usdtor05 Posted October 5, 2014 Share Posted October 5, 2014 @thepupil, are you primarily focused on yahoo as it is much more likely to have a catalyst versus SFBTY? On SOTP, SFBTY is trading at a significant discount. Link to comment Share on other sites More sharing options...
thepupil Posted October 5, 2014 Share Posted October 5, 2014 I've read the breakdowns of softbank's NAV and find the case compelling but I think yahoo is simpler and activists can have actual influence at yahoo (SoftBank is and always will be the Son show). There are only 4 assets 3/4 are publicly traded or cash. If yahoo core is worth $5 / share then only 9% or so of the pretax NAV is not cash, japan, or BABA. Marissa Mayer has to destroy a $15+ billion valuation gap through tax inefficiency or dumb acquisitions for this to not work out over the long term. I just don't think that's likely. I also just have a bias toward owning US listed stocks, not that that is logical. Link to comment Share on other sites More sharing options...
usdtor05 Posted October 5, 2014 Share Posted October 5, 2014 fair enough makes sense...the fact that SFTBY is the Son show is a massive positive to me. Get your points. In terms of special sits, SMA is interesting. Basic thesis is: 1. Two businesses (i) OEM, (ii) surgical business (sell instruments, etc. much smaller than the other players here including CareFusion's business) 2. OEM getting bought out, $7.50 will be returned shareholders and then they will spin out the surgical business (stock around $10 now). 3. Implied trading value post spin vs. fcf is around 7x 4. New spinoff will be very small (less than $100M MC so you should/have seen the larger holders getting out). 5. Most funds are likely afraid to take a full allocation here in case the deal falls through but there were a number of bids for OEM so should be ok (Hart, Scott, Rodino approved). You have to buy roughly 4x the amount of the surgical business that you want to own given the cash that is going to be repaid 6. Management is crazily incentivized to grow the business with huge equity grants based on performance (something like 7% of the business post spin vs. current ownership around 1% of the total SMA business). Disclosure - We are long Link to comment Share on other sites More sharing options...
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