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ESI: A Liquidity Crisis Has Arrived (Finally), As Regulatory and Litigation Tail Risk Looms Large, Taking Price Target...

September 19th, 2014

For several years now we have argued that ESI needed to raise capital to position the company to meet its contingent liabilities related to guarantee payments on private student loan portfolios and...

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Z: Cuts to Featured Listings for Premier Agents Suggest Zillow’s Advertising Inventory Problems Could Be Escalating...

September 5th, 2014

Approximately two months ago we published a report backed by a review of more than 2,000 listings in 50+ markets on Zillow (“Z: Look at the Listings, the Zillow Ecosystem Might Not Be What You...

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ZU: Blue Nile Redux? Another False TAM Story with a Broken Business Model, Time to Get Short with a Price Objective of...

August 28th, 2014

“We offer consumers a very different way to shop. Its a much better experience than they get in a store environment, I will take you through that today. But, what consumers are getting is a much...

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Z: When You’re Trying to Change the Narrative Why Let the Details Get in the Way of a Good Story - The Truth about...

August 6th, 2014

Now it’s starting to make sense.  Now we understand why Zillow agreed to pay $3.5B for a company which by almost every measure is 2nd or 3rd rate in the listings aggregation space.  Now we are...

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ESI: It Finally Has Come to This – Who Is the Lender of Last Resort? Lowering Price Target to $5

August 3rd, 2014

“In the process of taking his jacket off, the Artiste [Harry Zale] thrust his thick chest forward. Running down it were a pair of suspenders. They were broad and black, these suspenders, and even at the other end of...

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WWE: De-Risking the Story as the Company Evolves Into a “Free Cash Flow Compounder”

July 31st, 2014

When we think about the path in shares of WWE over the past 6-9 months, the perception of the company went from mature to explosive growth to mismanaged to what we think now is a compelling “free cash flow compounder” – all...

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WWE: Tempering Expectations on Network Subs, While Cost Cuts Come Into Focus

July 30th, 2014

Tomorrow WWE will report its 2Q14 operating results. While the magnitude of operating losses in the quarter will be of some degree of importance, for now everyone will likely be focused on one thing – the total number of subscribers to the...

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For-Profit EDU: The Career College Crisis of Summer 2014; Checks Suggest Continued Weakness in Fundamentals – Where...

July 28th, 2014

“The cheaters usually get caught--just never soon enough. Plenty more heads will roll.” Anonymous executive in the for-profit education space Given our longstanding bearish stance on...

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Z/TRLA: What Is and What Might Never Be – Views from 400 Agents on Zillow, Trulia, and Housing

July 24th, 2014

We recognize that there are rumors in the market that Zillow could be in talks to acquire Trulia.  We will have more extensive comments shortly, but we wanted to provide you with some insight on what the agent community...

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Z: Look at the Listings, the Zillow Ecosystem Might Not Be What You Think It Is – the Fallacies of the Bull Case

June 30th, 2014

“You can observe a lot by watching”-          Yogi BerraAs Zillow shares climb to levels we previously never thought possible (amazingly in the absence of any material new news) we have spent...

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ESI: In a Shock to No One PEAKS Is Finally Being Consolidated, Now ESI Attempts to Thread the Needle on Financial...

June 25th, 2014

In a surprise to no one at this point, ESI disclosed in an 8-K filing yesterday that the company’s Audit Committee in concert with the SEC Office of the Chief Accountant determined that the...

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MCRS: Closing Out Short Idea with a Loss of (-41.3%), Alpha Generation of 5.8%

June 23rd, 2014

“Oracle is focused, focused like a laser on one goal over the next few years: becoming the number one company in Cloud computing's two most profitable segments: software-as-a-service, SaaS; and platform-as-a-service, PaaS.” · Larry...

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OPEN: Closing Out OPEN Short Idea With a (-19.7%) Loss, Alpha Generation of +48.7%

June 13th, 2014

It would be easy for us to simply dismiss PCLN’s proposed acquisition of OPEN for $103/share as an irrational bid and nothing more than another chilling sign of Internet bubble 2.0, but in no way would that approach improve our...

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ESI: What Is the Value of a Higher Education Company with Private Student Loan Default Rates in Excess of 75%?

May 22nd, 2014

Rather than give you our usual initial diatribe, we’re going to present you with some quotes from ESI management over the past few years...

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MCRS and OPEN: Market Share Losses and Cannibalization of TAM Are Accelerating

May 21st, 2014

Yesterday we had the opportunity to tour the floor at the National Restaurant Association’s 2014 annual conference.  We wanted to pass along some key observations from our time in the exhibit hall.  As you might imagine given our...

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WWE: A 1.7x Mark to Market Isn’t the Problem, Elevated Network Spending and Epically Poor Communication Is

May 16th, 2014

“Just when they think they have the answers, I change the questions”Roddy PiperNo quote could better encapsulate the impact that the company’s press release on the renewal of its domestic TV rights fees...

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WWE: Framing Expectations Ahead of the Domestic TV Rights Fees Announcement

May 15th, 2014

“Well that escalated quickly…”Ron Burgundy, AnchormanIn what is likely to serve merely an appetizer for the main course of volatility that WWE shares are about to dole out over the next two trading days the stock witnessed a 10% intraday...

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ESI: College Portfolio Buyer Agrees to Purchase a Real Estate Portfolio From ESI, Wait Who?

May 14th, 2014

After the close today, ESI announced that the company has reached an agreement with College Portfolio Buyer LLC for a sale leaseback transaction.  College Portfolio Buyer will purchase 24 ITT Tech locations for approximately...

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Z: Is Zillow Becoming a Pricing Story? That’s Not Necessarily a Good Thing

May 8th, 2014

Was it good enough? Time and time again that was the question we were attempting to answer in our conversations with investors after Zillow reported 1Q14 results and provided initial 2Q14 guidance yesterday.  The trading action after hours...

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OPEN: Deceleration in Cover Volume and Continued Restaurant Share Losses Pose Problems

May 2nd, 2014

In what surely has become an alarming trend for bulls on the stock, OPEN MISSED consensus revenue expectations for the fourth time in five quarters.  We cannot think of another situation where a growth company so consistently fell...

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MCRS: Three Reasons Why Investors Should Question the Quality of 3Q14 Upside – XP, Tax Rate, and Record Capitalized...

May 2nd, 2014

For the past 6-9 months we’ve been screaming from the mountain tops (or this molehill depending on your perspective) that much of MCRS’s recent revenue growth has been largely a function of...

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TRLA: What Happened Here? Where’s the Earnings Leverage? 66,700 Subs and Not Making Money…

April 29th, 2014

Make no mistake, TRLA is a stock that trades ENTIRELY off of operating metrics and relative valuation.  For now, there are enough investors willing to value the company off price/revenue multiples so long as TRLA delivers...

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For-Profit EDU: Don’t Expect to See Any “Greenshoots” In the Space This Spring

April 23rd, 2014

Here we are on the eve of another earning season in the for-profit education space and it appears that all of the challenging trends the group faced for the Winter term still remained firmly entrenched during the Spring enrollment...

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ESI: Desperate Times Call for Desperate Measures… ESI Attempts to Access the Only Source of Incremental Capital It...

April 11th, 2014

For more than a year now, we have been arguing that ESI might need to raise capital to shore up its liquidity position in light of the company’s deteriorating operating fundamentals and...

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Z: Eight (Reasons) Is Enough, Time to Get Short with a Price Objective of $55

April 8th, 2014

In the context of what has transpired in the broader Internet space over the past two weeks, Zillow shareholders have to be feeling pretty good about themselves, or at the very least quite fortunate.  After all, the 8-10% sell-off in Z...

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WWE: Expectations Gone Awry? Come for the Rights Fees, Stay for the Network

April 7th, 2014

Heading into the release of initial subscriber numbers for the WWE Network our greatest fear was that the company would have a major technical issue with the video feed during Wrestlemania.  That did not happen and for the most part, the event...

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WWE: As We Move Beyond “Proof of Concept” for the Network the Second Phase of Growth Comes Into Focus, Raising...

March 31st, 2014

Was it really only 6-months ago that WWE shares were languishing at multi-year lows and trading 100-200,000 shares a day?  My how things have changed.  In a mere 180 days, WWE shares have now...

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MCRS/ING.PA: Highlights from Southeastern Acquirers Association Conference

March 27th, 2014

Earlier this week we had the opportunity to attend the Southeastern Acquirers Association annual conference.  The event was largely attended by merchant acquirers, ISO’s, and hardware providers in the payment processing industry.  While we...

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ESI: PEAKS Losses Inform Investors as Much about the Present as the Past; Lowering Estimates Due to Reduced Starts...

March 25th, 2014

It what has become standard practice for ESI, the company filed an 8-K last Friday after the market close which delivered more unfavorable news.   If bulls are to be believed the latest development...

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MCRS: The Investor Day Was a “Schnoozer” and That’s a Good Thing for Shorts

February 21st, 2014

Stasis is MCRS’s best asset.  That’s our grand takeaway from the company’s investor day. Otherwise, we can’t help but wonder how bulls on the stock feel about the company’s growth prospects and management team.  Those who were...

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Current Ideas

ATGE

SHORT

$15

AYI

SHORT

$108

HCG.TO

SHORT

$0

RON.TO

SHORT

$9

BIG

SHORT

$28

ESI

SHORT

$0

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

ING.PA

SHORT

$35

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

BCO

LONG

$35

WWE

LONG

$25

KNL

PAIR - LONG KNL/SHORT MLHR

25%

XOXO

LONG

$20

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

ARC

LONG

$12.50

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR