DISCA/DISCK - Discovery Communications

[wabuffo]

So he caped his upside at 35, only 16% from current level?

 

I'm not an option expert, but Malone is short the stock via the collar - so wouldn't he generate tax losses without having laid out any cash (if the underlying common rises above the call strike)?  This will raise the effective cap on his upside.  We don't know by how much, but I would imagine long-term, slightly OTM, European-style options are expensive.

 

wabuffo

[argonaut]

I have some additional questions/observations

 

1) can someone please post a link to the expanded QA transcript?

2) since his main goal was to acquire more shares and he has now .. I would think he either has or would at some point unwind the collar... unless he really is just using it to make a few million conservatively vs a substantial amount of it (with the corresponding risk of a substantial loss too if it didn’t work out) was completely unwound ... I would expect to see more form 4 filings ...

 

 

[Munger_Disciple]

So he caped his upside at 35, only 16% from current level?

 

I'm not an option expert but Malone is short the stock via the collar - so he'll generate tax losses without having laid out any cash.  This will raise the effective cap on his upside.  We don't know by how much, but I would expect long-term, slightly OTM, European-style options are expensive.

 

wabuffo

 

European style options can only be settled at expiration date, not before unlike American style options. So I don't believe Malone can generate tax losses before the expiration date from the collar. In any case, the loss from the call (assuming stock goes way past $35) will offset the gain from the stock and his effective sale price will only be $35 at expiration. Malone is incrementally positive on DISCK but not hugely so.

 

The only advantage I see with hedging (as opposed to selling stock when/if it hits $35) is that Malone is postponing taxes on the "sale" into the very far future and if (God forbid) he passes away before the collar expiration date, his estate owes no taxes on the "effective sale" at $35. But make no mistake, he is basically selling all the upside on 3.65M shares above $35.

[undervalued]

So he caped his upside at 35, only 16% from current level?

 

I'm not an option expert but Malone is short the stock via the collar - so he'll generate tax losses without having laid out any cash.  This will raise the effective cap on his upside.  We don't know by how much, but I would expect long-term, slightly OTM, European-style options are expensive.

 

wabuffo

 

European style options can only be settled at expiration date, not before unlike American style options. So I don't believe Malone can generate tax losses before the expiration date from the collar. In any case, the loss from the call (assuming stock goes way past $35) will offset the gain from the stock and his effective sale price will only be $35 at expiration. Malone is incrementally positive on DISCK but not hugely so.

 

The only advantage I see with hedging (as opposed to selling stock when/if it hits $35) is that Malone is postponing taxes on the "sale" into the very far future and if (God forbid) he passes away before the collar expiration date, his estate owes no taxes on the "effective sale" at $35. But make no mistake, he is basically selling all the upside on 3.65M shares above $35.

 

You always amazed me Munger. I believe you nailed it. He kept mentioning that every move he made are related to his estate planning and not related to specific companies economic.

[wabuffo]

European style options can only be settled at expiration date, not before unlike American style options. So I don't believe Malone can generate tax losses before the expiration date from the collar.

 

I did not say this - I know what European options are. 

 

In any case, the loss from the call (assuming stock goes way past $35) will offset the gain from the stock and his effective sale price will only be $35 at expiration.

 

Yes - but that's pre-tax.  Malone laid out cash for the common stock.  He laid out no net cash for the options - but he generates a tax loss at expiry (again assuming DISCK is higher at expiry of the options).  The after-tax benefit of that gives him a higher tax-adjusted cap than the strike of the call. Plus, he doesn't just generate a tax loss from the calls, he also creates a loss from the puts he "bought" which expire worthless.

 

As I said before, since European style options are more expensive than American style options for the same seven-and-a-half year duration (because European options can only settle at expiry while American options can be exercised throughout the duration), these losses on the collar might create relatively large tax losses for Malone relative the underlying common position he purchased.

 

I'm not saying he didn't give up something - but he gave his reasons for why he executed this transaction.

 

wabuffo

[wabuffo]

Also why does a collar help with taxes if he passes away?  His heirs presumably get to step-up the basis of the common stock.

 

wabuffo

[cameronfen]

Also why does a collar help with taxes if he passes away?  His heirs presumably get to step-up the basis of the common stock.

 

wabuffo

 

My guess is and perhaps this is what Munger is getting at is that he probably wants to sell Discovery now, but that would trigger taxes.  So he buys long dated options to lock in his gains in the hopes that when he dies his heirs will get to step up their basis and be able to sell without triggering taxes. 

[dwy000]

Option theory states that American and European options will trade at the same price because you would never exercise prior to expiration, you would sell the option.  There are various reasons why you might want to but the economics are such that selling is better than exercising. That's the theory at least.

 

[maxthetrade]

European style options can only be settled at expiration date, not before unlike American style options. So I don't believe Malone can generate tax losses before the expiration date from the collar.

 

I did not say this - I know what European options are. 

 

In any case, the loss from the call (assuming stock goes way past $35) will offset the gain from the stock and his effective sale price will only be $35 at expiration.

 

Yes - but that's pre-tax.  Malone laid out cash for the common stock.  He laid out no net cash for the options - but he generates a tax loss at expiry (again assuming DISCK is higher at expiry of the options).  The after-tax benefit of that gives him a higher tax-adjusted cap than the strike of the call. Plus, he doesn't just generate a tax loss from the calls, he also creates a loss from the puts he "bought" which expire worthless.

 

As I said before, since European style options are more expensive than American style options for the same seven-and-a-half year duration (because European options can only settle at expiry while American options can be exercised throughout the duration), these losses on the collar might create relatively large tax losses for Malone relative the underlying common position he purchased.

 

I'm not saying he didn't give up something - but he gave his reasons for why he executed this transaction.

 

wabuffo

 

 

Usually American style options are more expensive because they can be exercised at any time vs. European options which can only be exercised at the expiration date of the option.

[wabuffo]

Usually American style options are more expensive

 

Ok thanks

 

wabuffo

[Munger_Disciple]

 

You always amazed me Munger. I believe you nailed it. He kept mentioning that every move he made are related to his estate planning and not related to specific companies economic.

 

Thanks for your kind comments undervalued! Much appreciated.

[Munger_Disciple]

Also why does a collar help with taxes if he passes away?  His heirs presumably get to step-up the basis of the common stock.

 

wabuffo

 

My guess is and perhaps this is what Munger is getting at is that he probably wants to sell Discovery now, but that would trigger taxes.  So he buys long dated options to lock in his gains in the hopes that when he dies his heirs will get to step up their basis and be able to sell without triggering taxes. 

 

Exactly

[Munger_Disciple]

 

In any case, the loss from the call (assuming stock goes way past $35) will offset the gain from the stock and his effective sale price will only be $35 at expiration.

 

Yes - but that's pre-tax.  Malone laid out cash for the common stock.  He laid out no net cash for the options - but he generates a tax loss at expiry (again assuming DISCK is higher at expiry of the options).  The after-tax benefit of that gives him a higher tax-adjusted cap than the strike of the call. Plus, he doesn't just generate a tax loss from the calls, he also creates a loss from the puts he "bought" which expire worthless.

 

As I said before, since European style options are more expensive than American style options for the same seven-and-a-half year duration (because European options can only settle at expiry while American options can be exercised throughout the duration), these losses on the collar might create relatively large tax losses for Malone relative the underlying common position he purchased.

 

I'm not saying he didn't give up something - but he gave his reasons for why he executed this transaction.

 

wabuffo

 

I guess I don't understand your comments related to tax loss from collar and the benefit to Malone at expiration above the strike price. I don't believe it is correct. Let me explain my reasoning.

 

The cashless collar consists of a short call with strike of $35 and long put @25. Let us further assume that Malone collected a premium (today) of $5 for sale of the call and paid back the $5 to buy the corresponding put, thus resulting in a cashless transaction.

 

Now let us fast forward to expiration date and assume that DISCK is trading at $50 per share. Malone's shares get called. He delivers the shares and gets paid $35 per share. In total he collected $40 per share including the $5 premium. Assuming his cost basis for the DISCK shares is (for example) $25 per share, his capital gain related to call portion of the transaction is $15 per share. In addition his long put expires worthless and therefore his loss related to the put is $5 per share which he deducts from $15 gain and the net capital gain to him at expiration is $10 per share. And this capital gain is identical to the gain if he sold the stock for $35 per share w/o any collar transaction.

 

MD

[spartan]

Does anyone know why the Class B shares (DISCB) are trading so erratically?

 

28% LFCF yield (trailing) on DISCK and DISCA seems very good. ($3 Billion LFCF). Even if it's halved, it's still very good.

 

Fears of a melting ice cube are overblown. They have so much going for them (below). Interested to hear thoughts/opinions.

 

1. High-quality niche brands (Discovery, HGTV, Food Network, TLC, Oprah Winfrey Network, GolfTV (all golf outside US), Eurosport). Huge plus for advertisers.

2. Dominant with female audiences (#1 in industry)

3. Fairly large social media presence (10's of millions of followers across all channels on Instagram alone)

4. Recently refinanced their debt at lower rates. Principal repayment schedule is fairly smooth. 2019 10-K, Note 8

5. Global reach (220 countries, millions)

6. They own all their content

7. They don't compete in "scripted content" space, which is highly competitive and has higher costs. Low CAPEX required.

8. John Malone owns a significant amount of shares

9. Proven shareholder-friendly moves (smart acquisitions, buybacks)

10. Acquisition target (CEO Zaslav claims that they've received calls from everyone, but he thinks they have a good hand.)

11. Corona-friendly (more viewers)

12. TV ads are in a slow decline, but not as bad as people think. Minutes consumed is only down 8% over 10 years. (https://www.statista.com/statistics/730428/tv-time-spent-worldwide/)

13. Currently out of favor

[dwy000]

Does anyone know why the Class B shares (DISCB) are trading so erratically?

 

28% LFCF yield (trailing) on DISCK and DISCA seems very good. ($3 Billion LFCF). Even if it's halved, it's still very good.

 

Fears of a melting ice cube are overblown. They have so much going for them (below). Interested to hear thoughts/opinions.

 

1. High-quality niche brands (Discovery, HGTV, Food Network, TLC, Oprah Winfrey Network, GolfTV (all golf outside US), Eurosport). Huge plus for advertisers.

2. Dominant with female audiences (#1 in industry)

3. Fairly large social media presence (10's of millions of followers across all channels on Instagram alone)

4. Recently refinanced their debt at lower rates. Principal repayment schedule is fairly smooth. 2019 10-K, Note 8

5. Global reach (220 countries, millions)

6. They own all their content

7. They don't compete in "scripted content" space, which is highly competitive and has higher costs. Low CAPEX required.

8. John Malone owns a significant amount of shares

9. Proven shareholder-friendly moves (smart acquisitions, buybacks)

10. Acquisition target (CEO Zaslav claims that they've received calls from everyone, but he thinks they have a good hand.)

11. Corona-friendly (more viewers)

12. TV ads are in a slow decline, but not as bad as people think. Minutes consumed is only down 8% over 10 years. (https://www.statista.com/statistics/730428/tv-time-spent-worldwide/)

13. Currently out of favor

 

I'm a shareholder so I believe in the long story and valuation more than the downside but there are a lot of questions/issues that offset the list above:

 

- cable bundles are in decline and that may be accelerating;  Discovery is a core in the bundle;

- because of above, the subscriber numbers are likely to be relatively flat and face long term headwind;

- ad spend has been hit hard even if viewship has held up.  DISC doesn't benefit as strongly from political as network

- the streaming service has been poor to non-existent.  They just fired the head they brought over from Amazon recently;  They are so late to the game and behind that it is questionable if there is ever going to be a product there.

- they own their content but unscripted shows are rarely binged or watched repeatedly. 

- they've never done a stellar job of monetizing viewership.  If I have to hear Zaslav talk about their outsized share of eyeballs vs ad spend as an opportunity one more time....

[hasilp89]

Anyone have any thoughts on the DTC discovery + launch. Zaslav did his usual promotional sales pitch but curious what people are seeing as headwinds or tailwinds. While I question whether they are to late in the game, they have content people like and there could be significant upside if it actually takes of.

[Nelg]

Does anyone know why the Class B shares (DISCB) are trading so erratically?

 

28% LFCF yield (trailing) on DISCK and DISCA seems very good. ($3 Billion LFCF). Even if it's halved, it's still very good.

 

Fears of a melting ice cube are overblown. They have so much going for them (below). Interested to hear thoughts/opinions.

 

1. High-quality niche brands (Discovery, HGTV, Food Network, TLC, Oprah Winfrey Network, GolfTV (all golf outside US), Eurosport). Huge plus for advertisers.

2. Dominant with female audiences (#1 in industry)

3. Fairly large social media presence (10's of millions of followers across all channels on Instagram alone)

4. Recently refinanced their debt at lower rates. Principal repayment schedule is fairly smooth. 2019 10-K, Note 8

5. Global reach (220 countries, millions)

6. They own all their content

7. They don't compete in "scripted content" space, which is highly competitive and has higher costs. Low CAPEX required.

8. John Malone owns a significant amount of shares

9. Proven shareholder-friendly moves (smart acquisitions, buybacks)

10. Acquisition target (CEO Zaslav claims that they've received calls from everyone, but he thinks they have a good hand.)

11. Corona-friendly (more viewers)

12. TV ads are in a slow decline, but not as bad as people think. Minutes consumed is only down 8% over 10 years. (https://www.statista.com/statistics/730428/tv-time-spent-worldwide/)

13. Currently out of favor

 

I'm a shareholder so I believe in the long story and valuation more than the downside but there are a lot of questions/issues that offset the list above:

 

- cable bundles are in decline and that may be accelerating;  Discovery is a core in the bundle;

- because of above, the subscriber numbers are likely to be relatively flat and face long term headwind;

- ad spend has been hit hard even if viewship has held up.  DISC doesn't benefit as strongly from political as network

- the streaming service has been poor to non-existent.  They just fired the head they brought over from Amazon recently;  They are so late to the game and behind that it is questionable if there is ever going to be a product there.

- they own their content but unscripted shows are rarely binged or watched repeatedly. 

- they've never done a stellar job of monetizing viewership.  If I have to hear Zaslav talk about their outsized share of eyeballs vs ad spend as an opportunity one more time....

 

I bought some Discovery last fall at ~5x FCF generally with the same thesis as above, and figured the streaming business (if/when it ever worked) was a free option. At the current price now, it seems to me that you're now paying for some success in streaming.

 

On the other hand, I don't even know how to assess what the streaming business would be worth under a "bluesky" scenario. How are you/anyone else assessing the risk/reward at the current price?

[peridotcapital]

 

I bought some Discovery last fall at ~5x FCF generally with the same thesis as above, and figured the streaming business (if/when it ever worked) was a free option. At the current price now, it seems to me that you're now paying for some success in streaming.

 

On the other hand, I don't even know how to assess what the streaming business would be worth under a "bluesky" scenario. How are you/anyone else assessing the risk/reward at the current price?

 

The C shares still only trade for 8.5x FCF. And that is before the company has even really started to accelerate the buyback program now that leverage is down to their target post-Scripps deal. Seems to me it should trade for more than that (I suspect 10x might be a ceiling due to the stigma of cable tv, even though I actually think it should trade 12-15x based on the assets).

 

That said, I loaded up in the 20's and recently trimmed it back because it was by far my largest position.

 

Even if streaming simply offsets cord cutting, the per-share FCF should explode over the long term, as it has in the past, because they are so aggressive on the buyback side.

[Broeb22]

 

I bought some Discovery last fall at ~5x FCF generally with the same thesis as above, and figured the streaming business (if/when it ever worked) was a free option. At the current price now, it seems to me that you're now paying for some success in streaming.

 

On the other hand, I don't even know how to assess what the streaming business would be worth under a "bluesky" scenario. How are you/anyone else assessing the risk/reward at the current price?

 

The C shares still only trade for 8.5x FCF. And that is before the company has even really started to accelerate the buyback program now that leverage is down to their target post-Scripps deal. Seems to me it should trade for more than that (I suspect 10x might be a ceiling due to the stigma of cable tv, even though I actually think it should trade 12-15x based on the assets).

 

That said, I loaded up in the 20's and recently trimmed it back because it was by far my largest position.

 

Even if streaming simply offsets cord cutting, the per-share FCF should explode over the long term, as it has in the past, because they are so aggressive on the buyback side.

 

Your comment is a long-winded way of saying you think streaming at least offsets cord-cutting, therefore ascribing some value to it, which is what the prior poster was saying.

 

What happens if streaming doesn't take off and DISCA becomes a "Stranded asset" thats in run-off with no future in the streaming world? There is reason to believe that is possible because Netflix at least has been experimenting with more reality TV / true crime documentaries that fall pretty well into DISCA's sweet spot.

 

[peridotcapital]

 

What happens if streaming doesn't take off and DISCA becomes a "Stranded asset" thats in run-off with no future in the streaming world? There is reason to believe that is possible because Netflix at least has been experimenting with more reality TV / true crime documentaries that fall pretty well into DISCA's sweet spot.

 

Well, that's the consensus bearish view and explains why you can buy this at 8.5x trailing FCF, right? I don't see that as a likely outcome, hence I like the stock.

 

Consider that from 2015-2020 cord cutting was real and Netflix increased their streaming subs by 4x from 50 million to 200 million. During that same time period Discovery has taken annual revenue from $6 billion to $12 billion and FCF per share has risen from $1.75 to $4.50.

 

Now, maybe the next 5 years are harder for them than the last five. But I like their track record navigating an ever-changing media landscape and you are not paying up for it at current prices.

[Broeb22]

 

What happens if streaming doesn't take off and DISCA becomes a "Stranded asset" thats in run-off with no future in the streaming world? There is reason to believe that is possible because Netflix at least has been experimenting with more reality TV / true crime documentaries that fall pretty well into DISCA's sweet spot.

 

Well, that's the consensus bearish view and explains why you can buy this at 8.5x trailing FCF, right? I don't see that as a likely outcome, hence I like the stock.

 

Consider that from 2015-2020 cord cutting was real and Netflix increased their streaming subs by 4x from 50 million to 200 million. During that same time period Discovery has taken annual revenue from $6 billion to $12 billion and FCF per share has risen from $1.75 to $4.50.

 

Now, maybe the next 5 years are harder for them than the last five. But I like their track record navigating an ever-changing media landscape and you are not paying up for it at current prices.

 

Let's be intellectually honest here. Revenues doubled because they levered up to buy Scripps.  Also, their FCF per share  (CFO - CapEx + Distributions from Investees - distributions to non-controlling interests) has increased from $1.92 per share to $4.45 on the backs of severely limited content spend. Does it make any sense to believe that Discovery + Scripps which were separately generating $1.3 billion and $650 million, respectively to over $3 billion combined? Do you think they're not milking their current offerings? You can see they reduced their content spend in 2019 by nearly $500 million.

 

Go right ahead and repurchase shares in a melting ice cube.

 

I've owned DISCA in the past. The levered FCF story only works if the business is actually GROWING or at least stable.

 

You're taking a bet on an outcome (streaming) that if you're being honest you have no idea how its going to play out, and you're betting against the power law that seems to be in effect in this industry where 2-3 players will dominate mind and wallet share because they can afford to pay a higher price for content than anyone else because they can amortize it over more subs than the "free radicals" like DISCA could ever dream of.

 

Good luck to you.

[peridotcapital]

 

Let's be intellectually honest here. Revenues doubled because they levered up to buy Scripps.  Also, their FCF per share  (CFO - CapEx + Distributions from Investees - distributions to non-controlling interests) has increased from $1.92 per share to $4.45 on the backs of severely limited content spend. Does it make any sense to believe that Discovery + Scripps which were separately generating $1.3 billion and $650 million, respectively to over $3 billion combined? Do you think they're not milking their current offerings? You can see they reduced their content spend in 2019 by nearly $500 million.

 

Go right ahead and repurchase shares in a melting ice cube.

 

I've owned DISCA in the past. The levered FCF story only works if the business is actually GROWING or at least stable.

 

You're taking a bet on an outcome (streaming) that if you're being honest you have no idea how its going to play out, and you're betting against the power law that seems to be in effect in this industry where 2-3 players will dominate mind and wallet share because they can afford to pay a higher price for content than anyone else because they can amortize it over more subs than the "free radicals" like DISCA could ever dream of.

 

Good luck to you.

 

I think you have summarized the bear thesis well. It comes down to whether this is a melting ice cube or not. For those of us who don't believe it is, the current multiple is quite undemanding, whereas the current valuation won't matter to those who take the other side of the trade.

[dwy000]

 

What happens if streaming doesn't take off and DISCA becomes a "Stranded asset" thats in run-off with no future in the streaming world? There is reason to believe that is possible because Netflix at least has been experimenting with more reality TV / true crime documentaries that fall pretty well into DISCA's sweet spot.

 

Well, that's the consensus bearish view and explains why you can buy this at 8.5x trailing FCF, right? I don't see that as a likely outcome, hence I like the stock.

 

Consider that from 2015-2020 cord cutting was real and Netflix increased their streaming subs by 4x from 50 million to 200 million. During that same time period Discovery has taken annual revenue from $6 billion to $12 billion and FCF per share has risen from $1.75 to $4.50.

 

Now, maybe the next 5 years are harder for them than the last five. But I like their track record navigating an ever-changing media landscape and you are not paying up for it at current prices.

 

Let's be intellectually honest here. Revenues doubled because they levered up to buy Scripps.  Also, their FCF per share  (CFO - CapEx + Distributions from Investees - distributions to non-controlling interests) has increased from $1.92 per share to $4.45 on the backs of severely limited content spend. Does it make any sense to believe that Discovery + Scripps which were separately generating $1.3 billion and $650 million, respectively to over $3 billion combined? Do you think they're not milking their current offerings? You can see they reduced their content spend in 2019 by nearly $500 million.

 

Go right ahead and repurchase shares in a melting ice cube.

 

I've owned DISCA in the past. The levered FCF story only works if the business is actually GROWING or at least stable.

 

You're taking a bet on an outcome (streaming) that if you're being honest you have no idea how its going to play out, and you're betting against the power law that seems to be in effect in this industry where 2-3 players will dominate mind and wallet share because they can afford to pay a higher price for content than anyone else because they can amortize it over more subs than the "free radicals" like DISCA could ever dream of.

 

Good luck to you.

 

Content spend in 2019 was $3.1bn or $200M higher than the $2.9bn in 2018.  Content spend so far in 2020 is down a bit (surprising it wasn't more given they had to shut down production on a bunch of series).  Not sure where you are seeing that they are milking it. 

[Broeb22]

 

Let's be intellectually honest here. Revenues doubled because they levered up to buy Scripps.  Also, their FCF per share  (CFO - CapEx + Distributions from Investees - distributions to non-controlling interests) has increased from $1.92 per share to $4.45 on the backs of severely limited content spend. Does it make any sense to believe that Discovery + Scripps which were separately generating $1.3 billion and $650 million, respectively to over $3 billion combined? Do you think they're not milking their current offerings? You can see they reduced their content spend in 2019 by nearly $500 million.

 

Go right ahead and repurchase shares in a melting ice cube.

 

I've owned DISCA in the past. The levered FCF story only works if the business is actually GROWING or at least stable.

 

You're taking a bet on an outcome (streaming) that if you're being honest you have no idea how its going to play out, and you're betting against the power law that seems to be in effect in this industry where 2-3 players will dominate mind and wallet share because they can afford to pay a higher price for content than anyone else because they can amortize it over more subs than the "free radicals" like DISCA could ever dream of.

 

Good luck to you.

 

I think you have summarized the bear thesis well. It comes down to whether this is a melting ice cube or not. For those of us who don't believe it is, the current multiple is quite undemanding, whereas the current valuation won't matter to those who take the other side of the trade.

 

That's fine that you don't "believe" it is, but what's the evidence that this is not a melting ice cube? And please don't trot out the backward-looking financials as proof of that.

 

If you can share something insightful about how Discovery is making inroads at YouTube TV, Fubo, or other OTT TV bundle providers, then that would be interesting, and might make me question how significantly impacted DISCA's revenues and profits are. 

 

What do you think Discovery+ looks like in 2023? How many subs and how much are they getting paid per sub?

 

Low multiple of FCF is not interesting and buying back stock is only interesting if you can show its likely the business can stabilize. At $45 per share, you're trading at 10x FCF.

What's likely to happen? They buy back $2.5 billion per year the next 5 years at $45 per share? If the EV goes nowhere, the stock price will be like $75 per share, good for a 10.5% return over 5 years.

 

If that's your base case, that's not very exciting. If streaming takes off, and they start valuing DISCA at 15x cash flows, you have a $110 stock in 2025, and a 20% annual return. And if streaming doesn't take off, what do you have? Maybe a 6x multiple of FCF per share, and assuming you could actually buy back $2.5 billion annually in this scenario, the stock goes nowhere. Unless you think the upside is way more likely than the downside, which I don't think anyone with a straight face can say, you're looking at a 10% annual return that you sweat through every single second of.

 

I can make money a lot easier than doing shit like that. 

 

 

[dwy000]

Well I got in averaging about $22 so I'm pretty happy with the inflated price right now.

 

But from your argument you are saying that the downside is the stock goes nowhere.  The base case is a 10.5% annual return for 5 years and the upside case is 20%.

 

Maybe I'm overly cautious and old fashioned but that doesn't sound too bad in a zero interest rate environment.  Certainly relative to everything else being priced off of multiples of inflated 2025 revenue assumptions with negative cash flow.

 

I'm more curious though as to how you can make money much easier than that.  What are you investing in?