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Oclaro, Inc. Message Board

ophelia_paine 36 posts  |  Last Activity: Dec 12, 2014 3:22 PM Member since: Nov 23, 1999
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  • Reply to

    network revamp

    by ke_moe Dec 11, 2014 3:51 PM
    ophelia_paine ophelia_paine Dec 12, 2014 3:22 PM Flag

    I saw the morons on CNBC talking about how the FTC was so smart to nix a TMobile Sprint merger. The FTC would rather have 4 competitors than 3 healthy ones. Well -- now it is looking like we may have just two. Also, in this environment, who is going to be interested in deploying capital.

  • ophelia_paine ophelia_paine Dec 8, 2014 8:53 PM Flag

    I'm not sure where you got you data -- or maybe you are "rounding up" to $100 billion. If you go to the SFTBY Sept 2014 balance sheet you will see that they report a total interest bearing debt (current and non-current) of 9.98 trillion yen. Adjusting for the cash of 2.45 trillion yen, they report net debt of 7.53 trillion yen. Included in that total is 3.09 trillion yen (net debt) of Sprint -- which SFTBY is not directly liable for. This leaves "corporate" net debt of 4.44 trillion yen -- that is about $37 billion. Lot of money -- but not $100 billion. If Sprint were to go bankrupt (although no one is predicting this) -- it would actually improve SFTBY's balance sheet!

    I think that one thing that holds SFTBY back is that it is so difficult to figure out their financial position -- just like many here have trouble doing.

  • ophelia_paine ophelia_paine Dec 7, 2014 9:12 PM Flag

    I hate to say it -- but it is looking like we will be down again on Monday. Right now SFTBY is down about 1.6% in Japan. It just seems that there is no interest in what Masa Son is trying to do. His latest move was a very small investment in a strange kind of wind turbine company. He is trying to be like Google -- but he doesn't have the creds to do that yet. Masa -- Show us how you are going to fix Sprint (more than just putting a guy on the Board) -- and then we will believe everything else you do!

  • Reply to

    Good thing SFTBY didn't...

    by ankor323 Dec 1, 2014 11:46 AM
    ophelia_paine ophelia_paine Dec 1, 2014 7:09 PM Flag

    Yes indeed. I think that Son has been around the Hollywood crowd long enough to sense that Katzenberg was trying too hard to get the #$%$ off of his shoe and on to someone else's. Why buy the company when you can buy the assets in bankruptcy.

  • Reply to

    Softbank Down For A Reason

    by americananabolics Nov 20, 2014 10:35 AM
    ophelia_paine ophelia_paine Nov 20, 2014 9:18 PM Flag

    Also -- it is very important to note (and rarely discussed) that roughly $30 billion of that debt is Sprint debt, which SFTBY reports as its own because of consolidation accounting principles.

  • ophelia_paine by ophelia_paine Nov 16, 2014 9:38 PM Flag

    NKY is getting its clock cleaned -- and Softbank is going own with it. Kind of ridiculous in that that (1) vast majority of Softbank's holdings have nothing to do with Japan and (2) weakness in the Yen is actually good for Softbank in that much of it's debt is yen denominated.

    I guess that YHOO was the way to play this -- but I just do not trust that team.

  • Reply to

    Acquisitions

    by halk995 Nov 13, 2014 2:40 PM
    ophelia_paine ophelia_paine Nov 15, 2014 12:38 AM Flag

    Yes -- I think that he actually made some references to Warren Buffet in the recent earnings presentation. I THINK that he was joking when he talked about the "Buffet premium" and suggested that he is relegated to a "Son discount" until better performance.

    Actually -- I think that Buffet has become a bit of a paradox. He likes to talk about value -- but the media covers him so much that when he buys something it instantly becomes a momentum play. He is no better than Carl Icahn in that regard. When he buys something it is automatically up 5%. How can you NOT do well when you have that advantage?

    I like Son just where he is -- as long as he can keep his ego in check.

  • Reply to

    Acquisitions

    by halk995 Nov 13, 2014 2:40 PM
    ophelia_paine ophelia_paine Nov 13, 2014 9:08 PM Flag

    It was announced today that Hasbro wants to buy Dreamworks. Let's hope that Mr. Son is not so intrigued so as to complete for it. There is plenty of garbage in Hollywood (they call it content) for everyone to buy. Also, if he needs it -- why buy when you can rent.

  • Reply to

    Oh My!!!

    by oh_my_2035 Nov 11, 2014 1:32 AM
    ophelia_paine ophelia_paine Nov 11, 2014 8:34 AM Flag

    Sounds like John Legere started a new marketing campaign.

  • Reply to

    My frustration....

    by nestofweasels Nov 10, 2014 9:35 AM
    ophelia_paine ophelia_paine Nov 10, 2014 3:57 PM Flag

    Notice also that BOTH Sprint and BABA are up about 4% today. SFTBY up a pathetic 1.5%. It seems that everyone has forgotten that it owns 32% of BABA. Is SFTBY in a witness protection program or something?

  • Reply to

    baba 30 sept'14 88,85

    by mvandelden_nl Nov 10, 2014 11:32 AM
    ophelia_paine ophelia_paine Nov 10, 2014 3:52 PM Flag

    I like your approach of adding to BABA as opposed to switching from SFTBY. We really should see that gap close. i would be afraid of getting "whipsawed" if you sold all your SFTBY and bought BABA. BTW -- I own SFTBY only -- and I am learning how to meditate to cope. ;-)

  • ophelia_paine ophelia_paine Nov 8, 2014 10:25 AM Flag

    Yes -- I saw that announcement about Arora (the former Google -- now Softbank exec) joining the Board. Who knows -- it could be perfunctory -- but I would like to see Sprint aggressively move to partner outside of the traditional wireless world. As a consumer, I would love have a reason to leave Verizon.

    In its "wisdom", the FCC said no to a merger that would give a #3 carrier a fighting chance. (Just brilliant.) Now the free market has to find another way. Don't know about DISH -- as I didn't really understand that combination -- but from a marketing standpoint, a Google tie-in would be compelling. Sadly, I am afraid that Apple would be afraid of alienating Verizon and AT&T.

  • ophelia_paine ophelia_paine Nov 7, 2014 11:57 PM Flag

    Sorry -- I mean't to say $16 BILLION. That is the remaining downside to SFTBY's investment on Sprint.

  • ophelia_paine ophelia_paine Nov 7, 2014 5:23 PM Flag

    Sure it was a miscalculation -- he took a reasonable shot and it didn't play out the way he projected. However, the downside of Sprint ($16 million of exposure to SFTBY at this point) is not monumental. The upside of BABA is substantially greater than the downside of S in my view.

    Moreover, even if S were to tank -- which I do not think is likely -- SFYBY would lose the $16M in market value -- but it would also be rid of over $30B in debt. I calculate that 40% of the debt reported by SFTBY on a consolidated basis is attributable to S. SFTBY is not the obligor -- Sprint is.

  • ophelia_paine ophelia_paine Nov 7, 2014 5:14 PM Flag

    I am giving Son the benefit of the doubt on the Buffett comparison. My sense is that it was a little tongue in cheek (at least I had a chuckle about it -- talking about a Son discount vs a Buffett premium in a self-deprecating way. If I am wrong, I will still give him a pass and say that the point was lost in the translation.

  • Reply to

    IF one bought SFTBY as proxy for BABA

    by jbpsb1 Nov 7, 2014 9:26 AM
    ophelia_paine ophelia_paine Nov 7, 2014 10:57 AM Flag

    Today was a classic case of the irrationality of SFTBY. The ordinary shares were down 0.56% in Japan. So what would you expect the next morning -- given that both BABA and S opened up strong? Maybe a wash? Nope -- SFTBY opened down over 2%.

    I would content if it would occasionally move irrationally the other way -- just once in a while!

  • Reply to

    IF one bought SFTBY as proxy for BABA

    by jbpsb1 Nov 7, 2014 9:26 AM
    ophelia_paine ophelia_paine Nov 7, 2014 10:46 AM Flag

    nestofweasels -- You may be asking the wrong person as I bought a little more this morning. I am underwater and holding. Very frustrating as it was a great call on BABA -- but lousy call on SFTBY.

    I know it is a bit if a cliche -- but SFTBY investor must play this long term. You cannot predict the day-to-day movement of SFTBY. We all see that now!!! Good luck.

  • Reply to

    IF one bought SFTBY as proxy for BABA

    by jbpsb1 Nov 7, 2014 9:26 AM
    ophelia_paine ophelia_paine Nov 7, 2014 10:07 AM Flag

    nestofweasels - I think SFTBY valuation is even more ridiculous than you think. Please someone correct me if I am wrong, but each SFTBY ADR represents about $37 worth of BABA -- and BABA of course is only a part of SFTBY's full value. What number are you using for SFTBY shares outstanding?

  • Reply to

    How can BABA go up and SFTBY go down?

    by pencilpup2 Nov 6, 2014 11:25 AM
    ophelia_paine ophelia_paine Nov 6, 2014 10:16 PM Flag

    It's not that simple. First of all, how are you valuing the SFTBY non-public holdings and businesses? You cannot value SBTBY without considering that. Furthermore, $30+ billion of it reported debt is debt of Sprint. Even if SFTBY sold Sprint for NOTHING, this would eliminate that debt. As a matter of fact, if it sold anything close to one-half of its Sprint stage it would not have to report the debt.. (If Sprint were ever to get into deep trouble, SFTBY isn't going to pay that debt -- they will negotiate -- and that debt will become equity. This is one of the silly consequences of consolidating principles. It ignores the fact that the parent is not responsible for the debt of the subs.)

    We need some creditworthy analyst (yes -- tall order these days) to do a thoughtful break-up analysis of SFTBY. Only then will the stock realize close to its value.

    Right now the stock is DOWN on the JP market -- even after BABA rallied 3%. Go Figure. The ADRs are not going to rally if the JP share don't rally. The volume is all in Japan -- and wimpy US investors are not going to stick their necks out.

  • Reply to

    Golden Goose

    by blueskyahead Nov 4, 2014 6:33 PM
    ophelia_paine ophelia_paine Nov 6, 2014 8:05 AM Flag

    I think that a big part of SFTY's "valuation discount" is due to it s complexity and the fact that it is a mixture of (1) publicly traded positions, (2) private companies and (3) regular operating business (wireless). I think Son joked that SFTBY suffers a "Son discount" rather than a "Buffet premium."

    Sprint is an interesting problem. It has a $20M overall market cap -- so why does it matter to SFTBY so much? The value of its stake in Sprint is less than 1/4 of the value of its stake in BABA. One complexity is the debt -- Sprint has about $33B of it -- and that shows up on SFTBY's balance sheet due to the fact that Sprint is a consolidated sub of SFTBY. Think about that -- SFTBY gets a "market cap credit" of maybe $16M (at best) -- but has to report all of that debt. I am sure there are other more knowledgeable than I on this point -- so please let me know if I am missing something.

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