Most memorable company event & subsequent share price movement in past 15 years.

[Phaceliacapital]

Hi all,

 

given the amount of experience & time in the market of this board I was wondering if you guys/girls could share one or two examples of extreme share price movements that have astonished you in the past 15 years. Examples could range from Enron to Valeant..

 

Very happy to hear your thoughts!!

 

Thanks.

[Gregmal]

QCOM-1999

Tesla-2013

 

[stahleyp]

I wasn't involved in it (unfortunately) but a lot of folks were involved with Fairfax.

 

A little longer than 15 years ago, but look at a lot of internet stocks. One of the craziest was CMGI (now Moduslink). It goes from $3.50 or so in 1995 to almost 1,400 in 1999 and now around a $1.50 (some reverse splits included).

 

[vox]

The 2013 run-up in Altisource Asset Management Corp (AAMC) is confounding to me.

[doughishere]

porsche/vw short squeeze

 

http://www.nytimes.com/2008/10/30/business/worldbusiness/30iht-norris31.1.17372644.html

[bskptkl]

I know a couple of people on this board owned All American Semiconductor. It was SEMI then SEMIQ after it went bankrupt. It had about $50 million in claims and no assets other than litigation claims. It stopped trading in 2007 - last price was $0.015.

 

They paid a distribution of $5.68 in May of this year and they still have at least a buck a share left and are pursuing more litigation.

 

http://www.dailybusinessreview.com/id=1202766649201/Panasonic-Among-Defendants-in-Antitrust-Suit-Over-Capacitors?mcode=1202617073880&curindex=0&curpage=2

"Meanwhile, AASI Beneficiaries opted out of the class action to pursue its own complaint. The strategy has helped Welt recover more than $100 million in antitrust suits for American Semiconductor's liquidating trust, fully repay principal and interest owed to creditors, and distribute about $25 million to shareholders."

 

So that is the most leveraged bet that I have had pay off - though it took over 10 years and it is not technically a share price movement.

 

The best part of the story though:

 

I had a great friend and colleague named Alex Shaw who died way too young this year in February. SEMIQ was a large holding of his and he was passionate about the case - even going so far as flying to Miami to file a motion in the bankruptcy case to reject the initial Plan of Reorg for trying to extinguishing equity. Within a couple of months of his death, the trust made the distribution. Coincidence? I'd like to think not! RIP Alex.

[flesh]

I haven't been investing as long as most of you but one that really surprised me I owned was TSE. I started buying it in january of 15' at 15/share and for 2.5x NTM fcf. I believe it's at 60 today.

 

I've never found anything else of that size that was so clearly cheap in such an over valued market. It had a lot of debt but on the jan 15 cc the cfo more or less said it would be refied and was at the time at 9.75%.

 

The only reason's I've come up with that it could have been so cheap is high debt, thinly traded as bain still owned 75% (over hang), and lots of one time charges due to split off from bain, closing a facility, and inventory revaluations due to oil based inputs. It was as simple as adding back a number of one time charges and adding in the savings from the refi. Some shorts were discussing it's commodity side of the business suffering in the future, which they were wrong about it turns out, but I valued it at zero and it was still ridiculously cheap. A good portion of the business was cost plus and multi year contracts.

 

Anyways, I'm happy to hear if I missed something critical and am suffering confirmation bias but this one really smacked me on the head. It was so plainly cheap on current metrics (with adj) that I thought I must surely be wrong. I took a 10% position at 15 and made it an 18% position by adding at 18. I didn't make it larger because it seemed too good to be true.

 

It ironic you can be scared because an investment is too good.

 

 

 

[BG2008]

I think General Growth equity post bankruptcy was a 100 bagger for Bill Ackman

 

SL Green trading at under $10/share in 2009 should have been a no brainer for me.  I did the walk of the asset and back into a $400-500/sqft figure for Manhattan retail/office where the market equity was less than $100/sqft.  It was easy to conceive that the equity was anywhere 3-10x of what it should've traded at.  It trades at $107/share today.   

 

Dollar Thrifty - I was not close to this one.  But in 2009, it traded down below $1 per share and then got bought out at $80/share.  The CEO convince lenders that it's worth more as going concern. 

 

Apple - It was a 100 bagger and a company that we all know about and it happened slowly over time

 

Priceline - This one is a bit closer to home, traded to or over $1,000/share in late 90s, crashed to below $10 at one point.  Then did a 100 bagger and now trades at $1,463.  This one is a bit close to home as the original founder went to the same college and I've seen him on campus to give speeches etc. 

 

Valeant - So much smart money and people got it so wrong

 

NYC Multi-family - Had you bought at the peak in 2006, you would've still generated a 10% ROE assuming 20-30% downpayment.  Most multi-family had very strong cashflow and vacancy was not that big of an issue. 

 

[abitofvalue]

In terms of being involved - GGP was a spectacular one... helped pay for my living expenses through business school.. and i still own the HHC spin-off.

 

One's i wasn't involved in -

 

Erbey complex - OCN, AAMC, etc were ridiculous implosions too..

 

Macquarie infrastructure went from $1.XX in 2009 to currently in the $80 range..

 

And of course BRK itself over the $61K in 2003 to $240K currently

 

[BG2008]

In terms of being involved - GGP was a spectacular one... helped pay for my living expenses through business school.. and i still own the HHC spin-off.

 

One's i wasn't involved in -

 

Erbey complex - OCN, AAMC, etc were ridiculous implosions too..

 

Macquarie infrastructure went from $1.XX in 2009 to currently in the $80 range..

 

And of course BRK itself over the $61K in 2003 to $240K currently

 

Was Macquarie Infrastructure at risk of a default back in 2009?  That's quite crazy.  It really forces you think about holding cash for those crazy occasions

[Guest longinvestor]

I think General Growth equity post bankruptcy was a 100 bagger for Bill Ackman

 

SL Green trading at under $10/share in 2009 should have been a no brainer for me.  I did the walk of the asset and back into a $400-500/sqft figure for Manhattan retail/office where the market equity was less than $100/sqft.  It was easy to conceive that the equity was anywhere 3-10x of what it should've traded at.  It trades at $107/share today.   

 

Dollar Thrifty - I was not close to this one.  But in 2009, it traded down below $1 per share and then got bought out at $80/share.  The CEO convince lenders that it's worth more as going concern. 

 

Apple - It was a 100 bagger and a company that we all know about and it happened slowly over time

 

Priceline - This one is a bit closer to home, traded to or over $1,000/share in late 90s, crashed to below $10 at one point.  Then did a 100 bagger and now trades at $1,463.  This one is a bit close to home as the original founder went to the same college and I've seen him on campus to give speeches etc. 

 

Valeant - So much smart money and people got it so wrong

 

NYC Multi-family - Had you bought at the peak in 2006, you would've still generated a 10% ROE assuming 20-30% downpayment.  Most multi-family had very strong cashflow and vacancy was not that big of an issue.

 

Ah yes. I bought PCLN at $3 and sold at $10 (in 2001, going by memory). Next time I checked it was $1000, 10 years later. I bought because I and several friends bought all of our flight tickets through PCLN during the late 90's! Got some great deals. Why did I buy and sell the stock? No clue.

[Gamecock-YT]

[matjone]

Oddballstocks blog has turned up a few.  CASA is one I always bring up in these kinds of threads.  They had a lot of underperforming restaurants during the recession and were in the midst of turning it around.  At the time he wrote it up I think it was around 1x earnings if you annualized the latest results.  At the low the market cap of the whole company, which owned 50 restaurants, was less than the startup costs to franchise one restaurant.  They ended up getting bought out for about 20x the low price.  This one stings because I saw it and almost invested but decided not to. 

 

He also had randall bearings, which I think was a 10 bagger and a few others.  Maybe he'll chime in.

 

I had a good return on jadason in singapore.  It was fairly speculative as a business but was at like 10% of ncav or something at the low.    I've found that stocks with really low prices, in the single digit cents, tend to have more volatility which can sometimes provide opportunities.  It think jadason went from .006 to .045 or something like that.  Sitestar was another example of this.

[BargainValueHunter]

Syncora Holdings 2016

 

Sears Holdings 2006 to 2016

 

Priceline 2002 to 2016

 

Apple 2001 to 2015

 

Lehman Brothers 2006 to 2008

[Phaceliacapital]

Thanks that's some great info guys!

[Guest Schwab711]

Bear Stearns was bought out for $2 and then it was raised to $10 a week later. It was my first introduction to finance and it was incredible to watch in real time.

[LC]

The 2013 run-up in Altisource Asset Management Corp (AAMC) is confounding to me.

 

Coufounding how? They had a residual-like (high multiple) revenue model based on Ocwen's portfolio, which was growing like crazy at the time as they bought the MSRs from all the banks post-2009. I can see how it became valuable over time if you assumed (as most did) that Ocwen/Erby were just good, salt-of-the-earth, capitalists.

[vox]

The 2013 run-up in Altisource Asset Management Corp (AAMC) is confounding to me.

 

Coufounding how? They had a residual-like (high multiple) revenue model based on Ocwen's portfolio, which was growing like crazy at the time as they bought the MSRs from all the banks post-2009. I can see how it became valuable over time if you assumed (as most did) that Ocwen/Erby were just good, salt-of-the-earth, capitalists.

 

Confounding in the way that any stock is that returns in excess of 1,000% in the year after its IPO. The company's market cap almost doubled in Q4 with no news or discernible change in the forecast. If you have a spreadsheet or valuation write-up that justified a price in excess of $500 per share, I'd love to see it.

[LC]

The 2013 run-up in Altisource Asset Management Corp (AAMC) is confounding to me.

 

Coufounding how? They had a residual-like (high multiple) revenue model based on Ocwen's portfolio, which was growing like crazy at the time as they bought the MSRs from all the banks post-2009. I can see how it became valuable over time if you assumed (as most did) that Ocwen/Erby were just good, salt-of-the-earth, capitalists.

 

Confounding in the way that any stock is that returns in excess of 1,000% in the year after its IPO. The company's market cap almost doubled in Q4 with no news or discernible change in the forecast. If you have a spreadsheet or valuation write-up that justified a price in excess of $500 per share, I'd love to see it.

 

There used to be a write up here: https://glennchan.wordpress.com/

 

but i think the site is down. otherwise i would go back to the ocwen thread as i think it was discussed quite a bit back then, if my memory serves

[LC]

Here is a google cache version:

 

https://webcache.googleusercontent.com/search?q=cache:N-DwIeLG9ucJ:https://glennchan.wordpress.com/2014/08/07/altisource-recap/+&cd=2&hl=en&ct=clnk&gl=us

[bobp]

What's memorable to me about the JPM Bear stearns merger is that it was announced at $2 as if it was done - "JPM buys Bear for $2." It immediately started trading around $2 and it still had to be voted on. JPM eventually paid about $10 a share. The move from 2 to 10 was a great move.

Of course if I owned Bear prior to that, 2 to 10 wouldn't be such a big deal.

 

[vox]

The 2013 run-up in Altisource Asset Management Corp (AAMC) is confounding to me.

 

Coufounding how? They had a residual-like (high multiple) revenue model based on Ocwen's portfolio, which was growing like crazy at the time as they bought the MSRs from all the banks post-2009. I can see how it became valuable over time if you assumed (as most did) that Ocwen/Erby were just good, salt-of-the-earth, capitalists.

 

Confounding in the way that any stock is that returns in excess of 1,000% in the year after its IPO. The company's market cap almost doubled in Q4 with no news or discernible change in the forecast. If you have a spreadsheet or valuation write-up that justified a price in excess of $500 per share, I'd love to see it.

 

There used to be a write up here: https://glennchan.wordpress.com/

 

but i think the site is down. otherwise i would go back to the ocwen thread as i think it was discussed quite a bit back then, if my memory serves

 

My comment was on AAMC, not ASPS.

[thepupil]

Agree that AAMC is a spectacular cautionary tale. I tried to short it after the run-up and lost a little then tried again and made a little, then watched in glee as it collapsed, but the benefits were solely psychic as I had not the cajones to short it on the way down.

 

Here is a smart sounding short thesis @ $98, which lost about 1100% at peak

https://www.valueinvestorsclub.com/idea/Altisource_Asset_Management/88060

 

Here is the COBF thread

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/aamc-altisource-asset-management/

[kfh227]

The turn around that I thought would never work even though I saw the news at the time that they were modifying their business plan:

 

Pier 1 imports

 

https://www.google.com/finance?chdnp=0&chdd=1&chds=0&chdv=1&chvs=Logarithmic&chdeh=0&chfdeh=0&chdet=1377288000000&chddm=445345&chls=IntervalBasedLine&q=NYSE:PIR&ntsp=0&ei=2udrWJjZM429e83Rr9AM

 

A low of 11 cents and high of $20 on the run up.  Anyone that threw a couple grand at it is likely very happy today!

[paologorgo]

I had a great friend and colleague named Alex Shaw who died way too young this year in February. SEMIQ was a large holding of his and he was passionate about the case - even going so far as flying to Miami to file a motion in the bankruptcy case to reject the initial Plan of Reorg for trying to extinguishing equity. Within a couple of months of his death, the trust made the distribution. Coincidence? I'd like to think not! RIP Alex.

 

I remember Alex telling me about buying a cheap suit to appear in court - not his usual outfit.

 

RIP, Alex

 

PS: I just remembered him in an EQIX related article I wrote. His research on that stock was also outstanding.