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Fusion-io, Inc. Message Board

squeezetracker 512 posts  |  Last Activity: 1 hour 11 minutes ago Member since: Apr 5, 2011
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  • Reply to

    from MacauBusiness

    by drjackcar Apr 26, 2014 8:37 AM
    squeezetracker squeezetracker Apr 26, 2014 11:16 AM Flag

    Agree...

    Juicy dislocation opportunities come around about once a year... the truly strong growth stories now trading at market multiples (when they merit significant premiums) will not be on sale for long. Pensions funds, hedge fund clients (and incentive fees) and so forth all need to be substantially more profitable than "protecting capital from losses."

    So while many funds who made 20% or better returns last year thought it'd be easy this year reel from leaving leverage on into this big downdraft are being washed out of their best stocks, those paying attention and having a bit of staying power are on the buyside of late.

    With MPEL in particular, It'll be interesting to see if the short interest came up hard as of 4/30; we didn't box any shares this trip and even pulled the MGM pair! As of the 4/15 report (reporting stealth offsets aside), there was only 1 day's SI... hardly a downside bet. Moreover, other than Cap Research, no one really has a big enough position to drop the shares with a complete sell out (e.g., FIDO sometimes crushes themselves with sloppy sellouts on concentrated positions).

    The quant work on enitda and the buyback (ignore the ~8% of float constraint for now) is pretty powerful stuff. Using 4Q run rate baseline (i.e., no progress for manila, MSC or Tower 5 or on any of the EXISTING footprint), the combined Crown Resorts and Melco positions will go to 77% ownership of ~$1.5B of ebitda, where only $200m or so is absorbed with debt service and financing costs... passing on details, that means they can take out the 10% of shares and pay current dividends with ~2 years of FCF.

    As you likely have calculated independently (and I'll suggest ALL of the legit buyside firms have done), 10% of outstanding shares is roughly equal to 1/3 of the residual float, that is, excluding the Crown Resorts (1/3) and Melco (1/3) ownership.

    Think about that ROIC for them and the new buyback and div motives are obvious. The stock ought to RIP soon.

  • Reply to

    from MacauBusiness

    by drjackcar Apr 26, 2014 8:37 AM
    squeezetracker squeezetracker Apr 26, 2014 11:25 AM Flag

    As noted elsewhere, the timing of the buyback plan coming after the div announcement makes it obvious that Crown needed the cash asap (their weak financials excl MPEL equity pickup and Packer's ambitions to grow Crown Resorts separately from MPEL make the point), and, equally pointed, that neither Crown nor MPEL want to sell out any of their shares anytime soon. That is clear: if they were willing to sell out at $45 or better near term, they would have not announced the dividend and instead come with the stock buyback initiative which we believe could have been done without SH approval. As noted prior, now they are racing on the buyback because the shares are stupid cheap and they want the flexibilty to jump on such opportunities.

  • Reply to

    from MacauBusiness

    by drjackcar Apr 26, 2014 8:37 AM
    squeezetracker squeezetracker Apr 26, 2014 11:27 AM Flag

    btw, other than Bain's work, the sellside work is generally disregarded by the buyside because it adds no value in this sector.

  • Reply to

    squeeze

    by drjackcar Apr 26, 2014 1:34 PM
    squeezetracker squeezetracker Apr 26, 2014 6:41 PM Flag

    Fun to think about, huh. Since I know more than a handful of pm read this board (well, all the putzes on ignore but the posts of a few here anyway -- LOL), let's go ahead discuss what will soon be discounted once the street figures out what is happening (some pm ahead of the sellside "analysts" understand and have been buying right along with us down here LOL).

    To answer your point directly, they have approximately 1,665,984k FD shares outstanding a/o year end, of which Packer and Ho control call it 2/3s or some 1,116,209k. To simplify, let's flip to 555m ADS equivalent shares, of which Packer and Ho each control 1/3 or roughly 372m shares in total.

    That means there is only 183m FD shares in public hands (less than that in float if one excludes the insider incentive shares). So taking out the 10% or 55.5m shares will ("when" as in quickly done and decidedly not "if") reduce "FD float" from that 183 by another 55m+ = 128m shares remaining. N.B. I'm ignoring the temporary ceiling on float floor of 25% of total shares for this purpose.

    Here's a few subtleties fun to think through.

    1. Although not holding us out as Chinese securities law experts, they likely do not need shareholder approval, and even if only Crown Resorts and Melco vote for the proposal, that would be 67% of ownership voted in favor of the provision when likely they need no more than a simple majority of the quorum (shares voting) to pass all of the proposals. We think call it 100% of shares voted will be in favor of the proposal.

    2. Under governing regulations, they need to have at least 25% of the shares out there as publicly held float. Since 67% is controlled by Packer- and Ho-related parties/entities, that means on current o/s shares they can only take out call it 8% of o/s shares as of 12/31/14 share count, but shares issued upon incentive share exercise (e.g., options, restricted stock) , but over the next two years let's call that 10% available.

    cont.

  • Reply to

    squeeze

    by drjackcar Apr 26, 2014 1:34 PM
    squeezetracker squeezetracker Apr 26, 2014 7:00 PM Flag

    2. cont.
    While the company wants flexibility to repurchase shares when they are available on the cheap, the clearer optics are that Packer needed/wanted the initial dividend money right now for non-MPEL projects, but over time they want to control a bigger piece of the pie now that they see how successful MPEL is going to be. As per my post on your other thread, without any meaningful progress increasing GGR over the next two years, they have enough ebitda to take out 10% of the shares without issuing debt to do so. Stunning!

    3. D'ya think maybe MPEL control parties believe COD Manila, MSC and then Tower 5 just might add to the company's GGR, ebitda and EPS? LOL Discussed prior, but the company is delivering best in group adj ebitda ROIC in excess of 30% -- we're highly confident that Ho understands that math and has no intention of diluting returns and forward realization of shareholder value by doing projects that dimish returns on deployed capital.

    4. Our only beef with the proxy is that they say buybacks will increase net asset value. Whoever wrote that may have gone to Princeton and then Harvard b school (LOL), but share repurchases do not do THAT. They reduce capital and cash (unless incremental debt is issued). What buybacks DO INCREASE is the percentage ownership each residual share has of adj ebitda, earnings and capital.

    Here's the upshot. Ho and Packer have been enormously successful in Macau and likely will be everywhere they choose to go. Packer and Ho now want to see their own (and all other shareholders) control another 10% of the company which is what the buybacks will do. It will also mean significantly higher EPS and capacity to pay more special and common dividends per share, and we believe they will want to get ALL of the first buyback done LONG BEFORE Manila, MSC and Tower 5 hit their stride.

    The stock should be WAY higher now, and soon will be. Toodles to the funds selling out down here! And LOL at the unhedged shorts on this.

  • Reply to

    Easter visitation

    by drjackcar Apr 26, 2014 10:16 AM
    squeezetracker squeezetracker Apr 26, 2014 7:19 PM Flag

    Excellent update for Macau... even though much of that traffic was likely day visitation by non players and it was also likely hard to find a slot let alone table without a line to play, it explains why GGR picked up last week according to "channel checks."

    That is all consistent with LVS' confident update on macau prospects Thursday.

  • Reply to

    CAT sales up 30% in China

    by squeezetracker Apr 24, 2014 8:10 AM
    squeezetracker squeezetracker Apr 26, 2014 7:44 PM Flag

    Schultz, ceo of sbux, called China their biggest growth market for the foreseeable future... and that is against 900 new store openings in the U.S. this year and half that in ROW excl China.

  • Might the hedge funds getting hammered and pressed short bets continue a bit longer? Sure; the Fast Money show options jokers all agree (a contraindicator on its own) that the crazy valuations stocks (AMZN, NFLX,FB) may have a more downside to come but that pressing those, already down hard, is dangerous and they "wouldn't short them down here" except with [long] put spreads. (smartest thing ever heard on that show). They also think playing put spreads down on MGM and WYNN is a good trade because "consumer discretionary" will be hurt as the economy slows. Yet they really should play darts -- because otions trading is directional and generally catalyst trades, not so much about global and domestic GDP trends. No wonder those guys are generally wrongside.

    Now add China's banks to the list of companies and signs the economy is doing well in China, the key driver for creating the Asian wealth driving Macau's GGR, and confirming that financing is not dead.

    "China Construction Bank Says First-Quarter Profit Increases 10%
    By Bloomberg News Apr 27, 2014 5:16 AM ET

    China Construction Bank Corp. (939), the nation’s second-largest lender by market value, reported 10 percent growth in first-quarter profit.

    Net income increased to 65.8 billion yuan ($10.5 billion) for the three months through March from 59.6 billion yuan a year earlier, the Beijing-based lender said in a filing to Shanghai’s stock exchange today.

    The profit growth may check investors’ concerns that banks will be hobbled by rising defaults amid a slowdown in an economy that had its first onshore bond default earlier this year. The central bank on April 25 cut the ratio of deposits some rural banks must hold in reserve.

    China Construction Bank was the third of China’s four largest lenders to report earnings in the past week. First-quarter profit grew 14 percent at both Ag Bank of China and Bank of China I & C Bank of China Ltd. (1398), the biggest of the four, is due to post results on April 2."

  • Reply to

    China's Banks Growing Again (Bloomberg)

    by squeezetracker Apr 27, 2014 7:01 AM
    squeezetracker squeezetracker Apr 28, 2014 7:56 AM Flag

    Thanks for the post.

    Seems that in addition to our pm pals, the IBD staff writers may also be reading along here (LOL)...

    The article frames the point that China is stable and chugging along nicely at 7.5% GDP policy target as noted on the CAT thread. This article even uses many of the same companies on that thread last week: AAPL, CHL, CAT, YUM, and LVS -- and if he had included SBUX, Ford, and GM, he would have captured all of the companies I referenced. LOL

  • Reply to

    fuggin board, trying to post market share

    by drjackcar Apr 28, 2014 10:36 AM
    squeezetracker squeezetracker Apr 28, 2014 11:17 AM Flag

    foggy,
    The gaming management and ownership stakes in the projects you mentioned do NOT involve Melco Crown Entertainment (MPEL). To the extent anyone is selling out MPEL at these levels based on the assumption that those are MPEL's projects and creating a higher risk profile than MPEL has projected prior, that is an errant assumption.

    Again, we believe the smart money is on the buyside of the broad market and entertainment sector dislocation seen in current valuations. Bain's data above reflects that MPEL, which gained relative share of Macau table game GGR in March, has now made further progress gaining share in April.

    Further, using actual and MTD aggregate GGR data for April (as Macau gears up for the May 1 Golden Holiday with 3 days to go in April), Macau's YTD GGR is call it 17% YOY -- THAT number is ahead of the 10-15% range of published estimates for 2014, especially considering the impace of the Dec Q drove the 19%+ result last year.

  • Reply to

    fuggin board, trying to post market share

    by drjackcar Apr 28, 2014 10:36 AM
    squeezetracker squeezetracker Apr 28, 2014 11:22 AM Flag

    btw, it also appears, based on unverified input from forbes,that here one of Ho's other ventures is going to be involved with only the gaming concessions, not building an empire as LVS was planning before abandoning the spanish empire idea (you may recall that back then we thought Spain resort building was a lame dream for LVS, too).

  • squeezetracker squeezetracker Apr 28, 2014 2:19 PM Flag

    There has been a lot of noise on VIP play in macau in recent weeks, incl the two referenced in article this morning. LVS also telegraphed two weeks ago that more news was soon coming about fraud witch hunts where the chinese govt is apparently seeking info from junkets (and likely casinos) about "corrupt" govt officials.

    To our knowledge, there are no fraud or any other losses for any of the casinos resulting from the Neptune theft, but the barron's piece is likely correct on one thing, that sentiment is already awful on the group and more noise will not be helpful.

    Someone ought to tell her and the CS "analyst" team that this is the third year in a row that everyone was wetting their pants, pre-summer months, over VIP business being hurt if fraudulent bad guys were removed from the field. Those paying attention know the better operators are pretty careful on credit extension already, and a further revisit is not going to be devastating for the real players and tours, as it has not in the past.

    Meanwhile, MPEL and LVS continue to emphasize premium mass and mass visitation and GGR over VIP anyway, and such segments are far more profitable for the house on holds, and property utilization. As I wrote a couple weeks ago, too, Steve Wynn has been at this game a while and WYNN is likely Snow White on background checks and being careful as they (and MPEL and LVS) have too much to lose by getting caught up in laundering.

    The good news is that today's panic washout may well have finally put in the bottom. Now, if only the companies would issue a PR to clarify they have no losses or concerns regarding the bs noise on corruption or fraud losses for their house, then maybe the sector can return to better valuation of the extraordinary ebitda growth happening in Macau, esp for MPEL in percentage terms.

  • Reply to

    haven't been down here since 09/13

    by drjackcar Apr 28, 2014 1:51 PM
    squeezetracker squeezetracker Apr 28, 2014 2:27 PM Flag

    about a month ago you asked if I thought the sharp selloff one day was it...

    Barring napalm runs in East Ukraine, today's drunken sailor selloff was bad enough (taking out the recent low while the entire sector crumbled) that the bottom may well now be in...

    Not to say it can;t go lower, but, no, MPEL does not have a $1.2B hit coming on the theft of funds from Neptune... and it is almost comedy to think that a junket or two may do a little less play at Altria (LOL)

    Those who don't know why that is so should study how Altria (in total!) fit into the overall GGR and table allocation picture for MPEL over the last Q or two. Hint: COD is the premium mass venue of choice, and COD is driving the biggest -- by far -- chunk of GGR these days.

  • squeezetracker by squeezetracker Apr 28, 2014 3:01 PM Flag

    Ayre's compiled a list of known VIP room relationships for Neptune late last Fall. Someone send CS "analyst" and the Barron's "journalist" a note that, funny to see, MPEL is the only house NOT on the list.

    NEPTUNE GROUP JUNKET PROFITS RISE 26%
    OCTOBER 5, 2013
    Macau junket operator Neptune Group recently handed in its financial report for the fiscal year ending June 30, and investors in the Hong Kong-listed firm have reason to cheer, Profits rose 26% to HKD 564.5m (US $72.8m), outpacing the 11% growth experienced by Macau’s VIP gambling market in the most recent quarterly figures. Earnings per share came to HK 6.95¢, down 5.5% from fiscal 2012, although this is attributable to dilution following an 8% increase in the ordinary shares issued during the year.

    Neptune’s trade receivables – aka unpaid VIP gambling debts – totaled HKD 418m ($53.9m) for the year, up 30% from HKD 321m in fiscal 2012. Some 69% of FY 2013’s receivables have been on Neptune’s books for over 90 days, but the company insists that it didn’t record any impairment loss on these receivables. Neptune has profit sharing deals with five Macau junket firms covering 61 VIP gaming tables at the Venetian Macao, Sands Macao, Galaxy StarWorld and SJM’s Grand Lisboa. Late last month, Neptune let it slip that it had signed a memorandum of understanding for possible investment in a junket operating out of the Galaxy Guangdong VIP Club at the Galaxy Macau.

  • Reply to

    Neptune's VIP Room list

    by squeezetracker Apr 28, 2014 3:01 PM
    squeezetracker squeezetracker Apr 28, 2014 3:47 PM Flag

    foggy, you are welcome...

    I usually ignore motley putz, seeking dufuses and "the street" articles as a waste of time, but have a look at "the street's" pos article today. Those who know little about Macau, MPEL's operations and the Ho family's history/pride (so likely most momo guys, many retail investors and lots of traders playing short the sector these recent days, and all the pakitrading club tarts), might read that and actually think MPEL is operated by crooks in cahoots with criminal fraudsters and money launderers... what joke these f heads and the CS/barron's tools made it seem like MPEL was somehow in trouble and might have big losses to come from fraud; a shame innocent unawares might have traded out of their MPEL shares today out of fear.

    It was a great chance to add... relative to MPEL's huge progress on premium mass, mass and footprint, the stock is cheaper today than it was at $12 in November 2012, or $20 in early July 2013 when all the talking heads and other morons where saying China was in deep economic trouble and VIP was a major problem for all of the companies in Macau.

  • Reply to

    Neptune's VIP Room list

    by squeezetracker Apr 28, 2014 3:01 PM
    squeezetracker squeezetracker Apr 28, 2014 5:59 PM Flag

    First, FY moron. Second, the aritcles I am making fun of were NOT news, they were weak sauce pseudo journalism, but you are too stupid to even understand that. LOL

    did I mention you should go F yourself? Yeah, FY putz breath, you and the camel you rode in on.

  • Reply to

    Money Down a Rat Hole

    by mrmuckle2012 Apr 28, 2014 3:10 PM
    squeezetracker squeezetracker Apr 29, 2014 7:53 AM Flag

    LOL at putz beath muchkle f head.... he can't even keep his multiple aliases straight! Here's more of his "rat hole" bs on his "mothermotherisnuts" alias,posted within minutes of his other alias postings. LOL And how about his complete putz alias foreverbennyputz trying to dis me for pointing out the stupidity of articles based on pseudo analysis and bias fed to clueless journalists and bloggers by pm short the stock while he cuts and pastes away, adding nothing at any post, trying to scare the nraindead into selling out at the bottom. So we can thank him, on at least four different aliases here, for calling the bottom on this. Back they all go to veiled ignore land. ROFL

    0users liked this postsusers disliked this posts1Reply
    Money Down a Rat Hole
    by mrmuckle2012 • 16 hours ago Flag
    I ain't buying this falling knife stock

    talk about idiotic... hard to believe anyone would pay this "can't speak english" gumptard even $2/day to post such inanity.

  • Reply to

    MGM kills it

    by drjackcar Apr 29, 2014 8:45 AM
    squeezetracker squeezetracker Apr 29, 2014 9:25 AM Flag

    for MGM longs, glad MGM did better than LVS in Vegas... MCE business looks solid with all but one strip property showing full rooms and ADRs up a bit. Bellagio continues to be huge for MGM -- no surprise.

    For MPEL longs, MGM's Macau update is "more good news." Fun headline: "MGM leaps on Macau Strength" given MGM's single property there drives lowest share of the group and generated ~1/3 of their aggregate revenues and adj EBITDA (and what, ~2.5x Bellagio).

  • squeezetracker by squeezetracker Apr 29, 2014 11:03 AM Flag

    LOL. This was the title of the board moron's thread he deleted when called out on his multiple aliases he's too stupid to keep straight.

    mrmuckle aka mymotherisnuts aka foreverbenny aka putzbreath... Everyone should thank him for his calls for $28 and calling me an idiot and pest writing worthless posts. LOL He's a brilliant marker of the bottom put in yesterday.

    And about those "falling knives"... catching falling knives, and picking up the ones on the ground that did not break after the drop is over is typically a beautiful way to own quality knives cheaper than one should have been able to acquire them. ROFL

    Money Down a Rat Hole
    mrmuckle2012 • 19 hours ago
    0users liked this postsusers disliked this posts1Reply
    Money Down a Rat Hole

    This topic is deleted.
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    squeezetracker • 3 hours ago Remove 0users liked this postsusers disliked this posts0Reply
    LOL at putz beath muchkle f head.... he can't even keep his multiple aliases straight! Here's more of his "rat hole" bs on his "mothermotherisnuts" alias,posted within minutes of his other alias postings. LOL And how about his complete putz alias foreverbennyputz trying to dis me for pointing out the stupidity of articles based on pseudo analysis and bias fed to clueless journalists and bloggers by pm short the stock while he cuts and pastes away, adding nothing at any post, trying to scare the nraindead into selling out at the bottom. So we can thank him, on at least four different aliases here, for calling the bottom on this. Back they all go to veiled ignore land. ROFL

    0users liked this postsusers disliked this posts1Reply
    Money Down a Rat Hole
    by mrmuckle2012 • 16 hours ago Flag
    I ain't buying this falling knife stock

    talk about idiotic... hard to believe anyone would pay this "can't speak english" gumptard even $2/day to post such inanity. Less

  • Reply to

    "Money Down a Rat Hole"

    by squeezetracker Apr 29, 2014 11:03 AM
    squeezetracker squeezetracker Apr 29, 2014 11:25 AM Flag

    That pos is likely being paid to #$%$ on MPEL by a bush league hedge fund. As for venting, he's feebly tried to dis me at least 20 times. While I have all of his dog S aliases on ignore, occasionally i see him reply to something I wrote and when I have time and inclination, I s in his hat and box his ears with it because he deserves that. And LOL that putz calling me an idiot. Too funny.

    As for trying to trade high beta stocks and higher risk options, especially near term dated as many here do from their comments, that is a great way to find yourself in margin trouble in a hurry. Owning anything on margin in the current chop, especially a speculative allocation, is at best risky and actually really poor thinking... especially if one is retired as some have said they are. This is NOT a sit back and collect coupons stock...

    That said, it is once again now our largest allocation. We expect the share repurchase program to help the stock near term, but mgmt and the footprint are the reason the stock will outperform the group over time. If you read and understood my posts on the coming buyback plan, from a long term perspective, it would be great if they were taking out shares down here vs above $40 (where the stock will soon be we believe).

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