts?! ... That is, TIVO would be lucky to hold onto 60% of its users by telling them - "Yes, you'll pay the same or maybe a little more ... and we'll take away our gear, since you won't need it ... but you'll have a Netflix-like experience." ... Of course, they'd phrase it better, but in an environment where EVERYBODY with a brain is looking for alternatives to cable, do you really like the prospects of the flies (TIVO) who survive on elephant dung?! ... Sorry to be a little gross, but bottom-feeders and leeches seldom command loyalty or Wall Street love. It's one thing to accept 10 cents (in a year) EPS and a $12 stock price if you see a company that might have both a niche and an appeal to someone looking for an acquisition. Take away that niche - and TIVO has certainly scared people that that's more than possible - and the combo of big expenses & no "moat" makes me think that this could easily be a $5 stock.
Blackberry at $75 supposedly had $30 in cash on the balance sheet. It got down to $6 subsequently.
AMAZING INFO, J - you have to part with quite a bit of cash when you're defending your indefensible bad business, one very much in the process of self-destruction. Not to mention you probably get your #$%$-cat Board to revalue your options, worth oh so much less to Tom, boo hoo, now that he's mis-spent a big chunk of the settlement money.
Fire the engineers - SMART. Damn, we better give them some severance money....
And J - next time you make a nice brief, moronic post, with the obligatory mis-typing that lets us know that you're no better with words than you are with numbers, talk up the "intangible asset" that all of TIVO's intellectual property represents. Be conservative - value it at $10/share. With just a little creativity, I'm sure you can "prove" that TIVO is selling for half of what it's worth.
And when TIVO's stock gets to be selling at half of what it currently sells at, you can (AND WILL) pretend that you never wrote that drivel.
Sentiment: Strong Sell
Very solid post. I'd only add that there's enuf nervousness about the market and tech - yup, "this week" (which I add because it may just be "noise.") - that there are probably analysts who have all but hit the "hold" button (and not on their phone!) ... and would need to hear some awfully good news (borderline "pumping" from mgt) not to press/click/send/whatever - i.e., try to be the first to advise clients out (or at least look like they had good insight re the earnings & call.)
If it's got some heft - especially - there's a sound when what's left of the connective wood tissue that sometimes elicits a "Look out below!" cry.
We've all seen this TIVO movie before - last quarter - when for every 5 cent move up, you could point to (by day's end or week's end) a 10 cent move down. Good days for tech, bad days, the tape told the tale!
And it's happening again. Who hasn't heard the classic definition of insanity - "doing the same thing over and over again and expecting different results." ?!
Pattern recognition has its limits, ... and history doesn't always repeat itself ... but nothing's different a mere 3 months later. TIVO is gonna disappoint. Plenty of "big guys" have gotten the word - believe me, Goldman's "avoid" (whatever they said when they stopped saying, "Buy" was literally "THAT WORD," but you'd have to be naive beyond belief to think that the "whisper numbers" are not the same as what poor Yahoo prints.
I'm not gloating - and I (and all shorts) could get badly burned - but if you don't smell smoke yet, better see an E-N-T guy in a hurry!
You obviously have a very good handle on GLUU - how you came up with your numbers is almost less important than your accuracy, ... but I do part company with you re "playing it" at this point.
As with Zynga and a ton of other "fallen angels," either they've reinvented themselves ... or find themselves REALLY well-positioned in what is/may be (big difference, I know, but sometimes perceptions matter more than reality) a very hot "corner"
... or - see Twitter, FB 6 months back and a host of others - the REALLY smart money knows that they've just picked off some low hanging fruit and the stock is WAY overvalued at present.
I come down on the side of the bull case, here, and I admit that the word "bull" troubles me.
Somebody on Seeking Alpha wasted even more words than I usually do writing about Ubi Soft - wasted in that he couldn't have more than 100 readers, total - and he made a couple of points about China that resonated.... I don't know when (if ever) they'll have freedom of speech ... or cars (I'm talking about the hundreds of millions of families in THEIR "middle class"), but game consoles and phones they will have ... and to me that puts companies like GLUU on steroids! (in a good way.) ... Again, if my perception is accurate and comes to be shared by even a few hedgies or funds, you'd be insane to be short at 5.25 or so.
Yes, the 2 or more bubbles which burst in the last 15 years should inform one's every decision, but there's also many a lesson to be learned about how/when things get ahead of themselves. That is, GLUU at $10 MIGHT be insane, but it's not insane to imagine that they'll get there - in a hard-headed sort of way.
So, I guess we just differ a lot about what constitutes being over-valued for this stock/company.
Again, kudos on a great call - and you obviously know that it's never really nuts to book a profit of the type you were able to log!
I'd give you the last word - although you mostly repeated what you said initially - except that you ARE smart & this IS interesting. First, my only short is TIVO, and while all shorts have elements of it, I think your call on TWTR is just your "gut" talking. Of course, the Peter Lynch approach is better than most, but it almost never pays to narrow it down to just your immediate family. I can't tell you how many people I see playing that Candy game on their phone in NYC. There's a cute note in Marketwatch's "daily update" today about a moronic game with "birds" in the title. I'm ambivalent about every saying "superior" things like "Never underestimate the stupidity of the average person," but with mobile games, I think that simply must be said. So, I try to be rational and assume that people with way too little going on in their lives actually think that playing "Floppy Birds" (that's it) is better than reading or meditating or ... pretty much anything else.
It also bugs me - as it does you, I think - that companies "get away with" reporting that emphasizes the numbers you get when you leave out "stock compensation." If the SEC had teeth, they might weigh in on that.... BUT profitability really is secondary to things like marketshare and penetration and hiring good people and ...
I'm not sure I'd go as far as Amazon and its lovers do in terms of never seeming to be able to turn the corner, but this is like Sony getting out of the PC market yesterday. There aren't enough chairs for 3-5 "big players," so make sure you're not one who goes 6 months without a hit. That's expensive, but we all know that GLUU's payday comes on a buyout, not when they can declare a 10 cents quarterly dividend with the expectation that they can grow it from there.
I passed on Google, ... and I suspect that it looked then a lot like TWTR does now. Yes, the PLynch in me shoulda kicked in, since Google had become my 6th finger - not so TWTR - but I'm sure you know intuitively what happens if you can grow 50% a year for 10 years. (And *I* admit that that's harder than hard. Again, I only mention TWTR because when one is heading toward the sidelines - sometimes absolutely the right place to head - one does well to see if there's something going on while your back is turned. I submit that it's GLUU almost surely "coming into fashion" along with spring. And really - "IPO price" - we all know what a joke IPO pricing is. Insiders have a cost basis of maybe 10 cents/sh. They know that what separates a billion market cap from $100 MM in their biz is a good call or 2 and/or a ton of luck. If ZNGA were to offer $6 over the weekend - no, could never happen, I don't think - a deal would get done at $7.50 or less, whether with Z or a "white knight."
Good one.... I know I suffer (and pay!) for my inability to hold stocks "long enough," but what ARE you thinking?! ... I say this "with affection" - obviously, "she's done you wrong," but the real question is - are you throwing good money after bad at this point. I'm not talking about "doubling up," but just to hold this stock into earnings that might be like adding some veggie to a spinning Cuisinart strikes me as masochistic. You can't enjoy losing money, and that's what I'm predicting.
If you're still a "true believer," of the type that says, "Dammit, there's absolutely nothing that more people spend time on in greater amounts than TV and Tivo enhances that experience," consider getting out of the way of the bad earnings luge or garbage truck and buying back any stock you sell at a dollar or 2 or 3 less.
Yes, as much as possible Tom will attempt to drown out a ton of bad news - "we've given up on what's made us almost a household name because times have changed" - with b.s. about how now they're a 21st century software powerhouse.
You must know how conference calls work. Analysts tend to be respectful, but I hope everyone is muted while he talks, because laughter would only be exceeded by shouts of "YOU LIE!"
I believe there was a company called Zapata - once something in "energy" - that tried to reinvent itself in the late 90's (Internet "boom years") as an internet company. It's as if Charmin said that they "got it," that T.P. is no longer a viable product? ... and they were morphing into a waste management company?
Make no mistake - Tivo is essentially leaving a biz where it's #1 to bump heads with Apple, Amazon, Google, etc. ... This isn't a close call. 99.9% of the smart money will back Goliath (or the 3 of them, absolutely all hell-bent on decking Tivo) over David.... And rightly so! (Plus, you wouldn't even get a hundred-to-1 payoff if Tivo were - miraculously - to prove equal to the task.)
You guys - all of you - must be on drugs. Yes, Microsoft will need a little serious "tweaking" in terms of business strategy, but it doesn't need reinventing. It's exactly like IBM 20-30 years ago - they could live and prosper forever just doing what they've been doing ... and dabbling in growth areas with the gazillions that their cash cow throws off. A game company? - into gambling, jokes like Farmville, etc. GET REAL.
Mind you, I like Zynga at this point.... And none of you mentioned the one most obvious potential buyer - FB. Talk about a company that "gets it," and you can flesh out the "it" the 2 or 3 ways that make sense!
And don't you "mobile is everything" one-noters ever learn? By the time that it's "obvious" that this one has the others beat cold, one of the also rans or some newbie is hard at work to come up with "the next big thing."
WIll Google Glass figure into it? Certainly thought control is no longer the stuff of science fiction.
There's plenty of room - and reason! - for all 3 of mobile games, desktop-based ones and console-based ones. The 3 won't grow at equal rates, but watch out thinking you can even pick from the 6 ways those 3 guys could rank on this or that scale, much less pick the company in the winning category, much less buy it at the right price and sell it at the right price.
Don't forget the poor BOA/Merrill guy earlier this week - even if he'd like to forget this past week. Even the best strategy requires darn good execution, and have we really seen any evidence that Boy Genius CEO is as good at growing as he is at cutting?! How much future success is "baked in" at this point? I play tons of Words With Friends, and it is truly pathetic what a bad job Zynga does with a product that COULD make them some serious coin. Face it - half of Z's market cap is predicated on gambling going online and it proving to be a winner there. Again, I happen to like their chances there, but too many posters have lost touch with reality.
Quietest darn board for a stock/company with what surely appears to be "rooting interest!"
Any of you longs have a clue ... as to how TIVO appears to be defying gravity. I got out yesterday at 12.30 and feel relieved, obviously.
I don't know how good the guys at "Systematic" are, but they surely did put down a big bet sometime near year end. I think it's safe to say that they don't expect the strinkeroo conf. call that I was (am ??) predicting in a couple of weeks.
I'll say this - fwiw. This stock will surely move 50 cents one way or the other during that time, maybe a dollar or more. I'd be shocked if its puts and calls had that much volatility baked in.
Again, you won this round ... for sure!