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MCRS: As MCRS Continues to Lose Share, a Sequence of Short Term Gains Could Create Longer Term Pain

September 27th, 2013

The purpose of this report is to address several critical questions surrounding MCRS and the company’s future growth prospects. In general, we would argue that most of these queries aren’t part of the general...

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WWE: Navigating the Pathway to $200MM in EBITDA, Taking Our Price Target to $19

September 18th, 2013

It’s not every day that the CEO of a publicly traded company offers us the opportunity to put him in a “hammerlock” if the company does not achieve its stated financial objectives.    WWE management has expressed an incredible...

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COCO: Hanging on By a Thread While the Challenges Continue to Mount

August 29th, 2013

We watched the stock price action in COCO over the past two weeks with considerable befuddlement and consternation. After all, the stock rallied more than 25% following the announcement that the Department of Education had preliminarily sided with the...

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MCRS: After a Year of Zero Growth, Are Shareholders Any Better Off Than They Were 12-Months Ago? Analyzing the Marriott...

August 22nd, 2013

“Hope is a dangerous thing.  Hope can drive a man insane.”Morgan Freeman (Red), Shawshank RedemptionWe are not alone in this.  There’s no shortage of short sellers who lament the action in...

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WPO: The Irrational Bid Scenario Now Comes Into Play and Catalysts Are Limited, Closing Out Our Short Idea With a...

August 6th, 2013

This is something we obviously did not see coming, but based on the action in WPO shares over the past 6-months perhaps someone else did.  In retrospect, we should have given greater attention to...

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OPEN: Hope Increasingly Creeping Into the Bull Case

August 1st, 2013

In another market environment things might be different.  Marking the fifth time in the past three years, OPEN missed consensus revenue expectations for 2Q13.  On top of that, the company lowered guidance for FY13 substantially.  Panic? Not exactly.  Had the...

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OPEN: Acquisition of Rezbook - OPEN Dominance or More IACI Incompetence? Probably a Bit of Both, Margin Impact Could be...

August 1st, 2013

In what can only be described as a surprise to the marketplace, OPEN announced that it had reached an agreement to acquire IACI’s Rezbook. As part of the deal Urbanspoon, a leading mobile...

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TRLA: 2Q13 Had More Signposts of Our Short Thesis Then You Might Think, Desktop User Growth is Collapsing – Canary in...

August 1st, 2013

“There’s a party going on right here, a celebration to last through the years….”Kool & the GangIn retrospect it all seems so simple doesn’t it? Let’s play a short game of check this...

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ESI: Robbing Peter to Pay Paul in a Race to the Bottom

July 26th, 2013

In a vacuum, there might be legitimate cause for excitement.  After 11 consecutive quarters during which ESI reported a YOY decline in new student starts the company was finally able to identify an elixir to its enrollment woes – aggressive tuition discounting...

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For-Profit EDU: Just When You Think You Have All of the Answers, We Change the Questions; Feedback from Privately Held...

July 24th, 2013

“And you all know how the story go….Not bad meaning bad but bad meaning good…”-          Run-DMCWith all due respect to Monsieurs Simmons, McDaniels, and Mizell we doubt that they...

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OPEN: YELP’s Acquisition of SeatMe Could Herald the Start of a New Era in the North American ERB Space

July 19th, 2013

And so it begins….Two and a half years ago we introduced OPEN as a short idea predicated on four principal tenets: At its core, OPEN provides a “solution without a problem”.  OPEN’s ERB technology and...

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For-Profit EDU: Has a New Legal Precedent Been Established For Institutions? A Recent CECO Case Warrants Closer...

June 19th, 2013

Earlier this week, the American Arbitration Association ruled on a dispute between a former student of CECO’s California School of Culinary Arts (since rebranded the Le Cordon Bleu College of...

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ESI: The Latest 90/10 Compliance Strategy/”Work Around” – Charter Schools and Free Associate’s Degrees

June 12th, 2013

In a move that received little fanfare this past February, ESI’s board of directors established a short term element to the company’s compensation policy for senior management that could be payable in...

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TRLA: All Listings Aggregators Are Not Created Equal, Time to Get Short

June 7th, 2013

It seems to happen all of the time in growth industries, particularly among small and mid-cap companies.  A leader in said growth industry goes public, creates a successful track record, which engenders investor enthusiasm about the company and...

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MCRS and OPEN: Thoughts From the NRA Show 2013 – Tablet POS Systems Continue to Come of Age as Competitive Headwinds...

May 21st, 2013

Yesterday we had the opportunity to tour the floor at the National Restaurant Association’s 2013 annual conference.  We wanted to pass along some key observations from our time in the exhibit...

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XOXO: Optionality Remains Compelling but Execution Still Needs to Improve, Raising Price Objective to $15

May 12th, 2013

For a long time we lamented the lack of “appreciation” among investors for the strength of XOXO’s key franchises, the company’s robust free cash flow prospects, and the tremendous growth potential of its...

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Z: With Few Catalysts on the Horizon, We’re Closing Out Our Long Z Idea With a 72% Gain

May 7th, 2013

Almost a year to the day from when we first introduced Z as a long idea, we’re closing it out with a 72% gain.  It’s been a wild ride to say the least.  Was it really only 6-months ago when the stock ticked $23.00 following...

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OPEN: As Sales Force Productivity Collapses a Few Critical Questions to Ponder; 10-Q Highlights and Observations

May 7th, 2013

Seriously, who wouldn’t love this business?  In 4Q12, OPEN’s growth in diners seated per restaurant collapsed, but the company had healthy net additions in restaurant clients, stability in NA cover...

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OPEN: Four Reasons Why OPEN’s Profitability Prospects in Europe Remain Grim

May 2nd, 2013

A few weeks ago we published a lengthy report which outlined some of the more troubling competitive developments for OPEN in North America. We maintain our view that the company is on the cusp of a major deceleration in many of its key...

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ESI: The Absurdity of Reported “Earnings” As FCF Collapses and Balance Sheet (Off and On) Obligations Loom Large

April 26th, 2013

How much are 400-600 ITT Tech students worth?  In a report in which we will outline some of the critical questions surrounding ESI, this is the question we have been pondering all day.  Afterall, it...

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MCRS: As the Company Runs out of “Arrows in the Quiver”, Bulls Are Left to Wonder What Catalysts Remain as Secular...

April 25th, 2013

When we initially introduced MCRS as a short idea roughly 8-months ago, here were the principal tenets of our thesis: The elimination of the hardware “tether” could result in rapid share gains...

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OPEN: As Competitive Undercurrents Take Hold in North America When Will Investors Start to Take Notice?

April 12th, 2013

It’s true, OPEN shares are up 55.6% over the past 12-months with the stock witnessing gains of nearly 22% in the past 3-months alone.  The short interest, which once represented close to 50% of the float has now...

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WWE: As More Meat Is Added to the Bone on the Network Front Positive Developments in the Core Remain Overlooked

March 5th, 2013

In the 18-months that we have been recommending going Long shares of WWE, we have been highly critical of management’s reluctance to provide investors with the company’s general operating and financial...

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ESI: 10-K Highlights – the SEC Subpoena Is Not the Sole Cause for Concern

February 25th, 2013

We have little doubt that among the kernels of information included in ESI’s 2012 10-K filing that the disclosure of the subpoena from the SEC will receive the greatest attention – as it should.  However, for anyone who has followed the...

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Z: 20% of the Traffic (and growing) and Less Than 1% of the Spend; Zillow’s TAM Story Gets Better and Better

February 14th, 2013

Didn’t we go through the same experience last quarter?  Zillow beat revenue and EPS for 4Q12, operating metrics were stellar, and management guided lower in large part due to increased expectations for...

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OPEN: Growth Is Grinding To a Halt…. And TopTable Isn’t Going to Save the Day

February 8th, 2013

Well at least they didn’t miss consensus revenue estimates again….  Seriously though, do you remember the “good old days” when supposed growth companies that reported a massive deceleration in operating metrics, low quality...

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WWE: Is the WWE About to Go “Over the Top” With its Potential Network?

February 5th, 2013

WWE shares have advanced 7.8% thus far this year compared to a 6.0% gain for the S&P 500.  Despite the solid stock price performance to start the year, we doubt that many WWE investors are taking “victory laps”.  After all, in the...

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COCO: With $200MM Left to Go, Things Could Be Coming to a Head

January 31st, 2013

Despite all of the levers the company has pulled (cohort default rate “management”, asset sales, off-loading student loan credit risk temporarily, sale lease backs) over the past two years, it finally appears that COCO is starting to run out of...

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MCRS: Not Much to See Here…. For Now

January 25th, 2013

MCRS reported a quarter that was as uneventful as it was uninspiring. Ultimately there were operating metrics that improved somewhat and those that could be construed as confirmation of our short thesis.  Below we discuss the key positives and negatives from the quarter.

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ESI: And So It Begins…. What Do You Believe?

January 25th, 2013

Who said volatility is dead?  In a day that will go down in infamy for ESI investors, the stock traded in an astounding 40%+ range today.  After gaping down in excess of 20% in early trading ESI shares rebounded over the course of the day to close up 17.7% - efficient...

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