Tilson: Long Spirit Airlines, Short Wayfair [SLIDES]

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Whitney Tilson’s slides on his favorite long and short ideas from Robin Hood

Whitney Tilson: An Update on the Two Short Ideas I Pitched at the Robin Hood Conference Two Years Ago

Lumber Liquidators Has Collapsed

  • Amidst a formaldehyde scandal exposed by 60 Minutes, the stock has fallen 88% from $115.36 to $13.87
  • Sales and SSS are down double digits and the company is now reporting losses – trends that I don’t expect will reverse anytime soon
  • I believe the business is likely permanently impaired, so it remains a significant short position in my funds

Interoil Has Been More Than Cut in Half

  • IOC has fallen 58% from $86.50 to $36.44
  • My belief was (and is) that this is nothing more than a run-of-the-mill (albeit clever) natural resources promotion (natural gas in Papua New Guinea, of all places)
  • After more than a decade, Interoil still hasn’t produced a single MCF of natural gas – and I don’t think it ever will
  • I got fatigued and covered the short – but my view on the company/stock hasn’t changed a bit

Whitney Tilson

Whitney Tilson: An Update on the Long and Short Ideas I Pitched at the Robin Hood Conference Last Year

Exact Sciences, My Primary Short Idea, Has Fallen 61%

  • The stock has fallen 61% from $24.22 to $9.39
  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued recently is devastating for Exact Sciences’ only product, Cologuard
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more last month ~$10

Whitney Tilson

Even Though the Stock Had Been Cut in Half, I Pitched Lumber Liquidators Again

  • I presented this slide:

Whitney Tilson

Lumber Liquidators Subsequently Collapsed an Additional 76%

  • Though it had already been cut in half (from $115.36 to $57.63) since my first presentation, it was still a fantastic short, as it’s since fallen another 76% (from $57.63 to $13.87)
  • A good lesson on not falling into the “I missed it” trap – you hadn’t missed it
  • What the definition of a stock down 90%?
  • Answer: A stock down 80%…that then gets cut in half!

Whitney Tilson 5

See full slides below.

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