ikkyu2 (99.52)

SuperMedia and the Kryptonite

October 26, 2011 – Comments (2) | RELATED TICKERS: SPMD

Recently someone suggested looking at SPMD, as a company that used new tech like QR codes to help businesses do marketing. It seems like a good niche so I took a look.  Here's what I found:  (by the way, the Kryptonite is debt.) Reorg in bankruptcy March 2009, went from $9B to $2.75 B of debt, since then has been paying down some debt every quarter, from $125M to $200M a quarter, most recently with about $2.2B of long term debt.  Market cap $30M, reflecting the improbability of this 4400 employee company ever paying down its debt in any meaningful way.  That's $590,000 in debt per employee.  Imagine telling all your employees that they needed to earn $590K over costs to get their company back to zero.
Last EPS was $5.86 on a share costing only $1.50-$2; but only 15M common shares, total earnings of $96 million, total debt servicing way more than that.
Too bad, because it's a great product and a great business model, marketing new media advertising strategies to small and medium sized businesses; but boy did they overleverage.  Not the kind of stock I like to own, not even 'speculating for a pop' as one of my gentle readers said once.  [more]

Margin of Safety

October 25, 2011 – Comments (12) | RELATED TICKERS: AAPL , AMZN , NFLX

This is a simple concept.   [more]

I Intold You So

October 19, 2011 – Comments (7) | RELATED TICKERS: INTC

In this space, on April 26 and again on August 10th, I told you about Intel - how it was undervalued by cash-adjusted P/E even if it didn't grow earnings at all for the next 5 years.  [more]

9-9-9: Let's think it through

October 17, 2011 – Comments (15)

Someone has to think it through, because Mr Cain certainly hasn't.  Let's look at a few unintended effects of 9-9-9:  [more]

Prescience

October 12, 2011 – Comments (0) | RELATED TICKERS: AAPL

Not quite malice aforethought.  [more]

Don't Underestimate Siri

October 10, 2011 – Comments (1) | RELATED TICKERS: AAPL

I don't mean SIRI, Sirius XM radio.  Feel free to underestimate them all you want.  [more]

RIP Steve Jobs

October 05, 2011 – Comments (12) | RELATED TICKERS: AAPL

One of my heroes has passed away.

So sorry to have been right in my prior post, and right so soon.