Wednesday, April 27, 2016

What We're Reading ~ 4/27/16

Second level thinking: what smart people use to outperform [Farnam Street]

Consumption in China is resilient, despite troubled economy [Economist]

What if China already had a hard landing? [FT Alphaville]

Baidu - a hidden gem [Variant Views]

A look at Expeditors International [Rational Walk]

The curious case of Hercules Offshore [Oozing Alpha]

A subprime boom, insane interest rates, predatory lending: sound familiar? [Motherjones]

Luck meets perseverance: the creation of IBM's competitive advantage [Farnam Street]

A look at India's e-commerce market through Flipkart [Founding Fuel]

The extinction invention [MIT Technology Review]

Learning Larry Page's Alphabet [Fast Company]

The case for investing in Latin America [Bloomberg]

The affordability crisis: what happens when millennials can't afford homes? [Apartment List]

More than 40% of student borrowers aren't making payments [WSJ]

47% of Americans can't come up with $400 in an emergency [The Atlantic]

Will driverless cars mean the end of auto insurance? [CSMonitor]

Inside the fall of SunEdison [WSJ]

Lessons from SunEdison's collapse [BaseHitInvesting]

Facebook wants to be the layer between you and the future [Buzzfeed]

Inside Apple's secretive iPhone factory [Bloomberg]

Third Point's Q1 Letter: Playing Merger Arb & Pro Forma Situations

Dan Loeb's Third Point is out with its first quarter letter.  In it, they talk about how hedge funds have seen a lot of carnage as of late.

Specifically, they see the decimation in merger arbitrage land as an opportunity, writing, "many of these combined businesses should compound in value thanks to the benefit of synergies, modest financial leverage, and strong or improved management teams that have a history of successful capital allocation."

Their letter outlines their thesis on the following plays:

- Dow / DuPont
- ABInBev / SAB Miller / Molson Coors
- Time Warner Cable / Charter Communications
- Chubb / ACE
- Danaher

Embedded below is Third Point's Q1 letter:

Bridger Capital Boosts Pacific Biosciences of California Stake

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding their position in Pacific Biosciences of California (PACB).

Per the filing, Bridger now owns 5.1% of the company with over 4.46 million shares.  The filing was made due to activity on April 15th.  This is up from the 2.15 million shares they owned at the end of 2015.

Per Google Finance, Pacific Biosciences of California is "designs, develops and manufactures sequencing systems to help scientists resolve genetically complex problems. The Company's Single Molecule, Real-Time (SMRT) technology enables single molecule, real-time detection of biological processes. Based on its SMRT technology, the Company has introduced the PacBio RS II System. It offers The SMRT Cell, Phospholinked nucleotides and The PacBio RS II and Sequel instruments. Based on the Company's SMRT sequencing technology, its products enable de novo genome assembly to finish genomes in order to identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms and find genes; targeted sequencing to characterize genetic variations, and deoxyribonucleic acid (DNA) base modification identification to help characterize epigenetic regulation and DNA damage.."

Viking Global Discloses Rice Energy Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC and disclosed a new position in shares of Rice Energy (RICE).

Per the filing, Viking now owns 6.5% of the company with over 10.13 million shares.  The filing was made due to activity on April 15th.

Per Google Finance, Rice Energy is "an independent natural gas and oil company. The Company is engaged in the acquisition, exploration and development of natural gas, oil and natural gas liquids (NGL) properties in the Appalachian Basin. The Company conducts its operations through two segments: Exploration and Production, and Midstream. The Exploration and Production segment is engaged in the acquisition, exploration and development of natural gas, oil and NGLs. The Midstream segment is engaged in the gathering and compression of natural gas, oil and NGL production of, and in the provision of water services to support the well completion activities of, Rice Energy and third parties. It holds approximately 92,000 net acres in the southwestern core of the Marcellus Shale, primarily in Washington and Greene Counties, Pennsylvania, and approximately 56,000 net acres in the southeastern core of the Utica Shale, primarily in Belmont County, Ohio."