By Thom Calandra
TIBURON, CALIFORNIA (TC) -- Good morning Voldy Morts!
If you're here to capture an advance glimpse of Actionable & LARGE: Stocks Guru Cracks Buyside Code, my current book project, you've come to zee right spot.
What follows happened, as described in the introduction of this new, nonfiction guide to staying whole on a planet of conniving money merchants and frisky financiers. It happened, exactly as written, about three weeks ago, and it is still happening. This is one example of how the Buyside Code works; the story of this stock -- and they say all stocks are stories -- is far from over. (For more on the timing of the book, see ThomCalandra.com or visit thomcalandra.blogspot.com.)
This is the excerpt:
The other rainy day here, on the lip of Richardson Bay within wind-assisted spitting distance of the Golden Gate Bridge, I was dutifully dropping off our little girl at her grade school just north of our home in Tiburon, California. Once back home, what do I see on my little Queen of Toshiba computer screen, which sits cuddled into a corner of our family room? Shares of one of my absolute deadbeat stocks of this new century, Airspan Networks, were hitting the skids yet again.
Now, if I told you that from time to time, I had bought shares of this microscopic telecommunications company from Florida at $4.50 apiece ... and that over a couple of years' time, they had withered to $1 (rainy January 2008), would you bother continuing with this Actionable & LARGE book? Well, guess what? The expert money merchants were buying the stock BIG at $2 a share (Autumn 2007), in what Wall Street calls a secondary stock offering of 15 million shares.
The reason why Airspan stock, on what Lemony Snicket might call this awful terrible wonderful day, was getting its stock market bum smacked on Nasdaq was an unknown to 99 percent of the planet. The zero-point-zero-zero-zero-zero-ONE of the planet who actually cared about this little maker of so-called WiMAX Internet equipment, they were clueless about the stock's precipitous drop as well. (It trades under the ticker AIRN, short in my addled lingo for "Air? Why yes, that's all we sell.")
And then there was me. I knew the reason Airspan shares yet again were under assault was because some vast and storied venture capital firm was breaking up the partnership and selling its shares -- "sloppy, like a pig," one of my hedge fund friends had told me when I called seeking the lowdown on the low down.
Translation: The bipolar stock of my investing career had become paper origami and in no way represented a company that was providing the parts necessary for wireless broadband networks in the 3.65 gigahertz band. Especially in emerging economies that don't want to dig beneath their deserts and pyramids.
The fund ditching its Airspan shares, out there in California's Silicon Valley, not far from where we live, was once part of a superstar venture firm. It had famously sank money into Compaq Computer Corp. and Lotus Development Corp. more than 20 years ago, and that money gushed higher than an east Texas wild well. Now, the firm's main honchos were packing their bags.
But at least two of the firm's venture funds had owned Airspan since at least as far back as Valentine's Day of 2001, and probably longer than that, according to SEC electronic filings in the USA. (The SEC stands for Securities & Exchange Commission.) The prices this venture firm paid for shares of Airspan, A LOT of shares, almost 1.5 million shares as far as I could reckon, were higher than my $4.50 a share. That's by my calculations.
On that wet January morning of 2008, I plunked down another $10,000 and change for yet another 10,000 shares of Airspan stock, just when the stock was sinking lower than America's poverty line, to $1. There was absolutely zero news under the Airspan ticker about some VC fund liquidating its position in the company.
As I had done numerous times before, I had cracked the buyside code and gotten actionable and LARGE. Cheap stock. Distressed seller. No news. To be sure, I was holding a dirt-cheap stock. I was still losing money on this WiMAX idea, after a couple of years. My average price for 50,000 or so shares was still higher than $2, and the stock was selling for about $1. I had scooped up the 10,000 shares for $1.09 each.
But as my Dad used to say after he'd worked 18 hours straight driving an 18-wheeler, then come home and taken a steaming hot shower, "I feel like a million dollars." I didn't care if the stock went below $1. (Airspan shares the next day were trading at $1.27, but the story there is far from over, and I’m not going anywhere.) In fact, if the stock kept bailing, I'd probably buy more, knowing what I knew about Airspan's WiMAX telecom boxes, base stations and rigorous standards testing and certifications. I mean, for the sake of sweet Mother Mary, the shares were selling for less than 75 percent of total revenue, and the company had just raised, what, $30 million?
I was practicing what I preached: snatching someone else's stock at giveaway prices, swiping it right from their fat-assed, presumably money-losing portfolio. All because I still believed in air-spanned rapid Internet networks criss-crossing cities, regions, canals, oceans and nations. My very very good friend and best man at my wedding, who had just left his years-long position as a buyside banking analyst at an excellent San Francisco hedge fund, said to me over herbal tea the next day at our favorite Boulange, "Thom that's not stealing or snatching or whatever you call it. That's Wall and Broad streets." Whatever. I went into the other room after the Airspan theft and dialed our family iPod to the soundtrack of the Broadway musical, "Spring Awakening." The song was "The Bitch of Living," and it was a rocker.
So I'll level with you. I still could be wrong about this one, this Airspan. Broadband WiMAX might turn into the washout of all time, the biggest boner since that little scooter that was supposed to eliminate cars from cities. All of these countries, such as Ghana and the Ukraine, adapting wide-area Internet broadband, installing their Airspan smart antenna systems and backhaul networks, just so they can avoid spending billions of dollars ripping up their roads and sewers, they might be dead wrong. But you know, I don't think so. I think I'm right. Otherwise I would not be writing this book.
In fact, some 10 days later, still January 2008, but sunny as California was made to be this day, Airspan stock was back to $1.10 or so a share in a terrible awful wonderful stock market bloodbath. So I bought another 10,000 shares, knowing that any Internet provider on a metropolitan/regional/countrywide scale had to make Airpsan its first choice for the innards of the broadband network it intended to erect. My friend, who prefers chasing lofty dividends from massacred preferred-trust bank stocks, and who is very good at it, said to me a second time, over a cheese-melt croissant and some cauliflower soup at Boulange there in Strawberry Village, that this wasn't stealing, this buying stock at distressed levels, so please don't call it that.
Whatever.
For the record, it's not stealing when brokers, with a wink at the company, try to shake shares loose before a hugely positive news event? I knew one company that actually made calls to shareholders, looking for shares to "round up." The Canadian mining companies are especially good at this. I sometimes see a stock nose-dive before the filing of a 43-101 resource report, which by law must identify the geology of ore and mineral deposits at a site. Call the company and its execs won't say a thing, of course. But call an underwriter or a broker or what I call in this book a money merchant (promoters, financiers, investment bankers and so on) connected to the company and they'll say, 'Well, the 43-101 is due out.' Nothing else, just that.
The stock keeps falling, and those poor Bolsheviks out in the garage, living in some Indianapolis suburb that is about 11,000 miles from the prospective mine they've invested in, they're worried because the tuition money is going down the 43-101 drain pipe.
When the company's resource report is finally released, it shows that 5 percent of all the planet's (pick one) gold/silver/platinum/copper is on the company property. The stock quadruples or does a quint in two days, and all those brokers and savvy folks who have actually visited the mine, they've bought all of the petrified garage-lofters' shares the previous day. That's not stealing?
Vot-ever Voldy Morts!
The newspapers say the 43-101 mineral resource classification, which I consider a noble and necessary thing, was legislated after Canada's Bre-X Minerals scandal, when shareholders, many of them in North America, lost everything after the company's Indonesia mine proved to be an utter fraud. You see, to me that multi-billion-dollar swindle wasn't a scandal, what happened to gold investors in 1997. No. Bre-X was a scam, pure and simple, even ludicrous the way those corporate thieves and drunken geologists coated ore samples with cheap gold crumble from pilfered jewelry. What's a scandal in my book, in this book I'm writing as we slog-a-bog, is how knowledgeable and sometimes conniving money merchants steal my beloved garage-lofters' stock by playing coy or silent with what they know, or think they know.
That's the scandal. I am presently on this planet to show Joseph and Josephine G. Loft how to steal stock tat-for-tit.
End of excerpt, Voldies! Except to say Airspan share today, some three or so weeks later, are $1.50 or so, and the story is still far from over. As a matter of pride and financial common CENTS, my family and I have no intention of selling Airspan until its sales of telecom equipment bestow upon this AIRN ticker a market size of at least $400 million. Currently, the 80-odd million shares of Airspan are worth about $120 million, and there is some convertible debt attached to the company.
That's all for now, and see some of you in Phoenix this weekend!
-- ThomCalandra.com
TIBURON, CALIFORNIA (TC) -- Good morning Voldy Morts!
If you're here to capture an advance glimpse of Actionable & LARGE: Stocks Guru Cracks Buyside Code, my current book project, you've come to zee right spot.
What follows happened, as described in the introduction of this new, nonfiction guide to staying whole on a planet of conniving money merchants and frisky financiers. It happened, exactly as written, about three weeks ago, and it is still happening. This is one example of how the Buyside Code works; the story of this stock -- and they say all stocks are stories -- is far from over. (For more on the timing of the book, see ThomCalandra.com or visit thomcalandra.blogspot.com.)
This is the excerpt:
The other rainy day here, on the lip of Richardson Bay within wind-assisted spitting distance of the Golden Gate Bridge, I was dutifully dropping off our little girl at her grade school just north of our home in Tiburon, California. Once back home, what do I see on my little Queen of Toshiba computer screen, which sits cuddled into a corner of our family room? Shares of one of my absolute deadbeat stocks of this new century, Airspan Networks, were hitting the skids yet again.
Now, if I told you that from time to time, I had bought shares of this microscopic telecommunications company from Florida at $4.50 apiece ... and that over a couple of years' time, they had withered to $1 (rainy January 2008), would you bother continuing with this Actionable & LARGE book? Well, guess what? The expert money merchants were buying the stock BIG at $2 a share (Autumn 2007), in what Wall Street calls a secondary stock offering of 15 million shares.
The reason why Airspan stock, on what Lemony Snicket might call this awful terrible wonderful day, was getting its stock market bum smacked on Nasdaq was an unknown to 99 percent of the planet. The zero-point-zero-zero-zero-zero-ONE of the planet who actually cared about this little maker of so-called WiMAX Internet equipment, they were clueless about the stock's precipitous drop as well. (It trades under the ticker AIRN, short in my addled lingo for "Air? Why yes, that's all we sell.")
And then there was me. I knew the reason Airspan shares yet again were under assault was because some vast and storied venture capital firm was breaking up the partnership and selling its shares -- "sloppy, like a pig," one of my hedge fund friends had told me when I called seeking the lowdown on the low down.
Translation: The bipolar stock of my investing career had become paper origami and in no way represented a company that was providing the parts necessary for wireless broadband networks in the 3.65 gigahertz band. Especially in emerging economies that don't want to dig beneath their deserts and pyramids.
The fund ditching its Airspan shares, out there in California's Silicon Valley, not far from where we live, was once part of a superstar venture firm. It had famously sank money into Compaq Computer Corp. and Lotus Development Corp. more than 20 years ago, and that money gushed higher than an east Texas wild well. Now, the firm's main honchos were packing their bags.
But at least two of the firm's venture funds had owned Airspan since at least as far back as Valentine's Day of 2001, and probably longer than that, according to SEC electronic filings in the USA. (The SEC stands for Securities & Exchange Commission.) The prices this venture firm paid for shares of Airspan, A LOT of shares, almost 1.5 million shares as far as I could reckon, were higher than my $4.50 a share. That's by my calculations.
On that wet January morning of 2008, I plunked down another $10,000 and change for yet another 10,000 shares of Airspan stock, just when the stock was sinking lower than America's poverty line, to $1. There was absolutely zero news under the Airspan ticker about some VC fund liquidating its position in the company.
As I had done numerous times before, I had cracked the buyside code and gotten actionable and LARGE. Cheap stock. Distressed seller. No news. To be sure, I was holding a dirt-cheap stock. I was still losing money on this WiMAX idea, after a couple of years. My average price for 50,000 or so shares was still higher than $2, and the stock was selling for about $1. I had scooped up the 10,000 shares for $1.09 each.
But as my Dad used to say after he'd worked 18 hours straight driving an 18-wheeler, then come home and taken a steaming hot shower, "I feel like a million dollars." I didn't care if the stock went below $1. (Airspan shares the next day were trading at $1.27, but the story there is far from over, and I’m not going anywhere.) In fact, if the stock kept bailing, I'd probably buy more, knowing what I knew about Airspan's WiMAX telecom boxes, base stations and rigorous standards testing and certifications. I mean, for the sake of sweet Mother Mary, the shares were selling for less than 75 percent of total revenue, and the company had just raised, what, $30 million?
I was practicing what I preached: snatching someone else's stock at giveaway prices, swiping it right from their fat-assed, presumably money-losing portfolio. All because I still believed in air-spanned rapid Internet networks criss-crossing cities, regions, canals, oceans and nations. My very very good friend and best man at my wedding, who had just left his years-long position as a buyside banking analyst at an excellent San Francisco hedge fund, said to me over herbal tea the next day at our favorite Boulange, "Thom that's not stealing or snatching or whatever you call it. That's Wall and Broad streets." Whatever. I went into the other room after the Airspan theft and dialed our family iPod to the soundtrack of the Broadway musical, "Spring Awakening." The song was "The Bitch of Living," and it was a rocker.
So I'll level with you. I still could be wrong about this one, this Airspan. Broadband WiMAX might turn into the washout of all time, the biggest boner since that little scooter that was supposed to eliminate cars from cities. All of these countries, such as Ghana and the Ukraine, adapting wide-area Internet broadband, installing their Airspan smart antenna systems and backhaul networks, just so they can avoid spending billions of dollars ripping up their roads and sewers, they might be dead wrong. But you know, I don't think so. I think I'm right. Otherwise I would not be writing this book.
In fact, some 10 days later, still January 2008, but sunny as California was made to be this day, Airspan stock was back to $1.10 or so a share in a terrible awful wonderful stock market bloodbath. So I bought another 10,000 shares, knowing that any Internet provider on a metropolitan/regional/countrywide scale had to make Airpsan its first choice for the innards of the broadband network it intended to erect. My friend, who prefers chasing lofty dividends from massacred preferred-trust bank stocks, and who is very good at it, said to me a second time, over a cheese-melt croissant and some cauliflower soup at Boulange there in Strawberry Village, that this wasn't stealing, this buying stock at distressed levels, so please don't call it that.
Whatever.
For the record, it's not stealing when brokers, with a wink at the company, try to shake shares loose before a hugely positive news event? I knew one company that actually made calls to shareholders, looking for shares to "round up." The Canadian mining companies are especially good at this. I sometimes see a stock nose-dive before the filing of a 43-101 resource report, which by law must identify the geology of ore and mineral deposits at a site. Call the company and its execs won't say a thing, of course. But call an underwriter or a broker or what I call in this book a money merchant (promoters, financiers, investment bankers and so on) connected to the company and they'll say, 'Well, the 43-101 is due out.' Nothing else, just that.
The stock keeps falling, and those poor Bolsheviks out in the garage, living in some Indianapolis suburb that is about 11,000 miles from the prospective mine they've invested in, they're worried because the tuition money is going down the 43-101 drain pipe.
When the company's resource report is finally released, it shows that 5 percent of all the planet's (pick one) gold/silver/platinum/copper is on the company property. The stock quadruples or does a quint in two days, and all those brokers and savvy folks who have actually visited the mine, they've bought all of the petrified garage-lofters' shares the previous day. That's not stealing?
Vot-ever Voldy Morts!
The newspapers say the 43-101 mineral resource classification, which I consider a noble and necessary thing, was legislated after Canada's Bre-X Minerals scandal, when shareholders, many of them in North America, lost everything after the company's Indonesia mine proved to be an utter fraud. You see, to me that multi-billion-dollar swindle wasn't a scandal, what happened to gold investors in 1997. No. Bre-X was a scam, pure and simple, even ludicrous the way those corporate thieves and drunken geologists coated ore samples with cheap gold crumble from pilfered jewelry. What's a scandal in my book, in this book I'm writing as we slog-a-bog, is how knowledgeable and sometimes conniving money merchants steal my beloved garage-lofters' stock by playing coy or silent with what they know, or think they know.
That's the scandal. I am presently on this planet to show Joseph and Josephine G. Loft how to steal stock tat-for-tit.
End of excerpt, Voldies! Except to say Airspan share today, some three or so weeks later, are $1.50 or so, and the story is still far from over. As a matter of pride and financial common CENTS, my family and I have no intention of selling Airspan until its sales of telecom equipment bestow upon this AIRN ticker a market size of at least $400 million. Currently, the 80-odd million shares of Airspan are worth about $120 million, and there is some convertible debt attached to the company.
That's all for now, and see some of you in Phoenix this weekend!
-- ThomCalandra.com
2 comments:
Watching the blog Thom, nice comments. Some friends and I have been discussing the dreadful market action of late and your beloved tech looks a lot like my beloved resource plays. They just keep getting cheaper but I have stopped buying for now and am sitting back to see how much carnage the deflating of the hedge fund age creates. I see some stupid cheap shares in companies with real assets (be they tangible or intellectual) but they were stupid cheap 30% and as much as it defies reason they may be stupid cheaper 30% lower than they are now. I think belief and staying power are the keys to this market and both are being tested.
Keep it up.
Thank ROBERT.Spread the word.
If you think about this theme of 'stupid cheap,' it is actually shifting as we speak. Look at 10 or 20 of these orphans and I think you will see all of the ferocious swings of late have left them 10 percent or 20 percent off their lows.
At any rate, keep on slog--bogging. 'Stupid cheap' is a great theme, and the junior resource companies are selling far more 'stupid' than almost anything out there. Except perhaps for WiMax and avian flu vaccine developers!
But hey, what do I know?
Prego, Roberto.
-- thomcalandra.com
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