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2014 Investment Idea Performance Update: AVERAGE Alpha Generation per Idea since Inception of 4.1%, 28.8% AVERAGE Alpha...

December 31st, 2014

First and foremost we wanted to wish everyone a happy, healthy, and prosperous new year and thank you for your continued interest in our research.  2014 will be remembered as a Dickens-esque year at...

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Reminder: Please Take the PAA Research 2014 Client Survey

December 12th, 2014

As you know, we love to conduct surveys. We're interested in learning more about how our clients utilize our service and ways in which we can improve the research offering and enhance client satisfaction.  Please click on the link below to take the survey....

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ZU: Does ZU Have an Inventory Problem? 40,000+ SKU’s of “Ready to Ship” Items Might Be Sitting in Their...

December 11th, 2014

“We operate a minimal inventory, intermediary model where we typically take customer orders before we purchase inventory from our vendors”-          ZU S-1 filing 11/13/13Much like NILE...

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Please Take the 2014 PAA Research Client Survey!

December 9th, 2014

As you know, we love to conduct surveys. We're interested in learning more about how our clients utilize our service and ways in which we can improve the research offering and enhance client satisfaction.  Please click on the link below to take the survey.  It should...

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ESI: The Lender of Last Resort Comes a Knockin’; The Stock RALLIES 30%+ Even As Bankruptcy Risk Increases, Follow the...

December 5th, 2014

“On November 17, 2014, we obtained a commitment from Cerberus Business Finance, LLC to provide us with a new $100 million senior secured term loan facility”-          ESI 2Q14 10-Q...

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DV: “History Doesn’t Repeat Itself, but It Often Rhymes”; DV’s Golden Goose Is About to Get Squeezed, Time to...

November 20th, 2014

This oft quoted aphorism (incorrectly attributed to Twain) represents one of the greatest truisms for any seasoned investor: the ability to identify trends and map them to historical patterns is a...

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Z: You Know About the 4Q14 Outlook, Here’s What Should Concern You More – This Company is More Levered to Traffic...

November 6th, 2014

“That was a mistake….Look deep, Josh. It’s there.  It’s moves away, but it’s there.  You’ve got him….. Don’t move until you see it.” Ben Kingsley, Searching for Bobby...

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ZU: Deceleration Takes Root amidst Growing Signs of Customer Fatigue, Taking Target to $15

November 4th, 2014

Approximately two months ago we introduced ZU as a short idea.  As a reminder here’s the original elements of our short thesis:Cracks have started to emerge recently, but we think revenue, gross margin, and profitability...

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Z/CSGP: Can Rentals Save the Zillow Narrative? Don’t Count On It; CSGP Increasingly Looks Like a “Leap of...

October 31st, 2014

“…the long-term opportunity for Rentals, we look at competitors in the rental space kind of pure play what they call ILSs or Internet Listing Sites, Internet Listing Services and we see a couple...

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WWE: Concerns Surrounding Network Churn Overshadow What Should Be the Bigger Story – OIBDA and Cash Flow

October 30th, 2014

Heading into WWE’s 3Q14 earnings release here’s what we said about how the stock might react to the Network subscriber number (all else being equal):“Here’s how we think the stock COULD trade based on a...

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WWE: Framing Expectations Heading Into 3Q14 Earnings; The Bar Has Been Lowered More Than You Might Think

October 28th, 2014

In the context of the volatility in WWE shares thus far this year, the 20% trading range for the stock over the past three months can only be described as tranquil.  Perhaps more importantly the relative amount of...

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ESI: A Temporary Reprieve from, but Likely Not a Full Resolution of the Company’s Liquidity Woes

October 17th, 2014

There’s a well-known adage in this business that the “highs are never as high as the lows are low”.  No truer statement could be made about our feelings on our short call on ESI today even with ESI shares down 72%...

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ESI: All That Matters Are Starts and Cash, Both of Which Appear to Be In Increasingly Short Supply; ESI Needs to Raise...

October 16th, 2014

From our perspective, the long awaited filing of ESI’s 2013 10-K was as notable for what was NOT in the document as for what was.  After all, at this stage the only two data points that truly...

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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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Current Ideas

CTC

SHORT

$101

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