Shooter MacGavin

All the way down to where it was in November I already spent all my November end gains. :-\

constellation is down ~10% in December?? must be a large seller..... or more likely the whole thing is a giant fraud that is quickly unfolding. probably the latter. :'(

I was at the meeting. He addressed it during Q&A. Look at the transcript for the day session. I didn't quite understand it. I've been meaning to go back over it. "Well, I'll take you on my discovery. I essentially increased my exposure on the upside of the discovery by $75 million by buying $75 million worth of discovery stock. The car I put on was a 7-year state planning hedge, right, that only -- that essentially didn't reduce my upside opportunity in discovery, except on a very large up, right? So I mean, for the confusion that doing that transaction represented because I'm an insider, right? I have a great deal of difficulty in accumulating shares in a company because I have to basically say, 2 days, I booked some shares, right? When I've done that historically, when I announced that first purchase, the stock goes up, and then I'm chasing my tail. So what I find is -- better is to go do a transaction with a counterparty, in which they put the collar on, it's a very long-term collar, right, and I then turn around and bought a delta. I use the shares that, that counterparty is selling into the market. In order to hedge their exposure, I buy that delta for cash. So I increase my exposure, but I'm able to do a 1-day transaction, right? Otherwise, if you're an insider and you try and put a collar on, but you get hosed by the counterparty..." Well, I would -- let me follow up on that question. Because if you're looking at me specifically, don't misinterpret. A lot of the transactions that I engage in are estate planning. They're not -- they don't represent a lack of love for the individual asset. They represent kicking a tax event down the road after this step-up in basis, okay? So you've got to be a little careful interpreting. On discovery, I bought stock straight up at -- in the mid-teens after the Scripps deal was announced. I thought it was cheap. I bought it fairly heavily in the low 20s when I thought -- and now I bought a bunch more at $28.03, which was actually the price on the deal. So I'm a believer in that particular -- there are other businesses that I have personally exited because I cease to be a believer, but those are typically businesses in which I have no longer retained a Board or control position.

Thanks! I didn't realize there was a DISCK thread!

Recently, John Malone did something interesting with his discovery shares. He purchased 2.6M more but he also entered into a zero-strike collar locking his upside at $35 and his downside at $25 for 3.6M shares, with about 350k shares in a collar at anyone time. My guess is he's planning on selling that many shares periodically over the next 8 or so years and wants to make sure he gets at least $25 for it. Here's the filing. https://www.sec.gov/Archives/edgar/data/937797/000120919119056842/0001209191-19-056842-index.htm Anyone else want to speculate why he would both purchase stock and enter into this zero-cost collar position?

I think the bigger reason for the stock move is that Citi upgraded the stock and pushed the price target up to $80 from $76. I think the results were ok. Alaska was less of a horror show than usual. They didn't buy any GCI stock even though there is a meaningful NAV discount because they are too levered. In hindsight owning CHTR directly would have been a waaaay better buy. I think Liberty f'ed up on this GCI asset. They should merge it with Liberty Trip and qurate and rename the ticker to LSHITK.

I’ve looked at them a few years ago and read that writeup. I don’t think the write up is correct in comparing them. Pretty different models. Not mission critical, using more debt and issuing more shares, etc. I've owned this since late last year. It's not Constellation in quality (measured by stickiness of customers, niche verticals, accounting conservatism, management, reputation etc) , but I think the upside from here is comparable to higher, simply because they use leverage like Transdigm does though they're not as aggressively levered, and of course they're a tiny fraction of the size of CSU by revenue (5% or so). Enterprise software is sticky obviously and recurring revenue is high so leverage is kind of a no brainer. It's a Vista or PE model. The management is decent and experienced and incentivized and thinks about capital allocation well. I could do without their need to constantly throw out/invent new sales-y, jargon-y terms like "lights out, best-in-class", "committed to customer excellence" with every call. Seems to be a thing in software world though. They are a clearing house for VC funds. VC funds need upland and other companies like them to liquidate their funds. Upland fires and outsources developers. They use crossover and devfactory to get this done (owned by ESW, who incidentally is an owner). You could make a case that since they're coming off a smaller base, that if present circumstances continue, (ability to redeploy all cash + debt into acquisitions) then you have a 30% compounder for the next several years. Organic revenue is higher than CSU's for the moment but of course these guys are all cloud based while CSU has a majority legacy license/maintenance type model. Organic revenue in software, as we all know, is magic, especially the recurring kind. at 20x Adj. EPS, it's not terribly expensive. Oh and they get to buy a lot of companies with NOLs simply because they're buying money losing things out of a VC portfolio. If you scan Gartner for some of their products, they get good reviews, though I doubt any of them are leaders in their niche.

I think they just meant the market cap. It's a weirdly written press release. ohhhhh! thanks for clearing that up ::)

a $20B provider (big numbers! ......probably worth of gross merchandise volume that they do marketing for)...doesn't say much about revenue.

If you own the stock through IB, are you automatically a DTC shareholder?

awesome thanks!

I'm not sure, but I think it's for the best. Do you really want the govt france sitting on the board, dictating capital allocation policy and what plants can and can't be shut and who can and can't be laid of in-spite of overcapacity? Right now we have Elkann with the majority vote sitting on gobs of cash with a stock at 3x P/E (and probably much lower tomorrow). I think we are maybe better set up (at least nearer term). Can't deny the logic of the deal though, but it looks complicated with all the stakeholders. Hopefully FCA can join the alliance in some way without merging the companies.

Now is the $2.5B Euro dividend in the deal on top of the $2B Euro dividend being paid out this week? Plus the Comau shares on top of that. Cheers! So it looks like we get our: - $2B Euro (1.46 USD/share) special dividend (from Magnetti deal) this week - plus another $2.5B Euro (approx $1.75 USD) equalization dividend through the merger - plus another $0.18 USD /share dividend in cash or Comau spinoff shares - plus the $3.55 Euro / 5.328 merger exchange or $0.74 USD / FCAU share Renault annual dividend on June 19th! Cheers! I'm running a pro-forma basic post-deal analysis. I do not doubt the industrial logic of this deal. I would have to defer to Sergio's Capital Junkie/Elkann/FCA mgmt analysis on the logic of this deal but it makes sense. However, with the caveat that I do not know Renault very well, I don't think this is a better economic deal taking into account FCA's original 2022 plan for FCA shareholders. Basically, it seems like we are effectively (though I know its a merger of equals) giving up half our ownership in an extraordinarily cheap stock with lots of potential to purchase a less extraordinary investment (though apparently still well run) concentrated in somewhat rocky markets such as Russia/Iran and a business unfriendly European union. Additionally, the $5B of projected run-rate synergies don't seem to make up for the economics that would flow to current FCA shareholders from the original plan. Look at how much money GM threw out the door trying to get Opel to profitability in Europe finally relegating it to Peugot. Eur 5B is incredibly optimistic in my view. That is 50% higher than Adj. EBIT of the two companies together currently. I don't know enough about Renault and what they are hoping to accomplish in terms of headcount and revenue synergies (cross-distribution) and I wish these European companies were better about talking it through on a call, but I'm not thrilled about it based on my initial analysis. Would love to hear some different thoughts from anyone who has run their own analysis. Thank you. I originally felt the same way until I looked at Renault's finances: - Renault does half as much in revenues, but both gross and net margins are higher than FCAU - Net income for both companies is about $3-3.5B Euro a year each - Renault's balance sheet is slightly better than FCAU when you back out the finance division...and both companies have an equal amount of cash available. - Renault has a successful finance division, which could easily be adaptable to FCAU. - Renault at the time of the deal was a $51 stock after their dividend...trading at $64 right now which bodes well for FCAU stock moving up based on the ratio - FCAU price to book at time of deal was about 0.7...Renault was at 0.4 - Price to cash flow for both businesses was about the same at 2.2-2.3 - Market cap of 43% of Nissan owned by Renault alone, was nearly equal to Renault's entire market cap. So we merged with a company on equal terms or better than ours to make us 3rd largest in the world, received 21.5% of Nissan for free, plus will receive nearly $3 USD per share in cash. On top of that, we would become a global auto company with electric technology that could easily be adaptable to our vehicles. Cheers! Sanjeev, Great points. I reached the same conclusion after diving into Renault more. My biggest mistake was assuming Nissan was included in their Adj. EBIT numbers but it's actually a separate line. The more I'm learning about the Alliance the more I realize why this deal is potentially incredible (on paper for us nerds) but culture and execution and regulatory blessings are obviously important. I'm not sure that Renault's captive finance arm will be of much use in the US, at least not for a while. FCA already has JV captive finance arms overseas. But who knows? I'm not sure what the regulatory implications of setting up a US captive are. Rumors re: Comau sale were for $2B, so I do think we'll likely see a spin rather than a EUR 250M payout. Doing more work on it, but great insight so far. Thanks for sharing.

Now is the $2.5B Euro dividend in the deal on top of the $2B Euro dividend being paid out this week? Plus the Comau shares on top of that. Cheers! So it looks like we get our: - $2B Euro (1.46 USD/share) special dividend (from Magnetti deal) this week - plus another $2.5B Euro (approx $1.75 USD) equalization dividend through the merger - plus another $0.18 USD /share dividend in cash or Comau spinoff shares - plus the $3.55 Euro / 5.328 merger exchange or $0.74 USD / FCAU share Renault annual dividend on June 19th! Cheers! I'm running a pro-forma basic post-deal analysis. I do not doubt the industrial logic of this deal. I would have to defer to Sergio's Capital Junkie/Elkann/FCA mgmt analysis on the logic of this deal but it makes sense. However, with the caveat that I do not know Renault very well, I don't think this is a better economic deal taking into account FCA's original 2022 plan for FCA shareholders. Basically, it seems like we are effectively (though I know its a merger of equals) giving up half our ownership in an extraordinarily cheap stock with lots of potential to purchase a less extraordinary investment (though apparently still well run) concentrated in somewhat rocky markets such as Russia/Iran and a business unfriendly European union. Additionally, the $5B of projected run-rate synergies don't seem to make up for the economics that would flow to current FCA shareholders from the original plan. Look at how much money GM threw out the door trying to get Opel to profitability in Europe finally relegating it to Peugot. Eur 5B is incredibly optimistic in my view. That is 50% higher than Adj. EBIT of the two companies together currently. I don't know enough about Renault and what they are hoping to accomplish in terms of headcount and revenue synergies (cross-distribution) and I wish these European companies were better about talking it through on a call, but I'm not thrilled about it based on my initial analysis. Would love to hear some different thoughts from anyone who has run their own analysis. Thank you.

It's not that bad. It's actually fairly good. They bought a company in 4Q18 which had a 13M EBITDA loss in 1Q19 for which they got $53M from the seller to plug the hole. Therefore normalized for that EBITDA grew almost 21%. Depreciation expense would've been 7M but they adopted IAS16. So there is some increased depreciation relative to last year. This is due to the totally unnecessary right of use stuff showing up on balance sheets for leases. If you normalize - then you get something like a 21% growth in Adj. EPS, with $9 in excess cash on the books after subtracting the dividends payable. There's some fx stuff too and bargain purchase gains. But that's my initial take. no one thinks negatively on the "bargain purchase gain" accounting here? seems like a net income boost without merit? ... ie they paid what they paid, shouldn't be marked as if they paid more? they strip it where they report Adjusted Net Income.