Netflix, in contrast, has 27.1 million paid subs and has a market cap of $4.64 billion, or$164/sub.
Are Hulu’s subs really worth
Not a chance. In fact,we
’d argue that Netflix is a
better business and its subs should be worth
SanDisk reported poor Q1 earnings, with revenue down 6.8% and earnings per share down 50%,and gave weak guidance for Q2 as well. Down to $37 with more than $15/share in net cash, thestock appea
rs cheap, but we haven’t bought more as we continue to analyze the situation.
develop conviction that the company’s problems are short
term in nature, we’ll add to our
position; but if we conclude that our investment thesis is wrong and that this historically cyclical
commodity business will remain so, then we’ll exit.
There was no company-specific news about Grupo Prisa last month, but there was plenty of terrible country-specific news as more evidence emerged
that Spain (Grupo Prisa’s p
rimarymarket) is going through a severe and likely long-lasting recession
unemployment is now at
24.1%, even higher than Greece’s! Shame on us for not recognizing this risk, which of course
appears completely obvious in hindsight (which is always 20/20).Like SanDisk,
Grupo Prisa’s stock
appears very cheap, but we are neither buying nor selling atthis point.
The company’s management and board have done an excellent job navigating the
crisis and refinancing its debt, so we think the stock has multi-bagger upside potential if Spainstarts to turn around, but we also recognize the many risk factors present, so we think the current3% position size is just right.
An Overview of the U.S. Economy and Housing Market,
Our View of the Stock Market, Why We’re Short Homebuilders, Our Top Holdings, and Our In
- Depth Analysis of Our Three Largest Positions: Berkshire Hathaway, Iridium and Howard Hughes Corp
. Pages 21-28 are our most up-to-date slides on the housing market and pages 30-38
are why we’re short four homebuilders plus the ITB (though, to be clear, it’s not
super highconviction: all five are cumulatively less than a 5% short position, with SPF nearly half of it).Also new are the slides on South Street Seaport (pages 105-110), which is going to be a grandslam for Howard Hughes.
Thank you for your continued confidence in us and the fund. As always, we welcome yourcomments or questions, so please don
t hesitate to call us at (212) 386-7160.Sincerely yours,Whitney Tilson and Glenn Tongue