Category Archives: Uncategorized

Transaction Updates: German Startups Group (Sell), Miko (Sell)

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Disclaimer: This is not investment advice. Please do your  own research !!!!

German Startups Group – Sell

As mentioned in the comments of the original post, I sold out the complete position today at an average price of ~1,71 EUR per share.

When I established the position in December 2019, the case was simple:

My assumption was that the intrinsic value of the portfolio was higher than the ~ 1,40 EUR share price, that the management would continue to liquidate the portfolio  and that there would be a catalyst in form of share repurchases.

From an incentive perspective, the CEO had a big incentive to move the share price above 1,80 EUR so that the management fees would kick back in.

Implicitly however there was always the risk, that the CEO would hesitate to reduce the asset base as this would reduce the AUM and management fees accordingly, but the risk/return profile looked OK for me.

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All German Shares part 26 (Nr. 551-575)

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After a 4 week break, a new batch of 25 randomly selected German shares. Seven of them I found worth “watching”, although none of them with super high priority. And only 200 more stocks to go 😉

551. Pfeiffer Vacuum AG

Pfeiffer is a 1.7 bn company that specializes in vacuum technology and especially vacuum pumps. the stock price recovered quickly after the crisis despite a pretty disappointing 2019 and is still within the long term growth path:

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Panic Journal 9 – “End of Season 1”

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Roughly 4 months have passed since my first post that I called the “Panic Journal” series in order to document my thought process during the “corona crisis”. Time to look back and reflect. These were the posts so far:

March 9th Part 1 – Baby steps

March 15th Part 2 – Fear & Bullet proof your portfolio

March 18th Part 3 – Expert Virologists and statistics

March 23rd Part 4 – Consolidation

March 29th Part 5 – Everyone has a plan

April 13th Part 6 – After the Hammer

May 7th Part 7 – Where is my bail out

June 7th Part 8 – Easy Dancing

Major missjudgements made: Covid-19 winners and time available

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Wirecard follow up (2) – BAFIN, sell side analysts, portfolio managers and others

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As promised last time, the follow up to the follow up. Let’s look at a few other “actors” in this developing crime story.

A few updates:

Yesterday, the German authorities started searching offices and private homesa second time with a big team of over 50 people. The new CEO in a feature story of Manager Magazin seems to have found out on his first day that the fraud started at least 5 years ago. After the crazy idiot speculator orgy the last two days, the stock seems to approach back its intrinsic value of 0,00 EUR per share.

The local newspaper SZ “discovered” that the escrow accounts were not the only fraud and and a lot of well known clients & cooperation partners leave the sinking ship rapidly, for instance Aldi Süd, Allianz and Softbank.

My new prediction is that not only the stock is a zero but all debt at TopCo level is essentially worthless.

There is also a very good interview with Dan McCrum on finanz-szene.de which covers a lot of aspects that I have been writing about. Most interestingly, McCrum promises to “tell the bigger story”……

The German Regulator BAFIN and what went wrong there

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Wirecard follow Up – Open questions & some wild guesses

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Thanks to a week of vacation I was on “read only” mode since I posted my Wirecard story 11 days ago.

Since then a lot of things happened, such as EY suddenly doubting the existence of 1,9 bn in “cash”, Wirecard releasing a really strange 2 minute video Statement, the CEO resigning, the CEO being arrested and subsequently released on a 5 mn bail, the COO having disappeared somewhere between the Philippines and China and the company finally filing for insolvency.

As mentioned in the earlier post, the insolvency is not really a surprise, but to be honest, the speed of the unraveling was clearly surprising. Equally surprising was today’s share price movement of ~+130% at the time of writing, resulting in a market cap of 360 mn EUR.  With the senior bonds trading at only ~18,6% of notional and falling further, it is pretty clear that shareholder will end up with a zero, but the gamblers and day traders seem to have a lot of fun. Personally, I think even the unsecured borrowers (Hi Softbank !!) will end up with a nice “Donut” due to the weak creditor protection in Germany.

The Book/ The Movie

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Wirecard – the “German Enron” & a very personal history 2008-2020

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For those who just came back from a 15 year space mission: Wirecard is a German  company that according to its website is ” one of the world’s fastest-growing digital platforms for financial commerce”. It managed (briefly) to achieve a market cap of close to 25 bn EUR and is part of the German Blue Chip index DAX 30. The stock lost -62,71% today which is most likely a record for a DAX company for a single day.

Backstory / Personal history 2008

This is an article I wanted to write for a long time but I was actually afraid to do so for several reasons.

Wirecard is a company/stock that I have been following for a very long time. My first “encounter” with the company ended in a kind of “5 minutes of fame” situation with some very unpleasant side effects.

The story starts in May 2008 when a post appeared under the pseudonym memyselfandi007 on Wallstreet Online, the largest German stock community/forum. (fun fact: This Thread seems to have been read 17,8 million times, so a lot more than all my blog posts on V&O combined….).

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Nikola Motor Company (NKLA) – The SPAC is back (plus a magic money machine).

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Intro

Nikola is a company I haven’t heard of until a week ago or so. It is a pre-revenue, prototype-product company that according to their web site develops Hydrogen fueled and electric trucks.

The VC past

The company did a Series D funding round in September last year at a pre-money valuation of 3 bn USD which is quite remarkable for such an early stage company and they seem to have received ~500 mn USD from corporate partners CNH, Bosch and Hanwa. Although the valuation would raise some eyebrows, this would be still not considered super crazy by VC standards if they have a great team and great technology assets.

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Some links

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The Undervalued Shares blog has started an interesting “Behind the scenes” series

A good summary from A16Z on how moats develop

Ben Thompson with some deep thoughts on platform business models (Shopify)

A good summary of the crazy things in the capital markets that happened in the last few months

An interesting in depth story on the Luckin Coffee fraud (WSJ, paywall)

Deep Dive on stock based compensation

Alternative data use for predicting asset prices is booming

 

Some links

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The ProfitHunting blog with a nice series on Disney – Part 1, Part 2, Part 3

Larry Swedroe thinks that even 10 years are too short to judge active investment managers

Some deep thoughts on E-Sports and value creation

How an oil ETF become the driving force of the recent oil price crash

The case for (Quality) Small Cap Value stocks

Must Read: Paul Singer’s (pesimistic) letter to investors 

Jeff Bezos letter to Amazon shareholders

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