Re bailing on the trade sleeve, as in golf, sometimes lucky is better than good. LOL
but forget that... the rest of your comments are clear thinking... and note that our far bigger core long here is at $950 which we did NOT sell that out at $1260 for two reasons. First and foremost, we expect the shares to be materially higher by EOY.
Second, as with most hedge fund incentives, tax efficiency matters to us and we don't want to trigger the gain on one of our best ideas and biggest positions this year.
All else equal, PCLN is one of the best big cap growth stories going and it is trading at a significant discount relative to foreseeable growth. This OPEN deal may work out well over time, but relative to ebitda, ROIC and overall growth, it doesn't really matter if it only works out marginally.
Our baseline PT modeling comfortably supports $1400+ by EOY, and if you have been around since even just $595 in December 2012, you know we are decent stockpickers. LOL
idbtc dip S,
"Saying it the way I'm seeing it" is a riot...
Your comments reflect ignorance and stupidity, and you calling me dumb is also a riot. You have no idea how much I know about valuation, deal making and tax free reorg... but I was not trying to explain any of that -- simply point out what pm would have preferred if they are long OPEN. Those long PCLN got the cash deal they would have preferred as is obvious. I'll also pass on discussing incentive payouts for hedge fund pm... but taxes figure large in after tax efficiency. LOL
As for stock vs cash, the only reason to prefer cash is if you think yesterday little trim was permanent. Those who want out for "cash" won't get more than the tender; in a stock deal, they would have been able to hedge out the downside, sell out the OPEN stock, or let the upside run as PCLN ROARS up $100 or more by the end of July.
Remember I sold out the trade sleeve at $1260 (put on again at $1120) on Wednesday and then suggested the stock would see $1200 or even $1175 yesterday while the premarket tape painted up $8? Yeah, see, that's because I understand the capital markets, this sector and this company.
great stuff grftt... VIP may be in a brief lull (the growth curve is certainly being flattened by MPEL and others hooking up premium mass directly... but as you shared above, mass visitation is up 10%+ and that data set has a long ramp years into the future.
A while back I posted some ytd date on MCE growth this year... MCE activity is up significantly -- early days on that too, incl sporting events that will continue to take the book away from Vegas.
Mass GR is cranking over 35% growth ytd, and MPEL's positioning to dominate Manila with COD opening there later this year and to have a dramatic increase in overall Cotai footprint (Studio city, then Tower 5 at COD and then Phase 2 at Studio City) combined with GR growth in the existing footprint will enable MPEL to ramp hard and more than double the adj ebitda run rate by EOY 2016. EPS growth for MPEL is also poised to grow faster than any of the U.S. listed companies...
Before long, we'll all be having fun saying things like "Wasn't it ridiculous when all the dip S "analysts" and pseudo-journalists were recuding ratings in early summer 2014, just like they did in 2009 and then again in 2012 -- each time RIGHT BEFORE THE STOCKS TOOK OFF AGAIN as the niche is exceedingly well positioned to outperform most all other sectors." Yeah, these people are terrific contra-indications when they yell "the sky is falling"... it happens over and over again, right at the bottom.
This was an important week for longs... all of the bs noise being yelled by weak analysts and the media as the momo shorts used them like puppets took an abrupt about face... no surprises or new info for those reading the quality posters here, except that 2 of the five analysts publishing nonsense up through last week were on the "oversold" horn this week. Too funny...
Good to see the successful retest of the double bottom now too... our suggestion on May 15th that the bottom was likely in at $31.09 proved a bit early given the last week of May mystery, but between Tianamen Square (Chinamen stayed home with their families vs touring anywhere) and then we had all the coincident one-offs and 13 noise items... but seemingly now the bs is done for this cycle. Have you noticed most of the bs multialias idiots have left already? LOL
Our PT remains $50 for this year (i.e., no later than the Dec Q CC)... and we've now "highly likely" seen even the closest we'll see to the left tail of $28 we said about a month ago was possible if the sky falls on china's economy or Putin rolled tanks into the Ukrain and opther former USSR territories. What about our right tail of $60+ between now and when they announce the january Q in early Feb or so? We'll see... but anyone unhedged short here now is asking to have their capital mohawked. The box hedging is done, and seemingly so too is the downside here...
p.s. The $.128/SH dividend was credited to our MS account this morning.
The stock took a nice hit, especially from the $1260 level yesterday, but dropping $1.9B of market cap today is even dumber than dirt, so we were thrilled to put half our trade sleeve back on after bailing that yesterday as noted prior.
Here's the simple math...
Maybe they paid a bit much for a business plan that is easy to compete against, but, yawn... PCLN will certainly make the most of it with their interconnectivity of travel and database mgmt. Will the $2.6B prove worthwhile in the end? Maybe... but the drop in market cap is as if they issued stock for the deal (i.e., 4% dilution), and then threw away another $1B of cash out of stupidity... they did not do either of those things. Why not? OPEN shareholders certainly would have preferred stock and a tax-free reorg. The answer is simple: they are telegraphing they think the sotck (currency) is TOO cheap to use in a stock deal, and they didn;t want to have to use monstor ebitda to immiediately rebuy the shares they would have been issuing in an equity deal.
Now the stock has taken out the gap at $1197 as I suggested was certainly possible, the shares are ready to begin the runup into June Q earnings which should be stellar and reignite the shares. Anyone who did not cover today should prepare to get stomped.
Hardly a perfect match or even a smart deal, but it doesn't matter to the power of the PCLN ebitda story. As the stock went up on tape painting premarket, we called for a drop to $1200 or even $1175 whence this elOver cheerleader with his pom pom called me clueless. Funny stuff to be sure. LOL
Grabbed a 5k at 1190 on the turn up... looks like our firiends are not going to let it drop to $1175. Time for even the dumb shorts to cover now.
glad they used cash vs dilution of stock deal...
We added back half the trade sleeve blended at 1204.70, pleased with the institutional support as it were. We'll put the other half back on if it retests (or busts thru) $1200 again. Fun $55/share pickup in 24 hours. We should always be so "lucky."
Staying right on the core here; EXPE is even better as they get their growth curve ginned up again.
And what a gift Luftansa noise gave us to reload AAL and DAL.
Actually shorts are crazy lucky PCLN did this deal at these levels!
You love the news? Ya, we see you yell that on several clueless posts already today... That's because you are clueless. LOL
$2.6B is more than 4% of the company....
What else should they do with the cash and capacity to issue debt at historic low levels? Expand and accelerate the buyback program! That they are willing to pay up big time for OPEN tells us something about core growth though. In a word? YUCK.
As for buying TRIP, GFL on that... but TRIP would love PCLN top pay up around $200/share (similar ebitda metrics for that vs what they are paying for OPEN)...
There is a long line of companies that hopes PCLN and others will pay up big time for hardly defensible "niche" internet companies... groupon, yelp and a dozen others...
You calling me clueless? Really funny gomer. LOL
Your comments are those of an idiot standing around with pompoms. You might want to go back a bit in time to read our long term fundamental bullishness here... just start with December 2012 at $595/share.
As for this OPEN deal? The worst thing we've seen PCLN do since following owning it for the first time at $85 in 2009.
Here we are, owning the core at $950 (round 10 or so), having blown out the trade sleeve at $1260 yesterday, and thinking the stock is likely to retest $1200 before moving up into earnings, and they announce this POS deal... growth must be slowing faster than we thought for them to do this deal. Yuck...
Love this part:
"I think many will be surprised by how fast this sector is likely to turn up -- big slugs of the box shorting began coming off this week, hand in hand with pm adding shares as the last of the momos/daytrading shorts find themselves 300' below surface without submersible gear needed to stay down there. deja vu, hundreds of times over the last couple decades."
Have you guys seen the Annie hall movie where Woody Allen says to Diane Keaton about the loud-mouthed moron standing behind them in line for a movie "what I wouldn't give for a sock full of horse manure" loud enough that the moron can hear him? Classic... I hope the morons, including the reporters at Barrons, WSJ, Forbes and IBD and the "research analysts" publishing nonsense about UnionPay, China sky falling, shadow banking, and the other 13 reasons Macau gaming was in deep horse S as well as all the dolts posting clueless horse S here over recent weeks are all enjoying chortling on their packed socks today... there are many more socks full coming back to them over the next several days, weeks and quarters as MPEL's fundamental and quantitative story unfolds, a nice payback as the reversal gathers some steam.
hilarious to see the Citi analyst now parrot grftt's comments on WCup game time airings.
As I mentioned, several pals began pulling down the box and other hedges on Monday and yesterday... and now today a few more threw some gas on the fire.
The technically oriented players will note the low of $31.09 from May 15 now goes down as successfully retested... but for the wary or at least weary, that is not to say that stupid can not be revisited. Still, when some of the weakest-minded of the analyst group become, as Obiwankanobi coined, "not the droids [the shorts] we're looking for" and figure out that it is difficult to breathe 300' underwater without deep water submersible gear, well then... what i called the turn and "rip higher coming over the next few days" should be upon us soon if not already. In what is becoming a favorite refrain of mine over the years, quality fundamental and quantitative analysis and valuation work tend to overcome bs and errant analysis before too many moons pass.
fair enough... room for all kinds of drinks at the cocktail party.
And now, almost time to think about going back onto a bit of DAL and AAL as the talking heads talk those down. Would love to go large both again if the momo exodus from those will drive a 10% or more haircut.
And what's with the Macau names and even little old BYD this morning? LOL
Great post jack... this is what will matter over the next few weeks!
Oriinally the TianamenSquare piece as a tossaway comment, but grftt's comments are the tell.
As for all the one offs, incl TS, no professional managing money that I know would sell shares based on the totality of all the noise, let alone any one part. I can say with great confidence that several pm long a bunch here, and adding hard during 1Q as it eased back to the 50d ema, have boxed out a significant portion of there gross long. That is not because of the impact of any of these temporary and unimportant noise elements, instead, it has been in recognition that the momo crowd is shorting the sector without any real knowledge of it or the individual companies, and the highly visible and now increasingly plain to see utilization of weak analysts and really lame media points to orchestrate the takedown.
As for VIP growth fading? It may be that only about 14 people apart for mgmt teams there understand it, but the ramp in premium mass is a big piece of that as gaming directors and players hook up with direct credit arrangements and private jets/helicopters/penthouse suites/comps/lobster and caviar/cigars/Bordeaux, Burgundy, champagne and cognac and other "party favors" -- all just the way the guest and his entourage like things... the cemented "stay and play" clientele as it were.
As for 2Q results, for MPEL they should be outstanding... and they will matter as the premise for 2H outlook rom the exec teams. Some of the companies more reliant on VIP may not fare so well, but even they are likely benefiting as others de-emphasize tours and they are all making some progress on mass and premium mass as well.
I think many will be surprised by how fast this sector is likely to turn up -- big slugs of the box shorting began coming off this week, hand in hand with pm adding shares as the last of the momos/daytrading shorts find themselves 300' below surface without submersible gear needed to stay down there. deja vu, hundreds of times over the last couple decades.