Sorry for double post - thought the first one didn't go through...
Anyway, the amount of the suit is relatively small (~$200k)...but just wondering what people think of it?
See documents here -
Well during the black-swan of 2008-2009, during the worst bear market in recent memory oil went to $35.
We're 5 years past that and the cost per marginal barrel has certainly increased. If you search Google for "The Middle East Has A Huge Advantage In The Global Oil Market" you will see a business insider article that shows a graphic titled "cost of production."
$70 is understandable but at $40...half of the world's suppliers are operating in the red. That isn't sustainable.
Really? where is this forecast coming from? This is waaaay below the break-even prices for US & Canadian Shale...a lot of production would have to be cut if oil does hit $50 and stay there for a meaningful period...
Hey stuart, i like the idea of contacting US Attorney's Office. Can you email us a sample or a piece of what you wrote to them? Since you were (are?) an attorney you probably have a better grip on the terminology and the nuances of how to phrase the letter/grievance so as to send a right message rather than insult/annoy them.
My email is same as my username. Thanks in advance.
What do you mean they did not scale down enough last quarter? They have more data/facts/metrics for each kiosk that they reveal in filings so I don't feel comfortable second guessing them on that. They have said they will downsize and continue to optimize their remaining kiosks.
Yeah the guidance was lowered - primarily because they raised an additional amount of money which increased interest costs. But still doesn't change the fact that it's ridiculously cheap at these levels (even assuming ecoATM is a dud). Netflix isn't really a good comp because there are ZERO recent/fresh titles there. A better comp is Amazon and iTunes.
Speaking of Amazon and iTunes, there was a question on the conference call about that - "do you see VOD pricing going up or down?" and CEO basically said that studios want to maintain fat margins so he sees the pricing going up rather than down.
Again, cheap on P/FCF basis with a proven business model with pricing power is what makes it attractive for me. Don't get me wrong though - you can make money being short and long and I'm not long because I'm in love with Outerwall, I'm long only because the risk/reward is so damn attractive in being long, as opposed to being short.
Hey P2A, appreciate your comments here. Can you give a rundown (elevator pitch) of the thesis on WAG? Is it a "great business at a fair price" ? Or is it a special situation like EBIX where the market is misunderstanding something?
I don't understand why you keep comparing it to blockbuster. Redbox does NOT have fixed costs like Blockbuster - no stores, no employees to staff each store, etc. Redbox has a lean operating model that can be scaled down to accommodate any declines without imploding. There's no competition and the masses don't have a meaningful alternative that provides them with cheap movies at the 1.2-1.5 per night.
Any other concerns?
Stuart I'll message them on facebook too. Can u tell me what u wrote in the message (briefly) ? Thanks.
Great news! Excellent validation for the long-thesis. Increased my position today.
Heh...580 isn't that huge number...less than $10k outlay.
I'm looking at selling (writing) December 2014, $10 strike price puts to collect a 90 cent premium.
fishart4 - I see what you're saying.
Whether we like it on not, the fact remains that investing is a forward-looking game. Which means past performance doesn't matter at all. You can't invest looking in the rear-view mirror. I see that the stock you mentioned had a tremendous run...but that's the PAST.
Investing involves discounting the obvious and betting on the unexpected. Looking at Gilead, I see almost everyone thinks Gilead will make a lot of money. Looking at EBIX, some people think it won't survive...and has discounted it by 40-50%
Do you think EBIX will come out clean? And if so, what will it be worth? If not, then this stock isn't for you. And of course, no one can pinpoint exactly when things will turn, which is why it's best to own a BUNCH of undervalued stocks, not just a single one.
A company that MAKES MONEY RIGHT NOW is worth 0 because blockbuster went bankrupt...?
I agree. I think it's emotions more than anything, and humans are, by their very nature, full of biases and irrationality.
It is those who can recognize and mitigate their biases and irrationality that can take advantage of the mis-pricing in the market.
@dvds_are_dead: I really want to know - how much do you think is the company - Outerwall - worth? Surely a cash generating entity cannot be worthless, right? I honestly want to know how much you think it's worth.