I do not believe LinkedIn is a company valued on earnings. Other momentum stocks like AMZN rarely even have earnings yet sell for phenomenal multiples of revenue. LNKD is being valued for growth as a momentum stock, and it would trade at enormous multiples of revenues even with very negative earnings.
What would be a normalized EV/EBITDA level for the temporary lodging industry? I'm assuming somewhere around 5x to 8x depending on where you are in the cycle?
What was the EV/EBITDA for Civeo when it went public?
I did live through the Internet bubble, but that was a totally different dynamic. In 2000 some analyst calculated that all possible growth in telecom could never pay back the investments already made. That shut off the money flow to the entire sector. That in turn stopped all growth, since it was largely fake growth based on raising money to buy advertising at uneconomic prices.
Companies that were growing at 30%+ per year simply imploded and went out of business quickly, because they had no real business and the shortfall in funding rounds proved that. LinkedIn has a real business, and they are a fully funded operation. I don't think they are worth their market capitalization, but I also don't understand how a 3% shortfall in revenue is anything more than a yawn.
I'm not going to defend LinkedIn as an investment. I see it as a very overvalued momentum stock. Having disclosed my bias, I do not understand how the market gives this stock a 25% haircut based on the announcement. They were originally projected to have $2.988B of revenue, and they announced new guidance to $2.9B. That is a 3% revenue shortfall. How does that begin to translate to a 25% reduction in market capitalization? What's the rational theory behind that adjustment?
On options, I couldn't disagree with you more. High premium indicates that the volatility is already in the option price, and the time decay eats everyone who is not a PhD in mathematics alive. High premium option bets are for suckers.
DDD has had a 25% borrow for the last few months yet someone holding it short in that timeframe did not make a profit, as the borrow cost offset the decline in value. That high borrow cost means you need to hold for a short time period and time the short absolutely perfectly.
I think you would be better off in DDD buying a put that is well into the money. The premium in this case would be less than the borrow cost shorting outright.
I looked at the borrow rates on Interactive Brokers to short DDD, and they are astronomical. IB wants 25% interest rates to borrow DDD to short it.
The stock has enough capitalization that this is pretty remarkable. Can someone explain how the borrow rates have gotten so twisted?
The interesting clue here is that the preferred shares are climbing in value at the same time the common is selling on high volume. Maybe they are going to dilute the common? That strengthens financial position and better protects the preferred dividend.
Which vendor has good day charts - with different timeframes selectable - showing current pricing for day rates for crude tankers and product tankers?
bigbear I think you have it reversed. Tanker stocks went up because oil went down. Tanker stocks are under pressure now because oil is beginning to move back up.
Low oil prices meant more contracts for using tankers for offshore storage facilities. Oil at low prices increases volume demand, hence increases tanker rates.
I think that just side steps my questions. I understand small brokers sell for a premium because this is a buy out environment. The issue is that NHLD is having to completely modify its earnings profile and no one understands (yet) what their revised earnings will be. That creates doubt about valuation even if you understand what the metric should be.
Here is a devil's advocate argument, and I would appreciate your countering it.
As part of the uplift to NASDAQ, NHLD had to give up its most profitable alternative product business. Dec 2014 quarter reflects this with very low 0.5M earnings. If that trend continues, they earn only 2M per year, which on a forward basis puts them at a PE of 20 against the current share price.
They are already trading below book, but you could imagine the market only giving them tangible asset value and maybe writing off the goodwill, so unlikely book value is a protection when the earnings are in doubt.
I'm looking for a new convertible. I'm not discussing the convertible that matures in April.
Does DHT have any public debt, either bonds or preferreds?
I'm trying to find a crude oil tanker company with recently priced convertible bonds or convertible preferreds. It doesn't have to be a US based company and the debt can be in a foreign market.