Visa Options; a New Favorite; 'Green Eggs and Ham': Best of Kass

Doug Kass
September 29, 2013

NEW YORK ( TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.

Among the posts this past week were entries about Visa's call options, Northwest Bancshares and a Dr. Seuss classic.

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Monitise Update: Visa Weighs Its Options
Originally published on Friday, Sept. 27 at 10:24 a.m. EDT.

Visa owns two separate options on Monitise :

Six million shares that don't have a date attached; and 43 million shares that are exercisable until August 2014.

The six-million-share bucket was exercised yesterday (see below description). From my perch, it is a good sign that Visa exercised this bucket early.

It is hard to believe that the second tranche of call options (43 million shares) won't be exercised in due course. (I don't know why Visa would feel a need to exercise early.)

Here are the descriptions of the two options tranches:

  • Sept. 27, 2013 -- 6 million options

    Application has been made for 6,000,000 new ordinary shares of 1p each in the Company ("Ordinary Shares") to be admitted to trading on AIM ("Admission") pursuant to the exercise of warrants granted to Visa Europe, as previously announced on March 6, 2013. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares in the Company and it is expected that dealings in these new Ordinary Shares will commence on October 1, 2013.

  • March 6, 2013 -- 43 million options

    At the same time as the Agreement for this extended commercial partnership is entered into, Monitise will grant Visa Europe a warrant to purchase 43m ordinary shares of 1 pence each in the Company ("Ordinary Shares") at a price of 36.25p per Ordinary Share, representing the closing mid-market price of March 4, 2013.

    This warrant will be exercisable from the point at which the Agreement is entered into between Monitise and Visa Europe until August 4, 2014. In addition, the Company will grant Visa Europe a further warrant to purchase an additional 6 million Ordinary Shares at a price of 1 pence per Ordinary Share, being the nominal value.

    At the time of original publication, Kass was long MONI.L.


    New Favorite Long: Northwest Bancshares
    Originally published on Thursday, Sept. 26 at 11:48 a.m. EDT.

    At $12.95, Northwest Bancshares now becomes my favorite long.

    The reason is solely based on my assessment of reward vs. risk ($0.50 down and $3-$4 up).

    Is this the next Altisource Portfolio Solutions or Altisource Asset Management ? Obviously not.

    But the company is way overcapitalized, and we, as shareholders, are protected by an active share buyback program.

    In the meantime, we get a reasonable yield as we wait.

    Northwest Bancshares is right in the middle of shale country in Pennsylvania, and the current P/E does not take this into account (which is a positive intermediate-term consideration).

    Finally, the bank is an excellent (and inexpensive) takeover target for a larger bank interested in entering rural the Pennsylvania market.

    The negative is the flattening yield curve, but this is an investment not a trade.

    And the yield curve is expected to get steeper over time.

    At the time of original publication, Kass was long NWBI.


    Green Stocks and Flimflam
    Originally published on Thursday, Sept. 26 at 7:44 a.m. EDT.

    I often quote Dr. Seuss -- in fact, it has become a yearly ritual for me to pay homage to TheStreet's Jim"El Capitan" Cramer during the December holiday period with the publication of "Jim Cramer's Pool."

    This week Senator Ted Cruz (R-Texas) took the Senate floor stage and began to speak out against Obamacare at 2:40 p.m. on Wednesday. Nearly six hours later, the senator announced that it was his daughter's bedtime and picked up a copy of Green Eggs and Ham and recited one of Dr. Seuss' most famous poems in front of the few senators that remained in the chamber. (It was technically a speech not a filibuster.) Cruz's crusade was reminiscent of Senator Al D'Amato's (R-N.Y.) famous filibuster in 1992, when he broke into song ("Old MacDonald Had a Farm") and read the phonebook.

    Written in August 1960, Green Eggs and Ham is the fourth-best-selling English language children's book of all time.

    A character known as Sam-I-Am -- in my parody, I use Jim-I-Am as a reference to Jim "El Capitan" Cramer, who daily pesters me to buy stocks! -- frequently bothers an unnamed character (who also serves as the narrator in the book) to taste a dish of green eggs and ham, which the unnamed character refuses by responding throughout the story, "I do not like green eggs and ham. I do not like them, Sam-I-Am." Similar to Jim Cramer (I-Am), the persistent Sam-I-Am continues to follow him and encourage him to sample the dish, asking if he would sample the dish in numerous locations (house, box, car, tree, train, dark, rain, boat) and with a variety of animals (mouse, fox, goat). Finally, the unnamed character accepts Sam-I-Am's offer and samples the green eggs and ham, which he finds he does indeed like (but in my parody I still don't like them!).

    The vocabulary of the text consists of just 50 different words and was the result of a bet between Dr. Seuss and Bennett Cerf (Dr. Seuss' publisher) that Seuss (after completing The Cat in the Hat using 225 words) could not complete an entire book using so few words.

    The 50 words are a, am, and, anywhere, are, be, boat, box, car, could, dark, do, eat, eggs, fox, goat, good, green, ham, here, house, I, if, in, let, like, may, me, mouse, not, on, or, rain, Sam, say, see, so, thank, that, the, them, there, they, train, tree, try, will, with, would, you. The most frequently used word is I (85 occurrences, including as part of Sam-I-am); the word most frequently used independently is not (84 occurrences). The least frequently used word is if (occurs once).

    In Monday's opening missive, I expressed some serious reservations about the outlook for the U.S. stock market and why the reward vs. risk is poor. This morning, I relay a more humorous assessment of the markets with the following parody.

    So with apologies to Dr. Seuss, below is my stock market rendition of Green Eggs and Ham:

    Do you like green stocks, no it's flimflam!
    I do not like them, Jim-I-am.
    I do not like green stocks, cause at these levels they might be flimflam!

    Would you like them here or there?
    I would not like them here or there.
    I would not like them anywhere.
    I do not like green stocks, cause at these levels they might be flimflam!
    I do not like them, Jim-I-am.

    Would you like them with a SPY ?
    Would you like them with a QQQ pie?
    I do not like them with a SPY.
    I do not like them with a QQQ pie.
    I do not like SPY or QQQ here or there.
    I do not like them anywhere.
    I do not like green stocks, cause at these levels they might be flimflam!
    I do not like them, Jim-I-am.

    Would you buy many more stocks?
    Would you buy them even in discounted blocks?
    Not in discounted blocks. Not even while drinking whiskey on the rocks.
    No, no more stocks. Not even in discounted blocks.
    I would not like them here or there.
    I would not like them anywhere.
    I do not like green stocks, it's flimflam.
    I do not like them, Jim-I-am.

    Would you? Should you use the money from your jar?
    Sell them! Sell them! Here they are!
    I would not, could not, use the money from my jar.
    You may like them. You will see.
    You may like them, Kimosabe.
    I would not; you'd have to break my knee.
    Not by using money from my jar! You let me be!
    I do not like many stocks.
    I do not like them even on discounted blocks.
    I do not like them in a SPY.
    I do not like them with a QQQ pie.
    I do not like them here or there.
    I do not like them anywhere.
    I do not like green stocks, cause at these levels they might be flimflam.
    I do not like them, Jim-I-am.

    So vain! So vain! Vain! Vain!
    Could you, would you, complain?
    Not even when drinking champagne! Gee!
    Not with money in my jar, Jim! Let me be!
    I would not, could not, buy more stock.
    I would not, could not, even in a discounted block.
    I would not, could not, use the money from my jar.
    I will not even buy them for my spouse.
    I will not buy them here or there.
    I will not buy them anywhere.
    I do not like green stocks cause at these levels they might be flimflam.
    I do not like them, Jim-I-am.

    At the time of original publication, Kass was short SPY and QQQ.

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