Quick updates: Vostok New Ventures, Majestic Wine and Cars.com

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: Cars.com

Yesterday was a pretty bad day anyway but Cars.com 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

 

Idea generation: Q2 2019 Investment letters

Background:

A few days ago, I posted the link to a Reddit collection of Q2 investment letters. Many of these letters plus some others in my opinion are good inspirations to lok for new ideas.  With less time available for me to create “original” ideas, I mentioned some time ago that I will use these letters much more to find interesting cases than in the past.

Inittially, I wanted to create my private “to do”list of companies that I want to look at. The criteria for selcting ideas is quite subjective.

However in order to leverage my readership, I  decided to create a post with my selected “stolen ideas” and hope for some constructive feedback from my readers. Here is the list what I found interesting and why.

Selected ideas from Q2 letters:

Choice Equities: Par Technology
Interesting case of a “sum-of parts” company with a SaaS business hidden behind other stuff

Tweedy: BASF
One of the better managed German companies. Cyclical but potentially good opportunityin a real economic downturn. Business is hard to disrupt

Alta Fox: Keyword Studios
Interesting business model (outsourcing of Video Game prodcution) and European based company. Expensive but potentially very interesting.

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Special situation Quickie: Acacia/Cisco & Grandvision/ EssilorLuxottica

First of all thanks to the readers that mentioned these two potential M&A arbitrage situations.

Acacia/Cisco

Acacia, a US based received a take over offer from Tech Giant Cisco valuing the company at 2.6bn or 70 USD per share. The offer price included a 46% premium on the undisturbed price. The stock traded at the time of writing at 64,75 USD, indicating a 5,25 USD or a 8,1% premium.

The transaction is expected to close at the end of Cisco’s Q2 FY 2020 which if I have read it correctly translates into January 2020.

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Some links

My friends from Langfrist have issued their half year reports:
TGV Partners 6M 2019
TGV Truffle 6M 2019
TGV Rubicon 6M 2019 

Interesting analysis why Value Investing seems to underperform in times of technological revolutions

A great deep dive into the current state of streaming video

Good summer reading list from A16Z

SaaS mania: Recent IPO Zoom now trades at ~62 times revenue

Machines these days can play online poker really well

Ray Dalio on Paradigm shifts

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