Amit Chokshi

Comment Stream » BGP

Comment Stream
Filter comments by:
Highest rated Latest comments
Or filter by symbol:
  • Why We Doubled Our Position in Borders
    Where was the margin of safety at much higher levels, BGP has no asset backstop and just a bunch of leases in many second tier locations. It appears the only MOS was the presence of Ackman at higher levels. The idea that BKS would buy BGP sounds idiotic, why wouldn't they just wait for BGP locations to struggle and kick out and then go directly to the lessor to assume the leases and flat out push BGP out?

    BGP could be renting from Vornado for example and not be meeting its rent payments. BKS can just go to Vornado and say they'll assume the lease and then just boot BGP out for much cheaper than buying BGP. Also, with the current situation in commercial real estate and retail, why would BKS want to "expand" via an acquisition of BGP when nearly every retailer is pulling back? I don't think the BGP locations are all that unique or have little overlap relative to where BKS is, do they really need to BGP site 1-2 miles down the road from them?

    No LBO shop would touch BGP and no bank would refinance that on an EBITDAR basis. Also, why do you even mention EBITDA for a retailer that leases all of its stores? If you want to find what BGP would be financed for and more important what it's really valued at, used EBITDAR and gross up the leases for the enterprise value. Then step back and think if a bank would actually refinance that for a take private. I'm sorry but to be a professional fund manager and miss this is a considerably oversight IMO.

    I've been an admirer of Tilson's previous writings from the Fool and also his behavioral finance stuff but over time I've really been disillusioned with what he writes relative to what he does. If you're a Buffett disciple as you claim to be and manage $200MM in T2 I find it odd that your largest ideas are Ackman tagalongs in TGT and BGP. At least Ackman duped investors into being in a separate fund that doesn't impact this main fund's returns, yet in T2 you have calls and common TGT and are paying a tough price for it. Then to also own BKS and BGP? Not to mention prior investments in MCD and WEN/THI?

    I honestly can't see why an investor gets charged fees to be in a portfolio that is a mini Pershing Square to some extent. With $200MM you can invest in the most inefficient areas of the market and your recent coverage in Business Week regarding broken IPOs would make people think you are combing these pockets of inefficiency yet you plow a lot of your fund's capital into broadly followed stocks.
    Apr 18 08:57 am |Rating: 0 0 |Link to Comment |View article
  • Borders Group: Spencer Raises Stake, and SAC Capital Discloses "Passive" Stake
    Hard to see what these guys will be able to do here. The usual value building 101 of closing down underperforming stores, etc seems ok, guess they can shut down any mall stores and the usual "underperforming&... stores but I'd bet that the entire company is underperforming due to no real merchandise aside from Harry Potter. They'll have the same problems Elliott is having with PIR, there is no real separation between under and overperformers, the entire company is having issues. Plus with BGP's current valuation there's no way a buyout firm touches it.
    Aug 07 08:28 am |Rating: 0 0 |Link to Comment |View article

Amit Chokshi's Comments Stream Stats

  • 88 Comments, 0 , 1
  • Total Comment Stream rating - = -1