by Travis Johnson, Stock Gumshoe | April 3, 2014 3:39 pm
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Source URL: https://www.stockgumshoe.com/2014/04/whitney-tilson-my-favorite-ideas/
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Sort of an anniversary for me. It was 11 months ago, (May) that I wrote my first column for Gumshoe and featured REEDS Ginger Brews that I dubbed a “potential Monster Beverage” and I still think that possibility exists. It has doubled and recently pulled back offering a new entry point. Since I did not know whether the Gumshoe readership was mostly mainstream or “healthy food and beverage oriented” I offered SODA stream as an alternative even though I personally would not buy the product. Hope somebody made money on those original recommendations.
YOU ARE LUCKY YOU COULDNT BUY.
QCOR BUY OUT.
Whitney Tilson talked twice, for a total of about four hours (he’s a hedge fund manager and one of the cofounders of the Congress, and I like his work a lot), so there was a lot to think about in his presentations — he made relatively brief short arguments about 3D Systems (DDD) and Questcor (QCOR) that were pretty convincing (overvaluation and hype at DDD, fraud at QCOR), and if I were to assume that everything everyone said at today’s presentations was accurate and verifiable then the absolute first thing I would jump into would be a short position in QCOR (probably buying puts actually, at least six months out to give time for regulatory action and preferably further out than that), but I won’t do that right away because I’m writing about these ideas for you.
Indeed — very often the fact that I am slow and poky in doing my due diligence (and have trading restrictions regarding timing) usually works out pretty well for me. Forced patience is often a good thing. I meant it when I said, “if all this is right” QCOR is a no brainer short — and the same goes now for the merger, which should either fall apart or transfer huge risk to MNK IF the short argument, particularly from Citron, is correct. I don’t know if the shorts are right or not, but the FDA is still investigating their promotional practices and should presumably also be checking on their formulation.
This is a potential stink bomb of a merger — the only real gain comes from the tax arbitrage with an Irish company buying a US one to move offshore and cut taxes, but the risks still seem pretty high with the ongoing investigations and the huge short interest. Sometimes shorts are wrong, sure, but they are putting their asses on the line much more than longs are and they often make extremely well-researched articles. I’m quite pleased to not have skin in this game, but it is interesting to watch.