Jacob Wolinsky

Yahoo! Inc. (NASDAQ:YHOO) board has approved the acquisition of the blogging platform and the deal has been announced on Monday. Normally analysts love mergers and scream about the magic word ‘synergies’. However, some (but of course not all) analysts are a bit skeptical about the price Yahoo! is paying for Tumblr. Despite Tumblr taking the crown as the 32nd most visited website in the world (according to Alexa.com), the firm only generated $13 million in revenue for 2012. Additionally, the firm lost money in 2012 and there are concerns about what Yahoo! will do with all that porn and how it can keep Tumblr ‘cool’. Earlier we brought you some commentary from Barclays on the purchase, below we bring you opinions from five other analysts covering Yahoo! Inc. (NASDAQ:YHOO). Jefferies on Yahoo! Inc. (NASDAQ:YHOO)  Purchase of Tumblr Tumblr Is Arguably a Strong Content Creation and Social Sharing Platform. Tumblr’s 10M+ registered users create 120,000 new blogs every day. There are ~100M in total thus far. The platform generated ~117M UV’s globally in the month of April +80% Y/ Y; ~30% of those were from the U.S. ~25% of the company’s traffic came exclusively from mobile (Comscore). Tumblr Has Unique Psychographic Insight of
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Dan Loeb has put forward a proposal to Sony Corporation (NYSE:SNE) (TYO:6758), as a leading shareholder with a 6.5% equity stake (over $1 billion according to Jonathan Soble in Tokyo and Sam Jones in London of the Financial Times). The proposal has also been published. It includes (1) suggesting taking 15-20% of Sony Entertainment public, (2) a focus on industry-leading businesses for Sony Electronics, and (3) an offer to take a seat on the board of directors. The heart of the proposal lies in realizing the intrinsic, embedded enterprise value of competitive businesses such as Sony’s entertainment and CMOS sensor operations. Most analysts agree with Dan Loeb on this one. Earlier we brought you commentary from CLSA Asia. BAML and Nomura also side with Loeb. However, Goldman believes that Loeb’s proposal for a spinoff/IPO cannot help the company that much. Below BAML, Nomura and Goldman weigh in on the debate. Nomura We think Mr. Loeb’s bold proposal bears consideration. He is correct that in our report of 2 April, we had not really considered the latent value in the entertainment businesses. We recognise this latent value may indeed exist. We have been increasingly bullish on Sony Corporation (NYSE:SNE) (TYO:6758)’s shares due to its
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Greenlight Capital Q1 2013 letter to shareholders is out. Earlier today, Sam Forgione of Reuters had a short summary on the Greenlight Capital Q1 2013 letter. Greenlight Capital is up 5.8 percent net for Q1. Returns in April were hurt by losses in gold. Below we have the full hedge fund letter (see Greenlight Capital Q42012 here). Some notable comments from the letter include CEO David Einhorn’s (more subtle) attack on Ben Bernanke and other Central Bankers’ policies. Greenlight is profiting off of Japanese Central Bank actions with their yen short position. The letter discusses the large holding in Apple Inc. (NASDAQ:AAPL), and the hedge fund’s bullishness on the tech giant. David Einhorn jokes that the media over-reacted to recent news from Apple and made the company sound as if they had hired Microsoft CEO Steve Ballmer, whom Einhorn has critiqued in the past. Einhorn notes that he still believes  Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is a good short (the May 8th letter quotes GMCR’s closing price before the 23 percent gain today). Einhorn closed other shorts and longs including, ESV, AVB, MBIA, and XRX. One new position is Greenlight’s purchase of  Evonik. Einhorn discusses his purchase of Oil States International, Inc. (NYSE:OIS), which he
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Carl Icahn has just increased creased his stake in Herbalife Ltd. (NYSE:HLF) according to a filing with the SEC. According to the 13D filing on Herbalife (NYSE: HLF), Carl Icahn now owns 16.48 percent, or 16,966,485 shares, in the MLM company. This number is an increase of approximately 6 percent from the 16,032,415 shares which Icahn held at the end of the first quarter of 2013. Carl Icahn has been purchasing shares from the 8th of March through May 3rd according to the document. The average price which Icahn paid was around $41 a share. Herbalife recently reported Q1 earnings which exceeded forecasts of analysts. Bill Ackman vs. Carl Icahn   Regarding Q1 earnings and the Icahn versus Ackman debate, Canaccord Genuity noted in a recent report: Given Q1 offered the first full quarterly look at US trends amid the heightened investor scrutiny and media storm, these results were of a higher importance than usual. We anticipated some softening in the US as we don’t believe the domestic Herbalife distributor base is fully insulated from the Wall Street controversy that is playing out very publicly. The Q1 US results confirmed softer growth, but the pressure is largely self-inflicted as Herbalife began to rein in online lead generation sales and a
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J.C. Penney Company, Inc. (NYSE:JCP) has just reported preliminary unaudited earnings for the quarter in connection with a recent financing transaction. Full earnings will be provided by the company on May the 16th. As of May 4th 2013, J.C. Penney estimates that it has $821 million cash on hand and debt of $3.818 billion. The company expects revenue of $2.635 billion for Q1. The company expects same store sales to decrease 16.6 percent for first quarter compared to the same period last year. The earnings have been highly anticipated by investors amid news of George Soros taking a large stake in the struggling retailer, the appointment of a new CEO, and concerns about the company’s cash flow. Shares are currently up 2.3 percent after hours on the results. Financing Details — J.C. Penney Company, Inc. (NYSE:JCP) disclosed it has entered into a commitment letter with Goldman Sachs Group, Inc. (NYSE:GS) for a $1.75 billion 5-year secured term loan. The UOP will be to tender for the 7.125% debentures due 2023 and general corporate purposes. Many also expect some proceeds will be used to repay $850 million of outstanding revolver borrowings. Security of New Facility — Collateral includes J.C. Penney Company, Inc. (NYSE:JCP)’s Headquarters and
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Bank of America received significant positive news on the legal front on Friday after the close as three very critical and visible parties – New York State Attorney General, Delaware State Attorney General, and Federal Housing Finance Authority (FHFA) – will no longer object to the $8.5 bil mortgage settlement with private investors that was first agreed upon in 2011 (but has been tied up in courts for two years). In addition several other small investors have also withdrawn their objections to the deal recently. Bank of America Corp (NYSE:BAC)’s Reasonable Chance At Receiving Court Approval Analysts at BAML believes that this reduces some of the risk as the Attorneys General have been very vocal in their objection to the settlement. This change also implies that the AGs believe Bank of America Corp (NYSE:BAC) has a reasonable chance at receiving Court approval for the settlement, although the Attorneys General did not explicitly approve of the settlement. This removes several objectors to the settlement – few others remain, most notably American International Group Inc (NYSE:AIG). Note that the hedge fund that started the objection process, Walnut Creek (Baupost Group), already withdrew its objection to the deal. Objectors hope to get a larger
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Jean-Marie Eveillard, who oversees more than $65 billion, spoke with King World about the recent turbulence in the gold market and what long-term investors should focus going forward in this environment. Below is what the legendary value investor had to say in this exclusive interview. Eric King:  “People are going through a tough time in the gold market.  What do you say to them?” Jean-Marie Eveillard:  “I say either you are a trader or you are an investor. If you are a trader they are very sensitive to short-term developments and the technical position of the asset.  If you are an investor it’s different.  If you look at the gold market, already in late 2008 it went down very sharply…. “It went down even after both (President) Obama and Mr. Bernanke had said, ‘We will do whatever it takes.  (President) Obama said it first and then Mr. Bernanke repeated it, ‘We will do whatever it takes.’  To my mind this meant that they would be printing money, which of course is what they did.  So why should the gold price go down?  There was no good reason for the price of gold to go down.  Nevertheless it went down. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/2_The_Man_Who_Oversees_$65_Billion_Discusses_Action_In_Gold.html 'Get
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Man Group Plc (LON:EMG) reported Q1 closing FUM $2.2bn lower at $54.8bn, slightly below estimates as net outflows increased to -$3.7bn in Q1 (Q4 12: -$2.7bn). Lower gross sales than recent quarters at $2.5bn were offset by higher gross redemptions at -$6.2bn. Despite better performance across the product range. Man Group Plc (LON:EMG) management remains cautious on flows noting that AHL could need a prolonged period of better performance before flows improve. Top value hedge fund recently took a large stake in Man Group, however, this topic was not discussed by management. Other public hedge funds have shown mixed results this quarter. Summary of Man Group Q1 The risk-on, risk-off pattern we have seen over recent years has given way to markets characterized by reduced correlation between major asset classes, and more importantly, the reassertion of trends. Against this background Man Group saw good performance across the hedge fund’s three investment engines. AHL and GLG funds AHL Diversified, Man Group’s flagship fund was up 10.4% to April 29. $9.5b of AHL open-ended funds under management are 4.5% away from high water mark on a weighted average basis, with over 70% at or within 5% of high water mark. The majority
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Third Point has just released their shareholder letter for April. The event driven hedge fund managed by Dan Loeb returned 1.4 percent in the month of April. That brings the year to date return up to 10.5 percent versus a return for the S&P 500 of 12.7 percent. The leveraged Third Point Ultra is up even further, and is among the top performing hedge funds in 2013. Assets under management for the hedge fund have hit another record coming in at $12.9 billion, with $6.4 billion allocated to the Third Point offshore vehicle. Third Point top holdings in April The top five holdings for Third Point in descending order, Yahoo! Inc. (NASDAQ:YHOO), Virgin Media Inc. (NASDAQ:VMED), American International Group Inc (NYSE:AIG), International Paper Company (NYSE:IP), and Ally Financial. The list consists of no new names, although there was a shift in holdings from the prior month. The top performers of the month in descending order, Yahoo! Inc. (NASDAQ:YHOO), Dan Loeb’s yen short, long Greek Government bonds, American International Group Inc (NYSE:AIG) and JAPAN TOBACCO INC (TYO:2914). Loeb’s returns likely took a hit from his large holding in gold, which was also the largest losing position in April. David Einhorn’s Q1 (and April returns) were dampened by losses from the long position in
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Slovenia will have to shoulder the costs of supporting their banks, which may be higher than the government has envisaged, but in a new report Citi states they do not expect Slovenia to join the club of the bailout countries in the near term. The announced bond issuance provides a window to implement the reform agenda. Still, with implementation risks looming, risk/reward is unattractive, in their view. Slovenia key issues The ‘macro issue’: Slovenia’s fiscal metrics do not look too alarming but the official debt/GDP ratio (54%) likely underestimates its true fiscal vulnerability to some degree, due to contingent liabilities. Slovenia’s key macro challenge is its weak banking system (mostly state owned), which suffers from poor asset quality. This raises the risk of costly bank recapitalization being needed. The ‘bank issue’: Citi’s proprietary stress test suggests a €2.2-3.4 billion (6-10% of GDP) capital need for Slovenian banks and €1.7-2.9 billion post mitigating factors (i.e., liability management). However, it does not foresee bail-in of uninsured deposits, unlike in Cyprus. The setting up of a Bank Asset Management Company (BAMC) would restore the viability of the banking sector, but a thorough and well-communicated plan is key. The ‘funding issue’:  They estimate borrowing needs at c.€2.3
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Ken Griffin of hedge fund Citadel Capital, is not happy with Ben Bernanke. Ken Griffin spoke at the Milken Conference and said QE was destroying jobs and stated: “As we’ve all learned over the years, if you reduce the cost of capital you increase your use of fixed assets and you take out jobs. Corporate America, seeing an ever increasing cost for its employee base and extraordinarily low interest rates, is taking every step it can possibly take to reduce employment, to build factories abroad and domestically to substitute technology and automated processes for people,” Panel Detail: Monday, April 29, 2013 8:00 AM – 9:15 AM Global Markets in Uncertain Times Politics is on the minds of global investors and economic observers. In the United States, debt pressures, ideology and other factors led to the struggle over sequestration, yet the recovery is progressing. Europe is still afloat, but the lifeboat is prone to leaks. In China, a new leadership group is trying to revitalize economic growth amid the pressure of rising needs – which implies growing consumer demand. At the start of the 2013 Global Conference, we’ll bring experience and judgment to bear on the unknowns of the global economy and markets.
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