Live Nation has various business lines associated with live music and live events. They are pursuing a strategy of vertical integration, trying to find synergies between the various parts of their business. On the concerts business side, the vertical integration strategy has been tried multiple times with little success. Will this time be any different? John Malone seems to think so. Liberty Media has been buying more Live Nation shares.
Let’s start with an overview of the ticketing industry.
Gurufocus is a website that presents historical financial data in one giant table. You can use Google Sheets to pull that data into a spreadsheet and perform your own calculations. This is much faster than going into a 10-K to copy+paste the financial data. Here is my spreadsheet that automatically pulls data from Gurufocus. (EDIT 9/9/2017: unfortunately the spreadsheet does not work very well anymore due to changes to the Gurufocus website.) To use it, sign in to your Google account (registration is free) and then make a copy of the spreadsheet.
According to a VPNA (Valeant Pharmaceuticals North America) invoice to R&O, invoices are due in 30 days. See Exhibit E from VPNA’s counterclaim*.
According to the same counterclaim against R&O, “[…] R&O had 45 days in which to pay for the Valeant medications”. See page 9 of “VRX Counterclaim.pdf” available here.
So is it 30 or 45? If it is 30, then VPNA may lose a lot of credibility in court. As well, the timing affects the timeline of events. R&O (or Philidor?) stopped sending out drugs on August 31, the same day that Russell Reitz’s lawyer wrote a scathing letter to Isolani. From the VPNA version of events, August 31 is 45+1 days after the last payment was received from R&O. If VPNA’s credit terms are 30 days, then it is curious that the company continued to send drugs to R&O (or Philidor?) even after its credit terms were breached. Recall that VPNA’s own Exhibit E states “TERMS: Due in 30 Days”.
EDIT (11/4/2015): This post has been edited extensively because I didn’t realize that the example invoice from my original post was from VPNA’s own counterclaim.
Somewhere around July 27, 2015, Isolani became aware that Russell Reitz was withholding reimbursement checks from R&O’s accounts. You might think that this would force the business to halt operations. An Isolani court filing (page 8) against Reitz states:
As a result of Reitz’s and R&O’s material breaches of the MSA, Isolani will be forced to shut down operations at the Pharmacy within the next 10 days.
In fact, operations did not shut down. Documents filed with the court suggest that Philidor continued to ship out drugs on R&O’s behalf until August 31, 2015.
I find this very strange. Why send out drugs when it is highly uncertain as to whether or not your company will be paid?
(KXM is an illiquid Canadian stock with a market cap of $26M.)
Kingsway Financial’s plan:
The incumbents’ plan:
Valeant has a reputation for significantly increasing the prices of its drugs. The truth is a little more complex than that.
Through its so-called “specialty pharmacy” channel, Valeant engages in an unusual practice of sending drugs to consumers without a guarantee of receiving insurance reimbursement from private payors. If the reimbursement claim is ultimately denied, Valeant ends up selling a drug at firesale prices.
(KXM is an illiquid Canadian stock with a market cap of $26M.)
Kobex’s liquidation value is in the ballpark of 70 cents/share and currently trades at 55 cents/share.
Kingsway Financial Services is going activist on Kobex Capital. This makes me like the stock a little more as the catalyst of activism should raise the internal rate of return on a position in the stock. However, I’m a little wary of activist investing mainly because management teams often like to fight activists with shareholder money. The legal fees and any severance payments will likely reduce the value that’s left for shareholders.
Residential solar makes little sense compared to larger forms of solar energy such as utility-scale solar (building solar farms in non-urban areas) and commercial solar (solar panels on the roof of commercial buildings). The economics are inferior for various reasons:
Larger scale solar projects have inherent advantages over residential solar.
I previously described AAMC as a “royalty on yield chasing“. AAMC’s economics can potentially be extremely attractive because asset managers can generate extremely high returns on capital. Currently, the stock is trading at very depressed levels. Two explanations for the share price:
Kenneth Peak is the former CEO of Contango Oil & Gas (MCF) who passed away in 2013. Here is a collection of investor presentations that were taken down from the contango.com website:
Ken Peak MCF presentations (36MB Zip file on Dropbox)
Glenn Chan's Random Notes on Investing 