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Diogenes

@WallStCynic

Apr 20

$CVNA OMG

(2) $CVNA burned $800M in cash BEFORE any inventory (and related payables) build. Wow.

(3) And this disclosure related to the announced $CVNA offerings seems to imply the banks walked away from financing the deal directly. Still, $3.3B of net new debt/pfd being added.

Read 6 tweets

Diogenes

@WallStCynic

Apr 19

Over 5 pts of $IBM total revenues from $KD. Less than 3% revenue growth without. Software revs up less than 4%, ex-KD. FCF only $1.2B. Financial engineering at its finest.

(2) Also they once again recast (lower) 1Q 2021 Software Revenue (from $5,317M to $5,138M), which added another 3 pts of “growth” for Software this quarter, with the stroke of their magic $IBM accounting pen. Same old, same old.

(3) Put another way, $IBM software revenues grew 8.6% vs the pro forma 1Q Software division revenues restated post the $KD-spin($5,772 vs $5,317M), of which Kyndryl represented “over 8 pts”. So ex the spin and two restatements, non-affiliated software really didn’t grow in the Q.

Read 7 tweets

Diogenes

@WallStCynic

Mar 29

A year ago, at $10 per share, $AMC had a total enterprise value of $11.0B ($4.7B market value + $6.3B in net liabilities, ex-leases). The 2022 EBITDA estimate then was $540M, or 20x next year’s EBITDA. Expensive, but not crazy.

(2) Today at $29, $AMC has a TEV of $20.7B ($15.2B + $5.5B), or 33X the 2023 EBITDA estimate of $630M. That’s getting crazy, given it still means AMC will be unprofitable through 2025.

(3) As a sanity check, Cinemark ($CNK) has a TEV of $4.7B ($2.1B + $2.7B), or only 7x its estimated 2023 EBITDA of $640M!

Read 4 tweets

Diogenes

@WallStCynic

Mar 4

Those of you who follow fintech ($AFRM, $SOFI, $SQ, $UPST, etc) know how important Cross River Bank in NJ is to the entire industry. They are the actual bank that makes and securitizes most of the fintech-originated loans.

(2) And some of you know that Cross River is under Congressional (and probably regulatory) scrutiny for a disproportionate amount of fraud in the PPP lending program.

@nytimes

(3) But I bet few know that Cross River’s founder was previously the CFO of pre-GFC mortgage originator First Meridian Mortgage. Why is this important? (Via @nytimes)

Read 4 tweets

Diogenes

@WallStCynic

Feb 19

@andrewrsorkin

Peloton’s New C.E.O. on the Tough Road Ahead ⁦@andrewrsorkin⁩ nytimes.com/2022/02/19/bus…

(2) If this former CFO truly believes that the “monthly churn is less than one percent”, then $PTON shareholders are still going to be unpleasantly surprised going forward.

(3) It is very clear from $PTON’s definition of churn, that they basically use a simple average of net Connected Fitness cancellations divided by total current subscriptions. Digital subs are not in this calculation. Anyone see the basic problem here?

Read 6 tweets

Diogenes

@WallStCynic

Oct 22, 2021

The $IBM “Free Cash Flow” Myth: Free Cash Flow is one of the few metrics that $IBM gives guidance for. In FY it was $10.8B after deducting proceeds from receivable sales($4.3B).

(2) Here is $IBM’s actual future “guidance” from its recent Analyst Day. Note that they do not provide earnings guidance, “adjusted” or otherwise.

(3) But let’s take a closer look at $IBM’s FY 2020 cash flow statement, as management clearly wants investors to capitalize their “free cash flow” stream.

Read 7 tweets

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