Moody's Corp (MCO)

Number1CramerFan

Comment on this one? Sorry...not in the Mood.

thanks t&d

Politicians are looking for a culprit for the subprime mess. The rating agencies come in handy. MCO could become the Arthur Andersen of the Credit Rating industry.

Beat up by bad press but still trusted.

Beaten down too far. A wide moat and a deep team. They will recover.

I don't like veiled deceptive things.. What Warren Buffet did shows the integrity, that Moody's offers.. Remember: How do you tell when a politician is lying? When they are talking..

Have a blessed day!

David Einhorn of Greenlight Capital has come out publicly to say that he's shorting MCO. The reason is simple: information is beginning to come out that Moody's has been pumping its ratings of CDOs and CMBSs for years, and may in fact still be doing so. Warren Buffet has been unloading shares as well. I'm going with the guys who spend much more time following this one. Underperform for the foreseeable future.

Moody's accused of issuing inflated ratings: report
On Wednesday September 23, 2009, 3:07 am EDT
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(Reuters) - A former analyst with Moody's Corp (NYSE:MCO - News) has accused the credit ratings agency of issuing inflated ratings, and has taken his concerns to U.S. congressional investigators, the Wall Street Journal reported on Wednesday.

In a letter dated July, obtained by the paper, Eric Kolchinsky accused Moody's Investor Service of issuing a high rating to a complicated debt security in January, in spite of it being aware it was planning to downgrade assets backing the securities.

"Moody's issued an opinion which was known to be wrong," Kolchinsky wrote, along with detailing other instances of inflated ratings issuance, according to the paper.

The paper said a Moody's spokesman declined to comment on the January rating under scrutiny, but had said Kolchinsky refused to cooperate with an investigation into the issues he raised, and was suspended with pay.

Kolchinsky is scheduled to testify on ratings firm reform before the House Committee on Oversight and Government Reform on Thursday, the paper said.

Moody's was not available to comment.

(Reporting by Biswarup Gooptu in Bangalore; Editing by Dan Lalor and Chris Wickham)

Their role in the financial meltdown will come to light & the company will (& should) be punished.

Continued legal battles will deter investors.
There's a growing consensus that rating agencies are worthless, reflecting the interest of Wallstreet rather than the true evaluation of an asset.
Stay away from this one until the water settles.

Legal problems and lack of confidence.

http://seekingalpha.com/article/161133-einhorn-expands-ratings-agency-shorts-with-mcgraw-hill

While David Einhorn's short position in Moody's (MCO) is by no means new information, we did recently learn that his hedge fund Greenlight Capital is now also short McGraw Hill (MHP), the parent company of fellow ratings agency Standard & Poor's. He initiated the position after a U.S. judge refused to dismiss a case against the ratings agencies. Those agencies were seeking refuge from such litigation under the notion that their opinions on ratings are protected by free-speech rights. This U.S. District Judge's refusal to throw out the case could be a landmark ruling, Einhorn says. While this could potentially be a chink in the armor, it is also prudent to point out that 10 of the 11 claims were dismissed; a fact that Moody's representatives have been quick to point out.

Einhorn presented his short position in Moody's back at the Ira Sohn Conference where numerous hedge fund managers shared investment ideas. While we can't track their short positions via SEC filings, we have covered Greenlight's long portfolio here. Greenlight was up 16.3% for the second quarter and year to date for 2009 is up 21.5%. For more of Einhorn's tirades shorting companies, we highly recommend reading his book Fooling Some of the People All of the Time: A Long Short Story. In it, you'll learn how Greenlight constructs and researches investment theses. Not to mention, it's just an interesting read and story in general.

It's about time! http://www.moneymorning.com/2009/09/11/credit-rating-firm-lawsuit/

Death of the golden goose. --

Moodys = MCO
Look at the company
They got half their earnings from structured products.
Moving forward this is GONE.

Their huuuuuge premium built into the shares was because the company had a golden goose laying golden eggs all over the place.
There were only a few of these golden gooses.

Unfortunately for MCO, the current management has poisoned their golden goose. Credibility was the name of this goose.
Buffett has been mourning this tragic loss -

When you look at what is left....there is nothing. The goose has provided all the operational side of the business.

Management already dumped all their assets and took on huge amounts of debt to buy back bloated shares (at a price that was counting on the goose to live a long healthy life.)

The debt payments are going to continue to come....but unfortunately they have run out of golden eggs to sell to cover these incoming payments.

Add the uncertainty and cost and time of litigation ----- who in the world is buying this bloated crap ?
Maybe someone initiating a squeeze...but that is dangerous ground in my opinion.

There is no value here. Only an albatross of debt and calamity.

Can someone give me a single reason to buy this equity at this current valuation ?

I would love to hear some reasoning.

If you are delusional enough to want to own credit rating agencies...why would you ever buy MCO -vs- MHP....which has assets, a semi-competent management team, and a much more broad and diversified operational business.

MCO is the one short I have held from the $32 range.
All my other in the money puts - I take off when I get profits

These are hedges -vs- my 80% long portfolio which consists of stocks that trade at rational valuations relative to all the things that MCO lacks.

MCO has a liquidation value of around -$5 per share not counting any of this litigation, diminished credibility, and rapidly decreasing prospects for future revenues (let alone earnings)

Massive debt, loss of economic moat, unethical-untrustworthy-incompetent management, and now litigation out their ears.

I ask you again - what reason would you want to own this security ?

Give me a few reasons. I have given you plenty of mine for betting against this company.

(note - hedged some puts with at the money calls - and bought mhp calls for further hedging of this short position)

MCO does not have a lot of upside at the current price, but there is a MASSIVE downside if they are found liable for the AAA bond rating for SIVs and other asset backed securities. So far it looks like it is a distinct possibility.

Bye, bye you POS. Hope some of your criminals, I mean employees, get to see the inside of a jail cell for a couple decades. DON'T DROP THE SOAP or someone Rate you AAA, which will be doing credible research then you did!

"No longer able to hide behind the 1st Amendment, you will be sued until you are gone, gone, GONE!
Perhaps the Oracle of Omaha was right in starting to get out of Dodge with his MCO position, after he sold 8 million shares in mid-July, and noting that he very well may continue selling his remaining 40 million share stake. David Einhorn clarifies why."

http://www.zerohedge.com/article/david-einhorn-discusses-why-endgame-rating-agencies-may-be-close

Buffett selling more shares

Einhorn shorting. rating service is worthless