Posts tagged Gold Prices
The market continued to rise today on volume lighter than Ben Bernanke’s private sector experience and even lighter than ad sales for the proposed reality TV show tentatively titled “Two and a Half Men” where Hank Paulson, Paul Krugman, and Robert Reich will live in a house and try to solve the economy’s problems using only their wits and empty cans of Pabst Blue Ribbon.
With the year coming to an end (and Money McBags only hopes the end it is coming to is Stacy Keibler‘s) and the Northeast snowstorm still keeping investors out of the office, there was less action today than in Abe Vigoda‘s pants. The lack of news did give Money McBags some time to ponder if gold is in a bubble as it bangs against 2 week highs (yes, but the bubble isn’t popping anytime soon), if Bennie B.’s hail mary QE2 will be followed by a bigger hail mary QE3 (actually, of course it will, so not much to ponder), and how humans are intelligent enough to come up with something as awesome as this doubly-true anagram and yet if left to their own devices will often devolve into playing real life games of Frogger (and Money McBags has no answer for this).
We truly live in a bizarre, dynamic, and quickly changing world and given the unpredictable nature of mankind (and womankind, though this is the kind of woman Money McBags would predict), it is important to realize that the unexpected could happen at any moment. Given that, relying on past data and historical periods as a guide is becoming less telling than Andy Dick at a military recruitment office (though don’t ask, don’t tell was finally repealed, soon to be replaced simply with “get the fuck out”). So be careful with your portfolios in the New Year as macro data remains sluggish to assawful while the market remains manipulatedly up, because things could change at the cock of a trigger (as opposed to the cock of this Trigger).
There was literally no macro data out today so Money McBags was left reading this Bloomberg expose on corporations using tax free cash for both acquisitions and to make sure they have enough lipstick for rainbow parties. Money McBags commented on this a few months ago, but companies are able to use strategies with nicknames such “the Killer B”, “the Deadly D,” and “the Burning P,” to push their profits to low tax domiciles such as the Netherlands, the Bahamas, and Lindsay Lohan‘s pants. Companies devote enormous resources to sheltering this money from the government which creates jobs for auditors, tax accountants, and other professions that create no value. Money McBags is 100% for simplyfing the tax codes, but he is also 100% for “Pantsless Mondays” so take that for what it is worth.
In the market, private equity firm Leonard Green wants private BJ’s as apparently public BJ’s leads to performance anxiety. Green has threatened a hostile takeover to get BJs (a move known in married life as “foreplay”) if the company does not put itself up for auction in the next few weeks. This will be the third retail take over for Leonard Green partners in short time, having also been involved in the take-outs of J. Crew and Jo-Ann Stores, as they try to top tick consumer spend.
The only other market news is that Sears is set to stream movies and thus take on NFLX in a business move that makes less sense than the Governor of New Mexico wasting his time on determining if he should pardon Billy the Kid and even less sense than the Tourettes syndrome ALF episode. Seriously, this is just fucking bizarre as it is so far outside of Sears’ main competency (which is poorly running shitty stores with crap merchandise in rundown geographies) that Money McBags is more speechless than he was at the prospect of a Brooklyn Decker nip slip pic (and if the lighting is just right, and you crane your neck at a 48 degree angle while shouting Beetlejuice three times, you can almost see it). When asked why they were pursuing this business, Sears management said they chose this opportunity because their algorithm for internet search to take on GOOG is still months away, their book reader to take on Kindle still has some kinks, and the models they hired to open up a competitor to Hooters just weren’t up to par. This is one of the strangest business decisions Money McBags has ever read, and it will likely fail faster than a Palin in a spelling bee, but why the fuck not? It’s not like they have anything else working.
In small cap news, DTLK continues to creep up and Money McBags broke them down after their last Q as a kind of interesting little company for a short term trade. More interestingly, STVI continues to go apeshit after this Bloomberg article on them last week that claims they are adding 50k users a week and are the top dating app on the facebook (though Money McBags would never know because the facebook still won’t recognize him as a caring, feeling, individual, so he’ll have to take them at their word).
It’s certainly an interesting company, kind of like the facebook LOV (and Money McBags broke down LOV in February when it was trading at the same price as it is now and said it wasn’t a buy) as they run the Areyouinterested dating application (and if the dating application involves Rachael Taylor, then Money McBags is more than interested) which got a whopping 1.9 out of 5 stars on the facebook fan page, so um, yeah. Anyway, they have been experiencing rapid growth since they switched to the subscription model last year. In Q3, they grew the top line 113% y/y and 35% sequentially which is certainly exciting (though not quite as exciting as a taint tickle from Sarai Givaty) and on their $1.7MM of revenue they manged to earn a whopping $0.00 EPS (and yes, Money McBags realizes that as a start-up-ish growth company there is an investment phase, so current earnings are mostly irrelevant).
What is interesting is that now that they have moved to a subscription based model, their cost of advertising has rocketed up from nothing to $800k this last Q and will likely continue to move up since Alexis Texas has more barriers to entry than their business does. The stock is obviously overvalued on any current metric (trading at a Bernankity times earnings and 15x revenue), but Money McBags isn’t quite sure how to model out revenue.
They claim to have had ~25MM downloads but they only had ~$1.7MM in revenue this last Q which equals ~$.07 per user and that just seems cockposterously wrong. Obviously not all 25MM downloads are active but for the love of Riley Steele, Money McBags can’t find out what their monthly subscription fee is, seriously, google it for yourself and let Money McBags know what you find. All Money McBags knows is that they claim to be adding ~50k users a day (more than Match.com’s 20k per day and probably more than Dickflash.com’s 20 sexual offenders per day) which would give them ~1.5MM new users a month (assuming no attrition which is a terrible fucking assumption, but lets play best case scenario here) and 4.5MM a quarter. At $.07 per sub per Q, that is an additional $300k revenue per Q, which is ok, but not preposterous valuation ok. Now obviously that $.07 per sub is fucking wrong and obviously they are going to have some kind of attrition, but Money McBags just has no ability to forecast this company until he can at least try to get a better handle on the drivers of revenue (and since they were nice enough not to include subscription or attrition numbers in their Q, Money McBags is more out in the cold than a marginally NSFW Alaskan beaver).
The point is, Money McBags wanted to mention this little company because it is flying higher than John Belushi at the Chateau Marmont, but in his first pass through the company, Money McBags just doesn’t have enough information to make an intelligent decision. The revenue potential seems spurious, and Money McBags hates their seeming lack of a competitive advantage and their zero leverage with the facebook, but he does like their growth, their already decent sized network, and Melissa Giraldo’s bikini (which has nothing to do with STVI, but it is delightful). So watch as this stock gets pumped right now like Dick Bove’s ego at an ABA conference and try to do some homework because when it falls back down, there could be something here (shit, there could be something here now, but Money McBags just doesn’t have the data to even begin to hazard a guess as to future revenue). Money McBags just finds this shit interesting and thought he would pass it on to his readers.
Writer’s Note: Yeah, today’s headline sucked, but fucking A is it hard to write one when shit isn’t happening. And yes, yesterday’s headline sucked too as Money McBags was going to go with “Falling Consumer Confidence Causes Retail Sales to Rise, Next Up, Kathy Bates to Cause Boners” but that just seemed too juvenile. He will try to do better, but really, this shit ain’t easy on a daily basis (anyone hear that tiny violin playing?).