Using Veritas to Construct the "Per…

29-04-2017 Hits:88553 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:82245 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:82138 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:86635 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:83068 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:85191 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:56292 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:84519 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:84229 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:84089 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:90576 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:88149 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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We performed some preliminary analysis on Insulet Corporation (PODD) with a focus on their latest quarterly results. With its stock price currently trading in the region of US$7-$8 per share, it fails in the very first parameter that we use for screening short candidates, and that is a company's share price must be at a level to provide X% return given Y investment. In other words, the share price is already too low. Since I do not consider it a candidate for my own prop trading program, I am releasing this cursory overview to the public.

The stock price has traded in the range of $3-$21 in the last 52 weeks and there could be further downside left from the current levels to make it an attractive short opportunity for the right type of speculator, but rationalization of their cost structure with most of the production being shifted to China and their preparation for an entry into Europe could well turn out to be positives and result in a rally in the near term. Following are some of our initial observation on the company's financials / fundamental strength:

  • Insulet posted strong revenue growth for the three months and nine months ended September 2008. Revenue for Q3 2008 rose 167% year-on-year to US$10.1 million mainly due to a 20% increase in the number of patients using OmniPod driven by the company's sales and marketing efforts. For the nine months ended September 2008 revenues increased 169% to US$24.2 million. Insulet has agreements with Abbott Diabetes Care Inc. and DexCom Inc. to integrate their continuous glucose monitoring technologies with its Personal Diabetes Manager (PDM). The company realized revenues of US$1.2 million in Q3 2008 and US$1.4 million for the three and nine months ended September 2008 in relation to the Abbott agreement. In June 2008, the company also signed an agreement with Ferring Pharmaceuticals to develop the OmniPod System for the delivery of drugs developed by Ferring. In fact, this is Insulet's first development agreement for a non-diabetes drug delivery application. Additionally the company has deferred revenue of US$2.3 million as of September 30, 2008.

 

  • In order to achieve profitability, Insulet aims to reduce production cost. In line with this strategy, the company outsourced the production of OmniPod to a subsidiary of Flextronics International Ltd in China in 2007. This move helped Insulet reduce per unit cost due to increased production and resultant higher absorption of overhead costs. Gross loss was US$87,000 in Q3 2008 as compared to US$3.8 million in Q3 2007. For the nine months ended September 2008, gross loss was US$5.8 million as compared to US$10 million for the corresponding period last year. Production is currently being undertaken on a partially automated manufacturing line at the Chinese facility. By completely automating the manufacturing process, the company aims to further expand production and improve gross margins in the coming quarters.

 

  • Since the commencement of commercial sales of the OmniPod System in the United States in October 2005, Insulet has expanded its sales and marketing efforts to increase market penetration of the OmniPod system throughout the US starting with the Eastern states. The OmniPod System is currently available in all 50 states. In Q3 2008, sales and marketing expenses increased by 146% y-o-y to US$10.2 million while that for the nine months ended September 2008 increased by 179% y-o-y to US$29.7 million due to additional hiring and trade shows. Additionally, general and administrative expenses increased by 86% y-o-y to US$6.3 million in Q3 2008 and by 91% y-o-y to 16.9 million for the nine months ended September 2008 as a result of expanding business. The significant increase in expenses led to an operating loss of US$19.8 million in Q3 2008 as compared to US$14.5 million in Q3 2007. The company expects operating expenses to continue to increase in the near term.

 

  • Insulet incurred interest expense of approximately US$1.1 million and US$1.3 million for the three and nine months ended September 30, 2008, respectively. This is in connection with the private placement of 5.375% Convertible Senior Notes worth US$85 million due on June 15, 2013. As a result, interest expense more than doubled to US$1.4 million in Q3 2008. This factor, in addition to the operating loss of US$19.8 million led to a net loss of US$20.8 million in Q3 2008 as compared to a net loss of 13.6 million in Q3 2007. For the nine months ended September 2008, net loss was US$64.5 million as compared to US$37.9 million for the corresponding period last year. Insulet is expected to continue incurring losses in the near term.

 

  • Insulet's cash balance as on September 30, 2008 stands at US$74.1 million. This includes US$81.5 million raised through the Convertible Notes issue.  Approximately $23.2 million of the net proceeds of the issue were used to repay old debt while the remainder is intended to be used for general corporate purposes. As Insulet continues to expand its business it will need additional capital to increase market penetration amid stiff competition and increase manufacturing capacity. The company expects a capital expenditure of at least US$10 million in FY08 for the expansion and automation of the manufacturing capacity. As a result, the company may have to raise additional debt or issue shares - extremely difficult in the current market environment. While it has historically been successful in doing so (Insulet has raised US$327 million since its inception in 2000), the current market turmoil poses a challenge. The company recently declared a dividend distribution of one preferred stock purchase right for each outstanding equity share to existing shareholders. The rights will become exercisable if a person acquires 15% or more of Insulet's common stock.