Liberty Posted July 1, 2011 Author Share Posted July 1, 2011 Liberty: Yes, I did listen to that. And I share your feelings about cultural differences. Since you're interested, you may want to go to the facebook page and look for his response to someone's claim that he does the charity work for the tax benefit. His response is kind of funny. I just found that. Interesting response. He mentions Buffett, and he did mention him before too. I suspect that the reason he's holding to his 4 million shares with a cost average 'in the single cents' is because he wants to keep compounding and eventually pull a Buffett (donate billions). But I have no evidence for this except his apparent love for philanthropy and the fact that he seems to think of Buffett as a model. Link to comment Share on other sites More sharing options...
Liberty Posted July 1, 2011 Author Share Posted July 1, 2011 I wonder if they're hiring the new salespeople because they're spending so much cash on buybacks, and because valuations are now higher than in the past few years, making acquisitions harder to justify. EBIX has almost always acquired to gain access to customers (not so much for the technology or people, apparently). Maybe now they figure it's easier to get new customers directly than through other companies... Or maybe they'll just keep doing both. Edit: Also, from a 2008 conf call, Robin talking about criteria for acquisitions: I must answer that question a bit more clearly. Anytime we look at an acquisition, we don't even make an acquisition just because they have lots of profits. I will put it the other way around. Buying of a company is a big decision, you got to understand, one has to kind of thoroughly understand – my first criteria in this company is if we are looking at an acquisition does this give us a chance to become a dominant player in the next 2 to 3 years? If the answer is no, we will not enter that business. It's as simple as that. That's the first criteria. The second criteria after that is cutting cash flows. The third criteria after that is what are the synergies that we can put in place? Where is it going to lead us? What is the customer base they have? Is that a customer base that we want to have? And how does it fit in, is the technology similar to us? Or if they have – sometimes they might have old technology that we want to replace. We feel that we have the current technology that can just fit in and maybe we can get more revenues from the same customer. So it's a rather more complicated answer. We are far from the stage where we will just buy a company just because they have tax losses, meaning, at least in my time, that’s not going to happen in Ebix. We are not going to make decisions just based on trying to make the financial work right. We are a futuristic company. We want to make decisions that will help us not only in the short term but in the long term and also give us something – some dominance in some market if we're going to make that acquisition. Link to comment Share on other sites More sharing options...
twacowfca Posted July 2, 2011 Share Posted July 2, 2011 I've been curious for a while about EBIX and, in particular, CEO Robin Raina. I'm having trouble sleeping tonight so I'm going to write up a few observations. If you do a web-search for Raina you get all sorts of hits regarding his path to riches, his charity work and (lately) his role in producing the documentary film "Delli", which is currently enjoying some critical acclaim. I also found an obscure third-party account of him stepping in to break up a fight at charity concert he was holding for his foundation. I have a strong aversion to gushing sentiment about public figures, so I find most of the articles written about Raina to be hard to swallow. To my cynical ears, most interviews with him make him seem self-obsessed and immodestly modest. Basically every article portrays this man as some type of Mother Theresa / Howard Stark hybrid. His interviews are full of epithets and cliches regarding charity and poverty, with a lot of talk about why he became involved in charitable work and how it goes hand-in-hand with business. If you look at the webpage of his eponymous charitable foundation, you'll find much more of the same, along with plenty of pictures of Robin and more gushing sentiment from various Indian celebrities. The page is very out of date and you wonder if it's still active. The Copperfield report questioned the scope of the Robin Raina Foundation, claiming that his charity was vastly overstated. Based on the picture I was developing of Raina, I was quick to let my cynicism take over and also question the scope and motivations of his charity. But earlier today I came across his personal Facebook page. It's now clear to me that he is either one of the greatest charlatans of our time, or he truly is a tireless advocate for the poor and an ardent supporter of "compassionate capitalism". I think the man may simply be one of those guys who essentially never sleeps and keeps his fingers in every slice of pie... making EBIX a bit of a one-man-show as far as management is concerned. I'm even half-convinced that he writes all the press releases for EBIX. (Has anyone else ever noticed the poor grammar and numerous typos/errors?) I don't think this is good for the company. Just an observation. You can find his Facebook page for yourselves if you're interested, but below I've copied one exchange that I think is somewhat illuminating. A user questions the logic behind the Foundation's home-building project, and Robin's response is either 100% fraud or 115% human. I hope it's the latter, and I applaud him for what the RRF has done in either case. (The Facebook page is *far* more impressive than the official RRF website.) Question posed: I may not be getting the whole story here: a significant number of people were displaced because of an upcoming sporting event so to help these people you are giving away 6000 homes to them. Would it not have been better to have made a real estate development company, tooken out a loan, put those underpriviledgred people to work and rented the homes giving them work at the same time by making them building it. In that, you'd also be training them and giving them a skill they can then go on to improve thier own fortunes with. The way to fight to fight poverty as you have stated u want to do is to give people control over their own finanical well being. not giving them hand outs and charitable donations. ~Commercialism over charity." Robin's reponse: Good thoughts but not practical. We looked at all kinds of possibilities before starting this project to build 6000 free homes for them. The people in Bawana are civic citizens like you and me are. They are equally hardworking and at times a lot more hard working than most of us. They work 14 hour days to earn a living. Most of them are already construction workers. Some of them work as day laborers already to build these homes that we are building. They own the land that the houses are being built on. A construction worker makes Rs. 180 ($4 per day) on the day that he/she gets any work - that does not allow that person to pay for his family's well being or food leave aside any rents. These folks feel the same like you and I do - the intense cold in winters, the rainy season and the extreme heat in Delhi - all mandate that a citizen of Delhi at least has shelter. They have the same desire to identity and self respect like all of us - but we have the opportunities and they don't. There are no homes in Bawana (whatever is available would cost more than 60% of their monthly income) to rent and they cannot afford it anyways. Each one of them owned their own piece of land, given for Rs. 7000 ($150) by the Government, to be paid in installments over 7 years. They cannot leave that piece of land and go elsewhere - so they built grass huts and lived in inhuman conditions, with fires happening every other week causing innumerable deaths. The houses had to be built on their land. As regards their vocational training for occupation, of course we run multiple training centers to train them in all kind of areas so that they can have a future. They are taught embroidery, textile design, candle making, stitching, crafts, computer training, equipment repair, makeup, hair saloon training etc. in addition to being trained on healthcare, fighting any violence, bank handling etc. We also offer micro-credit finance for them to start their own occupations/business. We demand that for them to have a home built by us they commit to putting all their kids in schools in the area. We also run schools with breakfast,lunch, clothing, healthcare etc for their kids. Charity is a complete cycle that feeds on providing a whole set of related services not just money.We understand that!! Life in the slums is a bit more complex than you can imagine - complex situations need complex solutions - ground realities are different from what people imagine without stepping in into these slums. I am a big believer in compassionate capitalism and believe in creating institutions that can feed on themselves. Having a home is something that you and me take for granted - these people need at least a shelter over their heads and that is what we are doing. The foundation's main focus is education and a bight future for the underprivileged children but if they did not have a home, they keep moving like nomads with no permanent education for their kids. That has changed with permanent housing and their kids actually go to school in one place now and have a shot at a decent future where they can be like all of us and stand on their own feet. Thanks for your thoughts. In our business, we use the principles of Kaizen, especially as developed by Toyota. One of the pillars of the Toyota system is: Go see for yourself. In other words, don't rely only on secondhand reports when a situation seems cloudy. We don't have a horse in this race, but there might be enough interest among some of the board members from India to go see for yourself. A good place to start might be By taking a walk about the the Bawana area of Delhi, speaking to people without being hosted by the Raina Foundation. Any thoughts? Link to comment Share on other sites More sharing options...
mankap Posted July 2, 2011 Share Posted July 2, 2011 I am a sponsor of education of a child through Robin Raina Foundation for last 4 years.I am in touch with the staff and child who are being educated in the schools run by Robin Raina Foundation in Bawana.I get regular reports and feedback from the school.I know other people also who are part of the RRF as sponsors and volunteers. I can tell you I have not seen anything in last 4 years which will point to any wrong doing. I find Copperfield's comment on exaggeration of activities by RRF a total lie.I think Copperfield was pointing the np. of houses being built by RRF. RRF claims that they have built 1150 homes for $2000 each at total cost of $2.5m.These homes are not homes as you see in the US.They are one room apartments.You can build them for $2000 in India.There is lot of volunteer labor involved in the building of these homes. I know people who went to a event in Atlanta that RRF organized to raise money for his charity.I can remember 2-3 different events that were held in Atlanta for his charity. I heard from the people who went to the event that there was chaos in the begining as the singers arrived late for the event.Robin Raina was on the stage trying to calm down the crowd.He organized a auction of cricket bat and other stuff of ex captain of Indian team in Atlanta for his charity .Most of the stuff was bought by Robin Raina himself when there were no other bids. Link to comment Share on other sites More sharing options...
twacowfca Posted July 3, 2011 Share Posted July 3, 2011 I am a sponsor of education of a child through Robin Raina Foundation for last 4 years.I am in touch with the staff and child who are being educated in the schools run by Robin Raina Foundation in Bawana.I get regular reports and feedback from the school.I know other people also who are part of the RRF as sponsors and volunteers. I can tell you I have not seen anything in last 4 years which will point to any wrong doing. I find Copperfield's comment on exaggeration of activities by RRF a total lie.I think Copperfield was pointing the np. of houses being built by RRF. RRF claims that they have built 1150 homes for $2000 each at total cost of $2.5m.These homes are not homes as you see in the US.They are one room apartments.You can build them for $2000 in India.There is lot of volunteer labor involved in the building of these homes. I know people who went to a event in Atlanta that RRF organized to raise money for his charity.I can remember 2-3 different events that were held in Atlanta for his charity. I heard from the people who went to the event that there was chaos in the begining as the singers arrived late for the event.Robin Raina was on the stage trying to calm down the crowd.He organized a auction of cricket bat and other stuff of ex captain of Indian team in Atlanta for his charity .Most of the stuff was bought by Robin Raina himself when there were no other bids. RR may be a little manic, but this account doesn't seem like it describes someone who is a phony. Our family has been involved personally hands on and as financial supporters with organizations that drill pure water wells and build small but adequate houses in poor countries. $2000.00 is about right for the direct cost of such houses with volunteer labor. :) Interestingly, for those with an East India heritage, the robust US hand pump we used to use for pure water wells in Central America cost $2,500. About six years ago, we replaced it with a comparable pump manufactured in India that cost only $750. So far, the Indian pump seems to be holding up about as well as the US pump. :) Link to comment Share on other sites More sharing options...
smo001 Posted July 6, 2011 Share Posted July 6, 2011 Impressive http://www.sec.gov/Archives/edgar/data/814549/000095012311064100/c19673e8vk.htm Link to comment Share on other sites More sharing options...
mankap Posted July 6, 2011 Share Posted July 6, 2011 The news is really impressive considering Ebix bought 414,000 shares in 3 trading days.There were 3 trading days between June 30 and July5. They have a long way to go to use their $100m shares. I can see a short squeeze happening.There are around 12 m shares shorted. With $100m buyback happening at such a fast speed it is not long before shorts will start covering. Link to comment Share on other sites More sharing options...
Liberty Posted July 7, 2011 Author Share Posted July 7, 2011 Thanks smo001. Good to see they aren't using a spoon for the buybacks. 7.9m / 414k = average price of around $19. Another thing we need to remember is that EBIX can play this game for a long time. They generate a lot of cash and have HIGHLY recurring sources of revenue. Once the 100m is gone, if share are still cheap they'll just keep going. Link to comment Share on other sites More sharing options...
OracleofCarolina Posted July 8, 2011 Share Posted July 8, 2011 Insurance premiums to GDP ratio was 2.8% in 2010, lowest in 30 years..should be a good sector to invest in for a patient investor Link to comment Share on other sites More sharing options...
Liberty Posted July 8, 2011 Author Share Posted July 8, 2011 Insurance premiums to GDP ratio was 2.8% in 2010, lowest in 30 years..should be a good sector to invest in for a patient investor Just curious: Do you have a good source for these kinds of statistics? I find them here and there, but was wondering if maybe there's a more systematic way to track it.. Thx. Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2011 Author Share Posted July 13, 2011 Someone messing with EBIX stock again today. Quite a free fall, though didn't last long (probably triggered massive buybacks). Link to comment Share on other sites More sharing options...
given2invest Posted July 13, 2011 Share Posted July 13, 2011 Lasting longer than you thought... Wonder what the rumor/report is? Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2011 Author Share Posted July 13, 2011 Lasting longer than you thought... Wonder what the rumor/report is? Yeah, looks like maybe they ran out of buybacks for the day (I think they are limited to a certain volume daily). I haven't yet found any article or rumor that could have caused this.. Keeping an eye open. Link to comment Share on other sites More sharing options...
DCG Posted July 13, 2011 Share Posted July 13, 2011 Quite a free fall, though didn't last long (probably triggered massive buybacks). Seems to be at its lowest point of the day. Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2011 Author Share Posted July 13, 2011 Quite a free fall, though didn't last long (probably triggered massive buybacks). Seems to be at its lowest point of the day. Yeah, I wrote my comment above just after the 10:56 drop and rebound. But obviously that wasn't the end of it... Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2011 Author Share Posted July 13, 2011 Could this be the reason? http://finance.minyanville.com/minyanville/news/read?GUID=18890654 Maybe. I doubt it, because it's not really new and there's been a few of those in the past few months, but who knows? If I had to guess - knowing how much resources the shorts fighting this one seem to have - I'd say that they waited for a quiet day with low volume and sold a few massive blocks of stocks, hoping that it would drop enough to feed on itself (triggering panic among all the chartists and momentum people, stop-loss orders, etc). It probably would have been much worse if EBIX wasn't aggressively doing buybacks... But it's just a guess. Link to comment Share on other sites More sharing options...
abcd Posted July 13, 2011 Share Posted July 13, 2011 Yeah. You are right. That news is too old to make a difference, today. Your thoughts, as you say, may be a guess but is logical. Link to comment Share on other sites More sharing options...
mankap Posted July 13, 2011 Share Posted July 13, 2011 The pattern I have seen is , first there is very high volume of puts traded and then the stock drops.Today 4000 put contracts were traded for July expiry expiring on Friday.High Put volume forces the market maker to hedge with shorting of the shares .The market maker can do naked shorting to hedge his position. The shorts trigger the stop orders which aggravate the stock drop. Has anybody seen similar pattern with any other company . Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2011 Author Share Posted July 13, 2011 Wouldn't it be machiavellian if the end game of the big player(s) shorting EBIX was actually to be long on the stock? First you destroy share price and make some money on the way down by shorting it, then when it's really low, you load up and stop the shorting tricks and ride it back up. No evidence that this is what it is, but that would be a doable - if improbable - evil plan, I think... Edit: Some stuff about put contracts (I'm a noob with options though, so I'm not sure what it all means exactly): http://www.benzinga.com/options/11/07/1763026/options-brief-ebix http://www.theoptionsinsider.com/unusualactivity/?id=7379 Link to comment Share on other sites More sharing options...
Liberty Posted July 15, 2011 Author Share Posted July 15, 2011 It's probably because I've listened to 30+ hours of his conference call recordings, but I can read Robin's facebook entries in his voice in my head. That's a strange feeling. In the middle of last night he posted: If you repeat the slogan "COWS CAN FLY" again and again consistently with a PR message and put money power behind it, people actually start believing that cows can fly. Integrity, truth and honesty are now seen as things of the past. Greed and the lucre of gold has blinded people completely. I am one of those who still believes that truth, honesty, and integrity always FINALLY wins. Am I nuts to think like that? (and btw, to the EBIX skeptics, I am NOT submitting the above as evidence that Robin is honest. I'm very aware that a sociopath could have posted the same thing, so spare me the snark please) Link to comment Share on other sites More sharing options...
Liberty Posted July 15, 2011 Author Share Posted July 15, 2011 Press release: http://www.ebix.com/pressrelease_text.aspx?artid=203 Q2 2011 Earning Results: The Company plans to release its 2011-second quarter earnings results on August 9th 2011 and will host a conference call to review the results at 11:00 a.m. EDT the same day (details below). Strong Cash Growth in Q2 2011: The Company also announced strong growth in cash during the second quarter of 2011 in the approximate amount of $19.7 million. The Company started the second quarter with $35.6 million of cash. In the second quarter of 2011, the Company paid approximately $23.8 million in cash for stock buybacks, $6.8 million in cash to Rennes Foundation for retiring a convertible note, $1.67 million in cash to Bank of America towards debt reduction, $0.6 million in cash towards earn outs, and 0.7 million in cash towards non-operating acquisition related severances. After paying approximately $33.5 million in cash in Q2 of 2011 towards non-operating activities, the Company ‘s cash balance as of 30th June 2011 was approximately $23.8 million. Changed Forecast on Taxes: The Company announced that it is revising its forecasted effective tax rate to increase to 16-20% between now and the 2013. The Company’s changed forecast is driven by its decision to release its entire valuation allowance in Q2 of 2011, based on the projected certainty of its future income; and the Company’s strategic decision to centralize its international development & IP operations in Singapore. Under Ebix’s agreement with the Singapore Government, the Company has been given a perpetual tax rate of 10% with no sunset date attached to that rate. While the Company intends to continue growing its offshore development operations in India, the Company intends to do so while centralizing all international development activities in Singapore. The Company believes that Singapore is a more strategic choice as an international headquarters because of its overall political and economic stability, besides its innovation friendly policies. Since the Company has net operating loss carry forwards of $ 65.8 million in the United States, any income tax expense is expected to be largely a non-cash expense until the net operating loss carry forwards are utilized. Future Earnings Outlook: The Company believes that the momentum being experienced in its sales activities, coupled with its recent decision to increase its sales staffing considerably, is expected to allow Ebix to continue to grow its EPS consistently, in spite of the increased tax forecast. Link to comment Share on other sites More sharing options...
Liberty Posted July 18, 2011 Author Share Posted July 18, 2011 http://www.marketwatch.com/story/ebix-announces-addition-of-certain-large-distributors-and-insurance-companies-to-ebixexchange-2011-07-18?reflink=MW_news_stmp The Company reported that as of July 8, 2011 it has purchased a total of 1,908,873 shares of Ebix common stock from the open markets, for a total sum of $37,902,606 in the year 2011. The Company confirmed that it continues to maintain its share buyback plan in accordance with Rule 10b-18 of the Securities Exchange Act of 1934. While neither the Company nor any of its officers or directors has purchased any shares since July 8, 2011, the Company intends to continue repurchases going forward. Link to comment Share on other sites More sharing options...
mankap Posted July 18, 2011 Share Posted July 18, 2011 It is kind of Unprecedented buying 5% of the shares outstanding in 6 months.They could end up buying another 4 m with the money left.That would be 15% buyback of the shares in year. Robin is not giving up and will give a good fight to shorts. Copperfield had targeted another company OCZ .They failed and OCZ is now trading at near all time high.Copperfield and its buddies must be feeling lot of pain from OCZ short. Link to comment Share on other sites More sharing options...
Liberty Posted July 29, 2011 Author Share Posted July 29, 2011 Rather long and detailed interview with Robin published today: http://www.fool.com/investing/general/2011/07/29/ebixs-ceo-chats-with-the-fool.aspx On buybacks: As regards dividends, at this point nothing is ruled out. Let us wait and watch. One thing is pretty clear: that the Board has committed to purchasing $100 million of Ebix stock from the open markets and retiring that stock. Once Ebix has purchased $75 million or more of its stock, I intend to recommend to the Board to increase the purchase authorization to $160 million from $100 million. We are buying our own stock because we see this as an accretive transaction for our shareholders, and because we see this as buying stock in a company that is producing 40% or more in operating margins, and is still trading at rather low cash multiples. We are not buying the stock because we want to support our stock price or drive the shorts out. That would be knee-jerk, or rather short-term, thinking, and we prefer to think about our shareholders' interests in the long term. Link to comment Share on other sites More sharing options...
mankap Posted July 30, 2011 Share Posted July 30, 2011 That is like buying back more than 20% of the outstanding. He also said that their pipeline for acquisition is full and interest rates are very low. I thing if they find right opportunity at right price , Ebix will use debt for acquisition. Link to comment Share on other sites More sharing options...
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