Bloomberg Brief reported earlier today that Whitney Tilson is short Organovo Holdings Inc (NYSE:ONVO). Shares of the stock jumped  sank on the news, but were up 2.23% for the day. A reader sent us a copy of what is likely his presentation on the stock.

The one question we have is Tilson short Twitter Inc (NYSE:TWTR)? You decide.

Below is some excerpts followed by the entire document.

Also see some other recent Tilson shorts, which he discusses below as well here- Whitney Tilson Shorts Montage Technology, NQ Mobile

Whitney Tilson April 2nd – ‘Shorting’

Stocks I’m Patiently Waiting On

  • Examples of stocks in which I have a very small short position and am waiting for them to crack: Organovo and YY Inc (NASDAQ:YY)
  • There’s always room for obvious bubbles

 

  • But size them small!

 

  • Examples: 3D Systems (13.8x sales), Stratasys (11.8x), ExOne (15.0x), voxeljet

 

(26.5x), and Organovo Holdings Inc (NYSE:ONVO) (see previous slide) (16,391x)

 

 

Look for Companies That Have Stumbled, But the Stock Is Still Expensive

  • Instead, look for companies that have stumbled in the “beat n’ raise game”

 

  • The first stumble is usually the company only matching estimates (or beating via artificial means such as a lower tax rate) and failing to raise guidance

 

  • Often the stock won’t decline on this

 

  • The next step is to miss and lower; sometimes the stock doesn’t even fall on this!

 

  • Examples: Twitter and Krispy Kreme today; Conn’s has worked; Green Mtn hasn’t

Look for Obvious Bubbles (3) Example: Certain Chinese Companies

  • There’s always room for obvious bubbles

 

  • But size them small!

 

  • Examples: NQ Mobile (6.9x sales), YY (16.1x), and Montage Technology Group (4.9x)

Look for Obvious Bubbles, Frauds and/or Promotions

 

  • There’s always room for obvious bubbles, frauds and/or promotions

 

  • But size them small!

 

  • Examples: Herbalife (1.4x sales), Textura (16.7x), InterOil (2.2x), Opko Health (39.5x)
  • …..\

What Short Sellers Are Saying Right Now

  • “Being bearish in the bull market has been, thus far, a mug’s game and a hedge against profits.” – Doug Kass

 

  • “We’ve also taken our lumps this year on the short side (and since March 9, 2009) so we know how you feel. For what it’s worth, we agree that this is the best environment to find shorts and we are seeing some incredible opportunities. We haven’t seen a variance like this between our longs and shorts since early 2008. So, while I feel like I’m covered in battle wounds and have blood dripping out of my eye balls at the end of each day, I am confident we will be rewarded for staying the course.”

 

– A friend

 

    • “I don’t have the antidote to your pain. We’ve been bludgeoned by this melt-up as well. It’s unbelievably unpleasant. I’ve never seen such widespread capitulation among seasoned short sellers. Many are out of business. This stretch is worse than the internet bubble for me. It’s constant pain across my entire short book, whereas the internet was isolated to one industry – and then you got relief when the bubble burst.” – Another friend

Full presentation from Tilson below

Shorting Whitney Tilson ValueWalk