The Razor’s Edge

We break down Snap's upside earnings report and what it means for the internet advertising space, coronavirus plays, the effects of stimulus, and a lot more.

Topics Covered

2:30 minute mark: Setting the scene

7:30: Attention Costs

10:00: The Hollywood effect

14:00: Snap's international growth

18:00: The filter issue

23:00: Relative valuation

27:00: Amazon's perfect storm

30:00: Other advertisers' prospects

33:00: The demographic questions

37:00: Stimulus effects

53:00: Shifting spending

59:00: Differing audiences

1:01:00: Twitter digression

1:07:00: How to interpret this earnings season

1:12:00: The Tiktok threat

1:17:00: Recovery risks

1:24:00: Second level effects

Zoom (ZM) was a go-go momentum stock in its first year of trading, with revenue multiples and performance outpacing most of its SAAS (software as a service peers). That was to a degree deserved due to the company's profitable business model and competitive advantages as a smooth, easy-to use video communications platform.

With the advent of lockdowns, quarantines, and social distancing to combat the spread of COVID-19, Zoom has transcended from growth stock favorite to widely known consumer brand and almost an inverse ETF of the bear market. While value investors like to grumble about the market getting irrational about growth stocks, there are some reasons to be optimistic about Zoom's prospects at least as compared to where they stood on January 1st. The increased usage of the product - while costing Zoom more to support - should both accelerate adoption for the long-term and potentially open up new avenues and use cases. On the other hand, the increased focus on Zoom has also highlighted issues the company has, most primarily with security, something hardwired into the company's fantastic success to date.

We discussed the cross-currents at play here and where Zoom might be headed next.

Topics Covered

2:30 minute mark - The Zoom setup

6:00 - Zoom's origin story and its advantage

14:15 - Zoom's killer app

16:30 - Questions that are beginning to arise

21:15 - The security issues

26:30 - Enterprise vs. consumer business model, and being thesocial distancing play

33:00 - Overall market description and Zoom's rise

38:15 - The competition

47:00 - Justifying the valuation?

55:00 - What sort of revenue upside is there

1:04:00 - Sorting out temporary from permanent

1:14:30 - The Zoom production studio angle

1:19:00 - China backlash

1:23:00 - Regulation

1:28:00 - A final macro note

J Mintzmyer speaks with Euronav Hugo de Stoop as part of Value Investor's Edge's COVID 19 / Oil Price War Forum. While shipping is in turmoil, oil tankers like Euronav are very nicely positioned. The two discuss the outlook for the months ahead.

Topics Covered

2:15 minute mark - How is COVID-19 impacting the crude tanker markets and EURN?

4:45 -How has the oil price war shifted the market- How is EURN positioned?

8:00 - Is this market surge different than last fall with COSCO?

13:00 - Only a few fixtures so far this week, more expected soon?

14:00 - IMO 2020 update, any shift in strategy?

19:45 - Any plans to load up more VLSFO to hedge lower fuel costs?

23:00 -The other ULCC on a new storage contract? Other storage requests?

27:30 - How do the recent resales fit into your fleet and IMO strategy?

31:00 - Any near-term supply risks or overhang on orders?

36:00 - Has your capital allocation strategy shifted at all this year?

40:30 - How to differentiate between vessel acquisitions and repurchases?

43:30 - Clarification on lock-out timing- delay to 1 Apr? Annual meeting vote?

50:30 - Any shift to your views on leverage? Still ample capacity?

After the Disney podcast we recorded last Friday and posted yesterday, Akram's Razor and Daniel Shvartsman continued to discuss the macro environment and the strange place we're in.

Disney is considered as blue-chip as it gets, but when you break down its famous flywheel - different business lines that all flow together to create the greatest diversions in the world - there's a lot of trouble spread around. Theme parks, box office, live sports, advertising are all under pressure - is Disney + enough to make up for that? We discuss the outlook for the entertainment company.

Topics covered:

2:30 minute mark -The Corona bear ETF

7:30 - The flywheel is stuck

12:30 - Long-term effect on consumer behavior in travel

17:00 - The significance of Bob Chapek's theme parks experience

25:00 - Cruise lines and international flags

28:00 - Whither (wither?) the box office?

36:00 - Box Office as marketing

41:00 - ESPN - the wild card

56:00 - Disney+ - the ace in the hole?

1:01:00 - The next WFH play

1:09:00 - The diversionary business model in a diversionless world

The last time J Mintzmyer and Value Investor's Edge hosted a virtual investor forum featuring industry analysts, management teams, and investors, all the way back in January 2020, it was like another world. IMO 2020 was still the buzzword, post New Year cyclicality was driving behavior, and coronavirus looked like it was a local issue in China. Meanwhile, a virtual investor forum proved to be quite ahead of the curve.

A lot has changed in two months. So, last week Mintzmyer and team hosted 15 guests ranging from industry analysts to investors to management teams, with a look at how the shipping situation has changed. The second public episode features Teekay LNG Partners' (TGP) management team, namely CEO Mark Kremin and CFO Scott Gayton. They discuss how their capital allocation looks under the current climate and whether there are any counterparty risks investors should watch out for.

Topics Covered

2:00 minute mark - Direct Coronavirus impacts to current work environment? 

5:00 - Any direct COVID-19 impacts to TGP itself? 

7:15 - Any fundamental changes for LNG shipping? Oil price war impact? 

9:00 - Any shift in longer-term growth projects yet? Qatar plans? 

10:45 - Concern for counterparties? Force majeure risk?

14:30 - Any exposure left to non-investment grade counterparties? 

18:30 - Additional ‘deep dive’ into contracts regarding force majeure? 

21:00 - How has this market shifted capital allocation priorities? 

24:00 - Reiterating full dividend stability at $0.25/qtr?

25:15 - Opportunistically repurchasing units here? Higher volumes? 

27:00 - Is the NOK bond market still open? Revolver extension? 

30:15 - Any interest in repurchasing the preferred equity? 

33:45 - Any interest in consolidation or equity plays in other firms? 

34:30 - Midsize LPG rates holding up? 

36:00 - When do forward LNG rates start to matter? 

38:00 - Asking for a ‘full pledge’ to keep the dividend regardless of price.

As the coronavirus bear market continues to roil investors, we talk about what effect its had on the tech sector in general. Is the bubble over? Will the Nasdaq be a safe haven and a future outperformer? We discuss the impact already felt in the market and where things might go.

Topics Covered

3:00 minute mark - The seismic shift

6:00 - Change in valuation approach

12:00 - Can the Nasdaq continue to outperform

19:00 - Risk assessment

25:00 - Owning market performance and the loss of margin of safety

34:00 - How ot assess going forward

39:00 - Potential sectors to invest in

48:00 - Are we at a divergence?

56:00 - Does a safe haven now sacrifice future growth?

1:03:00 - The flattening of volatility and the natural reaction

1:09:00 - The longer-term impact

1:12:00 - Close the market?

The last time J Mintzmyer and Value Investor's Edge hosted a virtual investor forum featuring industry analysts, management teams, and investors, all the way back in January 2020, it was like another world. IMO 2020 was still the buzzword, post New Year cyclicality was driving behavior, and coronavirus looked like it was a local issue in China.

A lot has changed in two months. As Mintzmyer and the VIE team gather a new round of participants for a COVID-19 and Oil Price War focused forum this week, one of the themes is how that situation has changed. And there's no better place to start than with International Seaways (INSW). CEO Lois Zabrocky and CFO Jeff Pribor took part in the first forum - it was our most recent VIE episode posted - so it offers an easy compare and contrast.

Topics Covered

2:00 minute mark: What is the immediate impact of COVID-19 to your markets? 

3:15 - How much follow-on activity is coming out of China? 

4:45 - Any non-traditional routes developing due to the oil price war? 

6:00 - How does INSW benefit from this market?

8:00 - Is the Suezmax market benefitting from this strength? 

10:45 - How is the Panamax market performing now? 

12:00 - MR product tanker market update? 

13:45 - Any indications of potential product market storage? 

14:45 - Have you adjusted your operations, shoreside and at-sea for COVID? 

17:30 - IMO 2020 transition and scrubber update? 

21:15 - Current timeline of scrubber installations in China (60 days!)

22:30 - Can you delay or back-out of scrubber installations? 

25:00 - What is your current and target balance sheet leverage? 

28:00 - Restrictive covenants in the current debt facility for repurchases? 

29:45 - Commentary on dividends and share repurchases?

Elliott Management waged a short-lived and a successful activist campaign against Twitter, at least from the perspective of getting the company to respond. While the long-term results and the fate of Jack Dorsey as CEO are still unclear, we discuss whether Twitter's future is appealing for shareholders, what could actually be done to fix Twitter, and why this might not be the lay-up it seems.

Topics Covered:

3:00 - Activist shareholders... Elliot's involvement.

4:30 - Is the goal solely to remove Dorsey?

9:30 - What's wrong with Twitter?

15:00 - Not growing fast enough given its exposure

23:30 - About Scott Galloway

26:30 - Should/shouldn't Twitter be more like Facebook?

29:30 - Strong user base that doesn't like change

33:45 - What do you think is going to happen with Twitter in the next weeks and months?

38:00 - What would you do in your first year as CEO of Twitter?

48:30 - Facebook excels at gaining attention, how can Twitter do this better?

53:00 - Twitter has a narrower appeal than Facebook.

1:01:30 - What can a full time CEO do? 

1:05:00 - Who would buy Twitter? How to add revenue?

1:23:00 - Buy at this price?

Four different forces combined to create a big sell-off last week, and then a jagged but strong rebound this week. There's of course the spread of the coronavirus, COVID-19. There is the Democratic primary in the US and what it foretells for the Presidential election in November. There is the, ahem, healthy valuation of the stock market, poised at all-time highs before the 7-session sell-off. And there's the role of the Federal Reserve, both in setting interest rates and in providing liquidity to the markets. We try to break down what matters and what is transient here, while conceding that uncertainty is a big part of the overall outlook.

Topics Covered

3:00 minute mark - How are you sizing the current market correction? Does this change your stance?

6:30 - Once you figure out your starting point how much does the virus matter?

11:00 - Is there a risk of market contagion?

20:00 - Was repo buying necessary?

21:30 - Has there been a fundamental change in the market such that it won't bounce back this time?

29:00 - NVDA as an example

31:45 - Have you made changes to your exposure?

40:00 - Does something like this week change people's perspectives?

47:00 - How do you evaluate a "drop" vs a recession?

1:00:00 - The election from a markets perspective... general politics.