Monthly Archives: August 2019

Some links

Good writers seem to be better (Hedge-) fund managers

The Valuesque Blog with a great deep dive on the GE/Baker Hughes accounting and the Markopolis Report

Another new Langfrist fund with its initial report: Compound Interest

Yetanothervalue blog with its August roundup post (dieting, short selleng etc.)

A good collection of Stock spin-off links

Broyhill half year letter to investors

A nice investment check list from the UK value Investor

Some links

John Hempton on Bank margins – Part 1 and Part 2

Ben Evens explains why Tesla and Netflix are NOT Tech companies

The Long Term Value blog likes “cigar butt” Gamestop

A good reminder on the potential threat from the “passive” boom in stock investing

Must Read: The Network effect manual

An honest analysis why a small cap investment has gone wrong

The funniest take down of WeWorks S-1 clearly comes from Scott Galloway

My 10 Cents on the WeWork IPO – The “AWS of Commercial Real Estate” or a “Double Hype” ?

WeWork as the AWS of Commercial Real Estate

A lot has been written in the past few days about the upcoming WeWork IPO. I had linked to a few articles on Saturday and FTAlphaville has some pretty sarcastic but good coverage as well.

Yesterday then the always brilliant Stratechery came out with in interesting post. Ben Thompson thinks that WeWork could develop into something like AWS (for real estate) which now is repsonsible for most of Amazon’s profits. But he clearly acknowledges there are a lot of governance issues etc. etc.  The “WeWork is like AWS” story is nothing new and is mostly pushed by WeWork itself and combined with what they think is the adressable market (hint: all commercial real estate globally) could justify almost any valuation.

WeWork’s actual product: Open Plan offices (for start-ups and wannabes)

What I have been missing in the whole discussion so far is a look at WeWork’s actual product which in my opinion is the following:

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Some links

Very nice post: Investment lessons from 3 weeks of fatherhood

Should value investors look at money losing companies ?

Is Coporate Debt the weak link in a potential market downturn ?

Will the WeWork IPO maybe mark the peak of the current Unicorn mania ?  Despite the valuation, there are many red flags in the S-1 prospectus.

Harry Markopolos, main Madoff critic, issued a 170 page attack on GE. John Hempton has a different view (part 1, part 2)

Interested in knowing more about Venture Capital ? Then the free Venture Deals online course  the best opportunity

Must Read: Deep thoughts on the current Venture “Funding bubble” for loss making companies

Some links

Litigation Finance company Burford Capital was “attacked” by Muddy Waters but tries to strike back

Italian based, AIm listed “bio plastic unicorn” Bio-on also was attacked by a short seller

Madison Square Garden Spin-off analysis

The Valuesque blog explains how companies can pump up Goodwill even after an acquisition

A detailed look into UK “quality stock” AG Barr

John Kingham (UK Value Investor) with an analysis of UK bus operator Stagecoach

Paul Singer /Elliott wants to split up Scout24. Their more detailed publication can be found here.

Quick update: Osram Special situation

Disclaimer: This is not investment advice. PLEASE DO YOU OWN RESEARCH.

Ouch, another day, another problem. Yesterday, one of my Special situation stocks Osram lost around -7%.

What happened: The largest shareholder  Allianz Global Investors (AGI) announced that they do not support the offer as they consider the price of 35 EUR per share as too low.

A few observations from my side:

  1. AGI had purchased more Osram shares in the past few months. Beginning in July they announced that they crossed the 10% threshold
  2. However in their press release they talk about >9% stake so they have sold shares in the past 4 weeks, clearly at a price of lower than 35 EUR. So while AGI is critisizing Osram managment for not believing in their company, AGI (or parts of them) also seems to have some problems in believing their own investment thesis.
  3. The press release reads like a marketing pitch for their “active management approach” with high fees which clearly is under threat from passive startegies
  4. They state that “at the moment they would not accept the offer” which in my opinion is not a super hard statement and we are relatively early in the acceptance period
  5. Although AGI states that that they are investors since the initial listing (which is natural if you had owned Siemens shares which they surely had), in various articles it has been mentioned that AGI’s average purchase price is much higher than the 35 EUR offered as they seemd to have increased their position significantly when the stock still went up.
  6. As the basis for their current opinion they use an “independent fairness opinion”. Why do they need that ?

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Quick updates: Vostok New Ventures, Majestic Wine and

Another headline for this post could have been “The good, the (not so) bad and the (very) ugly…

Let’s start with “the ugly” right away:

Yesterday was a pretty bad day anyway but decided that it is a good day to tell investors that a potential sale of the company will not materialize. The whole bidding process has been described in details by the company. In summary, 29 parties looked at the company but no “actionable” bid could be obtained. This alone might not have triggered the -36% share price reaction taht happened yesterday,

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Some links

Great post from A16Z on “Hidden network” business models

Interesting analysis on the application and limits of Benford’s law in order to detect accounting fraud (example Steinhoff)

Q2 report from TGV Intrinsic, a new addition to the Langfrist family

Nice writup on the Juventus Turin turn-around by Greenwood

“Let my people go surfing” (Patagonia story) sounds like a must read book

“Activist” hedge funds are under increasing pressure themselves these days

The GlobalStockPicking blog has discovered an interesting Polish SaaS company called LiveChat