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An Oily Deal
2 days ago
Showing posts with label David Einhorn. Show all posts
Showing posts with label David Einhorn. Show all posts
Friday, September 11, 2009
Monday, November 10, 2008
Allied Capital finally cuts its dividend
Oh yes. Allied Capital (ALD) finally announced that the pyramid scheme (they don't use that term) has finally stopped growing, and they've cut the dividend. The stock is down $3.18 to $4.12 (for the non-financially savvy, when the amount of the decline is similar to the remaining price of the stock, it's called "a very bad day").
David Einhorn was absolutely right, people. He wrote a book about it (i.e. how ALD was a fraud) a while ago. It's time for the Allied apologists (one of whom I did a post on earlier) to admit that they were some combination of stupid and dishonest, and that they were wrong and they're sorry, unless they put their money where their mouth was in which case they already got what was coming.
From $30 to $4. What can you say now?
["Better safe than get investigated" disclosure: I work at a firm that used to have a short position in ALD.]
David Einhorn was absolutely right, people. He wrote a book about it (i.e. how ALD was a fraud) a while ago. It's time for the Allied apologists (one of whom I did a post on earlier) to admit that they were some combination of stupid and dishonest, and that they were wrong and they're sorry, unless they put their money where their mouth was in which case they already got what was coming.
From $30 to $4. What can you say now?
["Better safe than get investigated" disclosure: I work at a firm that used to have a short position in ALD.]
Wednesday, July 09, 2008
How a Terrible Column Went Wrong
Price of Allied Capital (ALD) stock when Wall Street Journal op-ed board member Holman W. Jenkins Jr.'s "How a Short Sale Went Wrong" was published:$18.73
Price of Allied Capital (ALD) stock at today's close: $12.29.
Some highlights:
"Mr. Einhorn's short position since then apparently has failed to pay off, despite his persistently promoted case that the company was engaged in fraudulent overvaluation of its loans and other assets. One likely reason is that the market simply was never naive about Allied's accounting in the first place. If anything, Allied's share price benefited from Mr. Einhorn's badgering of management to improve an opacity that caused Allied's value to be discounted in the market." [The discounting clearly had not yet begun in earnest]
"He perhaps should have been a buyer rather than a seller, then launched his critique of management. Them's the breaks. And yet his intermittently enjoyable book is valuable for several reasons – not least for prompting one to wonder why a slush bucket like the Small Business Administration (a villain in his tale) even exists." [Or the WSJ op-ed page, for that matter]
"Mr. Einhorn laments that the SEC didn't rip Allied to pieces, driving its share price to $3. How would that have been justice for investors?" [Maybe because that's the price that reflects the true value of the shares, and it would save them from throwing more money into the company's gaping maw through their regularly scheduled secondary offerings?]
If you look at the chart, you'll see the short hadn't even gone that wrong at the time he wrote it. It's not like the stock ran up in Einhorn's face. It had just failed to decline very much. So Holman W. Jenkins Jr. wasn't even right about the historical performance of the stock, let alone his theory that the market had already "discounted" the problems Einhorn has been pointing out. Corporate America needs better bootlickers.
Disclosure: I work at a firm with a short position in Allied Capital
Price of Allied Capital (ALD) stock at today's close: $12.29.
Some highlights:
"Mr. Einhorn's short position since then apparently has failed to pay off, despite his persistently promoted case that the company was engaged in fraudulent overvaluation of its loans and other assets. One likely reason is that the market simply was never naive about Allied's accounting in the first place. If anything, Allied's share price benefited from Mr. Einhorn's badgering of management to improve an opacity that caused Allied's value to be discounted in the market." [The discounting clearly had not yet begun in earnest]
"He perhaps should have been a buyer rather than a seller, then launched his critique of management. Them's the breaks. And yet his intermittently enjoyable book is valuable for several reasons – not least for prompting one to wonder why a slush bucket like the Small Business Administration (a villain in his tale) even exists." [Or the WSJ op-ed page, for that matter]
"Mr. Einhorn laments that the SEC didn't rip Allied to pieces, driving its share price to $3. How would that have been justice for investors?" [Maybe because that's the price that reflects the true value of the shares, and it would save them from throwing more money into the company's gaping maw through their regularly scheduled secondary offerings?]
If you look at the chart, you'll see the short hadn't even gone that wrong at the time he wrote it. It's not like the stock ran up in Einhorn's face. It had just failed to decline very much. So Holman W. Jenkins Jr. wasn't even right about the historical performance of the stock, let alone his theory that the market had already "discounted" the problems Einhorn has been pointing out. Corporate America needs better bootlickers.
Disclosure: I work at a firm with a short position in Allied Capital
Thursday, June 26, 2008
Senseless Einhorn-bashing
This is a couple weeks old, but Whitney Tilson went all line-by-line on the NYT's ass for their idiotic coverage of David Einhorn and his position in Lehman Brothers.
For those who don't know, David Einhorn is a hedge fund manager who has been an outspoken critic of some of the companies whose stocks he is betting against, including Lehman, which is especially controversial given the "run on the bank" collapse of Bear Stearns back in March. Even though most of his $6b fund is invested long (i.e. in stocks) he is known more for his short selling and totally uncouth truth-telling about the shittiness of the companies in question.
Anyway I read his book about Allied Capital ("Fooling Some of the People All the Time") and finished it in two sittings. It's awesome, and the NYT needs to leave David aloooooone!
For those who don't know, David Einhorn is a hedge fund manager who has been an outspoken critic of some of the companies whose stocks he is betting against, including Lehman, which is especially controversial given the "run on the bank" collapse of Bear Stearns back in March. Even though most of his $6b fund is invested long (i.e. in stocks) he is known more for his short selling and totally uncouth truth-telling about the shittiness of the companies in question.
Anyway I read his book about Allied Capital ("Fooling Some of the People All the Time") and finished it in two sittings. It's awesome, and the NYT needs to leave David aloooooone!
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