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Cray Inc. Message Board

zippybalto 145 posts  |  Last Activity: Apr 28, 2016 2:42 PM Member since: Oct 14, 2011
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  • Reply to

    True Believers

    by zippybalto Apr 28, 2016 10:37 AM
    zippybalto zippybalto Apr 28, 2016 2:42 PM Flag

    Why didn't I cover at $22? Because nothing about the story had changed except they'd burned through another six months of cash and were saying that even if certain things went well in 2016, they expected to to burn cash all year. Covering would have been like punishing myself for being right. This is the rare stock that could truly go to $0. And yes, the stock then went up into the low 40s but again, nothing had really changed, except for some conveniently timed press releases hinting at big things, which of course haven't materialized.
    If I thought DMRC had the goods, I'd close my short right away. But I wouldn't go long until I saw actual, sustained, operating cash flow. After all, what if your fantasy came true and DMRC earned $0.10 in 2017? Then you'd have a barely profitable stock trading at a forward P:E of 300. Hmmm....can you say, "valuation compression?" But wait, what if Wal-Mart gets on board? Answer: Wal-Mart suppliers don't get rich via margins; they get rich via sales volumes. But DMRC doesn't license its tech that way; it licenses it on a per SKU basis to product vendors. And since those vendors sell most of their product through high-volume retailers like WMT and TGT and AMZN, those vendors aren't going to have much, if any, margin to share with some tech vendor they're being forced to deal with.
    C'mon people...do I have to explain this again?

    ZB

  • Reply to

    True Believers

    by zippybalto Apr 28, 2016 10:37 AM
    zippybalto zippybalto Apr 28, 2016 11:51 AM Flag

    Digimarc was founded in 1995 and went public in December 1999. I first met Bruce Davis in the year 2000 when he was out marketing the company on an investor road show. He's been telling the same story in the 16 years since: mainstream adoption and great riches are just around the corner.
    You have vastly overestimated my ability to influence the stock price or convince you and your fellow True Believers to do anything. The stock will do what it wants, which in the absence of fundamentals like positive cash flow or tangible book value, is to fluctuate wildly on very little volume.
    I occasionally wander over to this message board to get a check on the sentiment surrounding the company. It cracks me up that otherwise sensible people will continuously rationalize and justify self-defeating behavior when the facts so obviously point in the other direction. Pretty much the definition of a cult.
    But my short position isn't based on some sort of special information or insight; it's based only on the fact that DMRC continues to bleed cash while trying but never succeeding at landing major (non-Governmental) customers for its tech. I bear no grudge against you, Davis or anyone else in DMRC's orbit. It's strictly business. So far it has worked out for me. Maybe you bought in much lower and it's working out for you. If so, congrats.
    But the fact that you would write, "We are True Believers and are very very patient." speaks to a certain, shall we say, naivete about investing. You're personalizing an investment decision, something pros never do. It makes you too invested in the outcome. I respectfully suggest that you find a copy of "The Money Game" by Adam Smith. You may benefit both w/r/t Digimarc and with your other investments.

    ZB

  • zippybalto by zippybalto Apr 28, 2016 10:37 AM Flag

    Just checking in to see if the same true believers are, well, believing.
    - Willingness to ignore lack of progress in landing paying customers? Check.
    - Eagerness to re-cast cash burn as being merely "light" and therefore somehow a good thing? Check.
    - Endless patience for Bruce to actually lead the company forward? Check.
    - Delusional assumptions about how the stock could be over $100/share in the near future? Check
    - Chicken-and-egg problem of retailers and CPG vendors each waiting for the other to go first and neither one doing so? Check.
    - Continued denial that Digimarc has been making the same claims and promises for 15 years? Check.

    Yup, it's business as usual for DMRC and the folks on this board. I've been short since late last June at around $40 and this continues to pay off. You guys keep up the good work here.

    ZB

  • Reply to

    Good deal for CSCD and FORM Napkin Math

    by petrofornow Feb 4, 2016 11:42 AM
    zippybalto zippybalto Feb 4, 2016 12:00 PM Flag

    More from the announcement and conference call:
    2015 Actual (FORM alone) vs. 2015 Pro-Forma (FORM + CSCD) guidance:
    Revenue $282m $486m
    Non-GAAP GMar 35% 42%
    Non-GAAP OMar 8% 12%
    Non-GAAP EPS $0.37 $0.65
    EBITDA Margin 11% 15%

    That's right: just putting the two companies together would mean FORM having $0.65 in 2015 EPS instead of the $0.37 they reported. And that's just financial synergies, never mind product and sales synergies in years 2, 3, 4, etc. Pre-Deal, FORM's 2016 EPS estimate is $0.48. That means post deal it's more likely to be around $0.80...for a $6.75 stock for a company that will dominate this space.

    It's bizarre that FORM is down, given that just completing the merger alone yields so much cost and tax synergy. Stupid algo traders reacting to the news and not even bothering to see the accretion.

    ZB

  • Reply to

    Here comes the "take-under"

    by zippybalto Jan 21, 2016 5:36 PM
    zippybalto zippybalto Jan 21, 2016 11:00 PM Flag

    So J&J or Bayer will pay $10/share just to make some convert holders happy? Fully diluted, it only represents about 15% of equity so they aren't exactly in a position to dictate terms, are they? And if we followed your logic, the public price wouldn't ever drop below $10.64 ???

    Credit Suisse thinks the NPV of all Horizant revenue 'till the end of time is $10/share. With no expense for, you know, salespeople and marketing and legal. Expenses that currently overwhelm revenues and cause the company to burn prodigious amounts of cash.

    Did you know there are a lot of generics for RLS already? And that that makes it hard for patients to get re-imbursed for the brand name? This, before they've really even rolled out the marketing.

    This 'leak' by the 'unnamed source' is just the usual Kabuki theater by the bankers to ensure that everyone knew XNPT was for sale.

    The writing is on the wall and this is the end game. Send out a term sheet to the possible suitors, beat the bushes to cover your investment banking #$%$ and hope somebody offers a cash deal the institutional shareholders can stomach.

    ZB

  • Will probably be a "take-under." Not the exit biopharma start-ups hope for. XNPT hemorrhaging cash. Nobody wants to fund another public financing round so management is cutting its losses. Credit Suisse just initiated coverage with an "underperform" yesterday. Hmmm., I wonder who tipped off the reporter that the XNPT was "exploring" a sale?

    ZB

  • Reply to

    this could be a $1,000 stock

    by byronangel Dec 10, 2015 12:00 PM
    zippybalto zippybalto Dec 10, 2015 3:52 PM Flag

    A typical Walmart superstore has 150,00 SKUs. At $50/bar code/year that's...wait for it...$7.5 million/year. DMRC does about $25 million in revenue right now. So that's only a 30% one-time bump in revenue. And since that money would be paid by the vendors, those vendors wouldn't have to pay DMRC anything beyond that to sell those same SKUs through Target or Walgreens or Amazon. And no more money to DMRC whether the bar code is used for inventory replenishment or check-out or wherever. The price is per SKU, not application.

    Oh, and the Procter and Gambles and Unilevers and Coca-Colas of the world wouldn't be paying full price...they'd be paying a lot less per SKU for enterprise licenses. So that $50/year would probably average out to $25/year. And that's only as long as the patents last, which since they've been at this for 20 years, is not much longer.

    Interesting fact: no bar code technology has ever become widely adopted while the patents were still valid. Hell, the people who invented QR Codes got a patent but didn't even charge for their use.

    C'mon: just 'cause you're in a cult doesn't mean you've lost the ability to reason! OK, yes it has but just try to think, people.

    (Oh, and yeah, I watched and listened to the presentation this morning. Nothing new under the sun, really.)

    ZB

  • zippybalto by zippybalto Dec 10, 2015 9:42 AM Flag

    Notice: did any money change hands? Yes: Digimarc no doubt paid Rockfish to include this software in their application. What does that say about the value of Digimarc's product? It says it isn't worth very much.

    Lots of discussion about "Wal-Mart" but tellingly, nobody from Wal-Mart is quoted in the news release. Just the brand name thrown around for effect.

    Those of you new to the DMRC story probably don't realize that DMRC has been doing this for 15 years: trying unsuccessfully to log-roll others (retailers, manufacturers, investors, etc.) with news releases and breathless announcements at trade shows and investor conferences...that inevitably are conveniently forgotten when no money rolls in.

    Am I short DMRC? You bet. Have I done a lot of work on this company and their technology? You bet. Could I be wrong? You bet. But DMRC failing to convert its technology into revenue, let alone positive cash flow, is about the surest bet in the stock market. Has been until now, probably will be as long as DMRC keeps finding saps to fund the next news release-worthy boondoggle.

    ZB

  • Reply to

    Censoring Again

    by flipajig42 Dec 3, 2015 12:59 PM
    zippybalto zippybalto Dec 3, 2015 3:45 PM Flag

    Google "Smart Label" "New York Times" and read the first item in the search results.

    ZB

  • zippybalto by zippybalto Dec 3, 2015 11:45 AM Flag

    Oops! Food companies are going with QR codes for Smart Label

    And the Greenies are not happy - they want actual printing on packages so non-smart phone owners can read about possible GMOs. Which means it's a choice between QRs and plain English.

    No mention of DMRC's invisible codes.

    What a shame for all of you in the Digimarc cult. Why don't you form a circle and sing a happy song to cheer yourselves up? That's the spirit!

    ZB

  • zippybalto zippybalto Nov 24, 2015 3:45 PM Flag

    Yup, I think you're right: anyone looking at KBIO right now is getting nervous: $20/share, down 50% today. But hey, at least KBIO has pricing power; DMRC doesn't. DMRC's customers are the federal government, which isn't in the habit of letting vendors charge premium prices and supermarket chains, whose profit margins are generally 1-2%. So I don't think Martin Shkreli has Bruce Davis on speed dial...

    ZB

  • Reply to

    Ready For Another Attack?

    by flipajig42 Nov 23, 2015 7:41 PM
    zippybalto zippybalto Nov 23, 2015 9:40 PM Flag

    Yup, it's business as usual for DMRC:
    Management already guiding for $4m in negative FCF for next year;
    Issuing shares in private sales instead of buying back stock;
    Their earliest core patents began expiring in 2012...but it doesn't matter because they licensed about 3/4 of their patents to IV for money that's long gone.
    Management still singing the same tune since they went public: the future is just one big contract away. And a fresh batch of suckers drawn in every year to pay for the dream (and Bruce Davis's $1.7m pay package)...

    Good luck with that!

    ZB

  • Reply to

    " ummmm boss...i think you need to get in here"

    by mrs_schit Nov 23, 2015 1:35 PM
    zippybalto zippybalto Nov 23, 2015 2:42 PM Flag

    "Knock it down?"

    Uh, Digimarc is hemorrhaging cash, analysts are lowering their loss-per-share estimates (again) and the stock trades at 9 times revenue.

    Digimarc is doing just fine knocking itself down. I think you're assigning way too much influence to the short sellers. It's going up on basically no volume, meaning nobody, even bulls, are jumping on board. When this goes up on the back of major volume, then maybe I'll be interested.

    ZB

  • zippybalto by zippybalto Aug 6, 2015 12:44 PM Flag

    HILL raises full year guidance and the mid-point of the $0.30-$0.35 range is above the $0.31 consensus.
    Oh and they're taking market share left right and center.
    $1.7 million in operating cash flow, up 6% from last year.
    $1.3 million in Free Cash Flow
    What are you going to buy if you're selling a company executing as well as HILL is? TSLA:? BOX? ETSY?
    Just simply bonkers.

    ZB

  • Lost in the headlines for TNET is that they actually generated $0.44/share in positive operating cash flow during a 'bad' quarter. Oh and Free Cash Flow was positive too.
    These guys don't have a business problem; they have an actuarial problem, one that is pretty easily fixed.
    Thanks for putting the shares on sale today!
    ZB

  • From the earnings announcement:
    "At this range, GAAP income per share from continuing operations is forecasted to be higher than our prior guidance due to the Company's strong year-to-date performance, and is now projected to be in the
    range of $0.35 to $0.38."

    And that was GAAP; Non-GAAP guidance for the full year is $0.19 higher, well above current consensus.

    Anybody selling MRCY this morning is a complete dope. Don't believe me? Read the earnings release yourself:

    http://finance.yahoo.com/news/mercury-systems-reports-third-quarter-200100224.html

    ZB

  • Thank you idiots for putting this on sale. Stocking up big time. Lots of cash flow and international expansion coming in 2015. Plus all the cost cutting they did last year makes beating #s in 2015 that much easier. Here's how good things are going. This is from the CEO on the earnings call:
    "Despite pricing cuts to Medicare, which we announced last November of approximately $6 million, we are anticipating increased Revenue, EBITDA and Free Cash Flow for 2015."

    Woo hoo!

    ZB

  • Straight from the earnings release:
    "Annual cash flow from operations to be in the range of $61 million to $66 million in 2015 [It was $54.0 million in 2014]. The Company's outlook for 2015 annual adjusted EBITDA is expected to be in the range of $75 million to $80 million. [It was $72 million in 2014]"
    Don't be confused because a bunch of analysts were too optimistic about 2015. Back here in the real world, ARC is kicking #$%$, growing revenues and generating real cash and cash flow growth for shareholders. Oh and they're paying down debt and re-financing what's left at much better terms.
    DSOs were steady in the low 50s and Free Cash Flow in Q4 alone was nearly $13 million.
    Smart money is buying this today because idiots reacted to headlines, not the real substance of the earnings and guidance.

    ZB

  • This is completely insane. Q4 earnings and Q1 guidance were both well ahead of expectations. Q4 was $0.89 versus a $0.72 estimate.

    Current Q1 EPS est is $0.73; company guided (including Arlon) to around $0.85.

    Oh well, sell away, losers. We'll see you at the finish line. Oh wait, we won't, 'cause you'll be way behind.

    ZB

  • Reply to

    This is sinking

    by fdkp5354 Nov 7, 2014 11:28 AM
    zippybalto zippybalto Nov 7, 2014 11:38 AM Flag

    I'm quoting from a major research firm after RDNT reported on Wednesday:
    "2014 rev and EBITDA guidance raised on strong performance, and we believe RDNT has the ability to top guidance if volume trajectory continues. Reiterate Buy rating and raising PT to $11.50 (from $9.50) on 7x EV/EBITDA + $1 NOL value on strong outlook."
    Given that backdrop, I can only assume that some hedge fund is selling indiscriminately today to fund redemptions because elsewhere in their portfolio they were long gold or something else equally stupid. RadNet's third quarter was OUTRAGEOUSLY good and the outlook equally so. I guess we just have to wait until the hedge fund idiot is done selling. Nice opportunity for longs to top up before the move to over $10

    ZB

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