Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*DOJ Going Overboard:</em></strong>The US Department of Justice (DOJ) has begun investigating Visa (V.US) [Visa] over anticompetitive practices again. This time for alleged restrictions of merchants from routing in-store and online debit-card transactions through less expensive card networks, which is in contravention to the 2010 Durbin Amendment; and</p><p><strong><em>*Here Is Where We Think The DOJ Is Wrong: </em></strong>With Visa’s termination of its upstart Plaid acquisition, Visa’s alleged attempt to monopolize the online debit business has already been thwarted. Further, the combination of mix shift toward covered transactions coupled with declining yields has acted as a headwind for Visa's debit interchange fees. That Mastercard (MA.US) has convinced numerous US banks to switch their debit-card portfolios away from Visa evidences competitive pricing pressures. Lastly, there may actually be precedence for Visa’s stance given the recent outcome of the Federal Trade Commission (FTC) v. Qualcomm (QCOM.US) case.</p>

*DOJ Going Overboard:The US Department of Justice (DOJ) has begun investigating Visa (V.US) [Visa] over anticompetitive practices again. This time for alleged restrictions of merchants from routing in-store and online debit-card transactions through less expensive card networks, which is in contravention to the 2010 Durbin Amendment; and*Here Is Where We Think The DOJ Is Wrong: With Visa’s termination of its upstart Plaid acquisition, Visa’s alleged attempt to monopolize the online debit business has already been thwarted. Further, the combination of mix shift toward covered transactions coupled with declining yields has acted as a headwind for Visa's debit interchange fees. That Mastercard (MA.US) has convinced numerous US banks to switch their debit-card portfolios away from Visa evidences competitive pricing pressures. Lastly, there may actually be precedence for Visa’s stance given the recent outcome of the Federal Trade Commission (FTC) v. Qualcomm (QCOM.US) case.

Visa Inc – Noise Creates Buying Opportunity

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<p>We’ve been bullish on Disney since early last year when its stock fell below $100 on pandemic concerns, as the market was underestimating the power of the DTC business. That underestimation no longer exists and Disney’s upside to its current valuation is becoming harder to justify as we near $200/share. Disney’s quarter was good enough to keep the bull case intact: booming DTC business and soon to fully re-open Parks business driving a rebound in earnings growth. When we invest on the long side, we want to be able to generate a &gt;30% one year return, so what do we have to believe on Disney from here for 2021?</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We’ve been bullish on Disney since early last year when its stock fell below $100 on pandemic concerns, as the market was underestimating the power of the DTC business. That underestimation no longer exists and Disney’s upside to its current valuation is becoming harder to justify as we near $200/share. Disney’s quarter was good enough to keep the bull case intact: booming DTC business and soon to fully re-open Parks business driving a rebound in earnings growth. When we invest on the long side, we want to be able to generate a &gt;30% one year return, so what do we have to believe on Disney from here for 2021?Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Disney 1Q21: Is Streaming Enough to Support $200?

<p>We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.</p><p>We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

<p>We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

TMT Corona Virus Selloff Opportunities: Disney

M&A Reporting, CTFN

Jonathan Spitzer

M&A Reporting

CTFN

Bringing the marketplace leading coverage of mergers, events, and major corporate actions, CTFN has a team of seasoned reporters from Los Angeles to London, publishing news that advances stories that matter to event-driven investors and deal professionals.

Index Rebalance

<p>As share class trades go, Discovery has presented several opportunities over the years to take advantage of index changes, corporate events, and a management that has aggressively repurchased nonvoting DISCK shares versus voting DISCA shares.</p>

As share class trades go, Discovery has presented several opportunities over the years to take advantage of index changes, corporate events, and a management that has aggressively repurchased nonvoting DISCK shares versus voting DISCA shares.

Discovery Management Will Likely Soon Be Helping Narrow the Share Class Spread

United States

Warner Bros. Discovery, Inc. operates as a media and entertainment company. The Company offers a complete portfolio of content, brands, and franchises across television, film, streaming, and gaming.

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Warner Bros Discovery (DISCA US)

Visa Inc – Noise Creates Buying Opportunity

VISA: The DOJ has again begun investigating Visa over anticompetitive practices due to alleged merchant restrictions to rout online debit-card...

Thomas J. Monaco

Disney 1Q21: Is Streaming Enough to Support $200?

We move to the sidelines on Disney after being long for the past year. We think the stock has fully valued a streaming business that has a little...

Aaron Gabin

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior...

Aaron Gabin

TMT Corona Virus Selloff Opportunities: Disney

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow....

Aaron Gabin

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Visa Inc – Noise Creates Buying Opportunity

VISA: The DOJ has again begun investigating Visa over anticompetitive practices due to alleged merchant restrictions to rout online debit-card...

Thomas J. Monaco

Disney 1Q21: Is Streaming Enough to Support $200?

We move to the sidelines on Disney after being long for the past year. We think the stock has fully valued a streaming business that has a little...

Aaron Gabin

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior...

Aaron Gabin

TMT Corona Virus Selloff Opportunities: Disney

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow....

Aaron Gabin

Discovery Management Will Likely Soon Be Helping Narrow the Share Class Spread

As share class trades go, Discovery has presented several opportunities over the years to take advantage of index changes, corporate events, and a...

CTFN