Saul dodges another bullet! For those who own UBNT:
https://www.streetinsider.com/SEC+Filings/Form+8-K+Ubiquiti+…
Premarket down $16.
Rob
2 Likes
On February 13, 2018, the Securities and Exchange Commission (the “SEC”) issued subpoenas to Ubiquiti Networks, Inc. (the “Company”) and certain of the Company’s officers requesting documents and information relating to a range of topics, including metrics relating to the Ubiquiti Community, accounting practices, financial information, auditors, international trade practices, and relationships with distributors and various other third parties. The Company is in the process of responding to the requests and intends to cooperate fully with the SEC.
Based on the inclusion of “metrics relating to the Ubiquiti Community”, I am thinking this is the direct result of Citron Research/Andrew Left and his short attack from back in September. It is quite possible that nothing will come of this and that it could present an excellent buying opportunity, but the timing of when it might pay off could get iffy.
Based on the inclusion of “metrics relating to the Ubiquiti Community”, I am thinking this is the direct result of Citron Research/Andrew Left and his short attack from back in September. It is quite possible that nothing will come of this and that it could present an excellent buying opportunity, but the timing of when it might pay off could get iffy.
I am about to go see if I can discern anything further from the UBNT boards. Upon traveling over there, I immediately note that they now have a ticker in the top right corner that includes numbers for users online, posts today, and total posts. I don’t recall this ticker being present back in September. I think it was likely added as a direct result of the Citron attack.
Link to Ubiquiti Community:
https://community.ubnt.com/
I finally had my “Saul” moment. I sold out last Thursday.
Bought back a much smaller position this morning @ $50.20.
UBNT is still huge in the IT community and getting bigger. Not afraid to own shares even with the SEC issue that will loom overhead for a while.
Brian
Simon Erickson lead advisor of Motley Fool Explorer has this to say
“Not overly concerned about the SEC subpoena to Ubiquiti today. Part of being disruptive involves explaining your accounting practices to regulators. I expect this inquiry relates to how distributor revenue is recognized for leads coming from the UBNT Community. Still long $UBNT.”
https://mobile.twitter.com/TMFInnovator/status/9659746731073…
7 Likes
Part of being disruptive involves explaining your accounting practices to regulators.
We don’t know what will be the outcome of SEC inquiry. But this logic reeks of confirmation bias. This company is a public company for over 6 years and suddenly SEC woke up and realized they are disruptor’s and decided to ask about their accounting? The company maybe disrupting on their technology field what is so disruptive about accounting?
7 Likes
This company is a public company for over 6 years and suddenly SEC woke up and realized they are disruptor’s and decided to ask about their accounting?
In this particular case, it is important to note the short attack that came back in September from Citron Research. Based on the list of things disclosed as being part of the inquiry, it sounds that this SEC inquiry is directly the result of that short attack.
Here is a link to that attack.
http://citronresearch.com/citron-exposes-ubiquiti-networks/
Follow-up on the attack:
http://citronresearch.com/update-questions-ubiquiti-ceo-inve…
The SEC inquiry disclosed today by Ubiquiti may end up being a bit of a bail-out for aiding Andrew Left to exit his short position…along with providing Ubiquiti with a more advantageous buy-back price.
There is also an outside possibility that Robert Pera’s minority co-owners of the Grizzlies are somehow involved in this whole ordeal as part of trying to screw him over in that ownership deal. There was an interesting article on Seeking Alpha back in the fall that discussed some of the connections that one of those 2 guys has (I think it was Kaplan). If anyone happens to be a paying subscriber of Seeking Alpha, I think this link should work for that article:
https://seekingalpha.com/article/4108282-left-citron-boy-cri…
There is also an outside possibility that Robert Pera’s minority co-owners of the Grizzlies are somehow involved in this whole ordeal as part of trying to screw him over in that ownership deal. There was an interesting article on Seeking Alpha back in the fall that discussed some of the connections that one of those 2 guys has (I think it was Kaplan). If anyone happens to be a paying subscriber of Seeking Alpha, I think this link should work for that article:
https://seekingalpha.com/article/4108282-left-citron-boy-cri……
Whoops, I think that was the wrong link (but still a decent article about the short attack).
Here was the one I meant to link:
https://seekingalpha.com/article/4109705-left-lawyers-grizzl…
1 Like
Also, regarding the timing of this inquiry and disclosure, I noted the following article a week or so ago from February 7th. The headline is that every NBA team is now valued in excess of $1B.
https://www.forbes.com/sites/kurtbadenhausen/2018/02/07/nba-…
Coincidental timing? Perhaps so, perhaps not.
1 Like
It is silly to suggest SEC inquiry is motivated to help a short seller or somehow part of a NBA team ownership conspiracy. It is baseless and slippery slope.
9 Likes
It is silly to suggest SEC inquiry is motivated to help a short seller or somehow part of a NBA team ownership conspiracy. It is baseless and slippery slope.
Since the Seeking Alpha article is now behind a paywall, I’ll post a few of the relevant connections (as I am not entirely off my rocker).
Steven A. Kaplan group (SKMG LLC)- 14.22% ownership stake in the Memphis Grizzlies
Daniel Strauss - 14.22% ownership
Robert Pera - 25.6% ownership
From the article:
Kaplan and Strauss both attend NYU School of Law. There are several firms that have been attacked by Citron that have retained the law firm Gibson Dunn following the short attacks. On numerous occasions, Oaktree Capital (co-founded by Steven Kaplan) has been represented by Gibson Dunn. From 1983 to 1993, Steven Kaplan worked for Gibson Dunn.
https://www.oaktreecapital.com/people/bio/steve-kaplan
https://www.linkedin.com/in/stephen-kaplan-38565bb/
https://www.bloomberg.com/research/stocks/private/person.asp…
https://www.commercialappeal.com/story/sports/nba/grizzlies/…
https://bealestreetbears.com/2017/12/05/memphis-grizzlies-bu…
From this last link:
Steve Kaplan or Daniel Strauss (possibly both) have exercised their option to purchase Robert Pera’s shares of the Memphis Grizzlies. Pera can either match the offer and buy out the investor(s), or he must sell.
Some time in the next 90 days the minority owner(s) will announce their price to Pera. The price isn’t based on any previous sales figure. The sale of other teams recently will have an impact on the valuation. The minority interest has 60 – 90 days to make an offer. There’ll be negotiations between both sides during this time to find an equitable price if possible.
New of those guys exercising that option came out on November 30, 2017…so 90 days after the clause was triggered should work out to February 27th or 28th. Now I am even more convinced that this relates to the Grizzlies ownership situation.
5 Likes
You are free to entertain any conspiracy theory. Just make sure, you don’t bet too much money on them.
2 Likes
You are free to entertain any conspiracy theory. Just make sure, you don’t bet too much money on them.
Appreciate the caution. I was considering adding additional $85 2020 call options…but that might actually exceed the price that Pera will need to take Ubiquiti private, so I didn’t chase a bid price that ended up filling for those. I did add to my overall UBNT position with some $70 2020 calls this morning (and some March 2018 $60 calls).
Also, as an aside, the WSJ is looking into the Grizzlies ownership angle of this matter…so we’ll see what happens.
* exceed the price that Pera will need to pay to take Ubiquiti private
Hi Vol,
Would you mind expounding on this a bit further or providing a source?
Also, as an aside, the WSJ is looking into the Grizzlies ownership angle of this matter…so we’ll see what happens.
Much appreciated.
A.J.
1 Like
Would you mind expounding on this a bit further or providing a source?
I passed along some of the same links I’ve posted in this thread to Charley Grant on Twitter, since I saw his name associated with this:
http://blogs.wsj.com/moneybeat/2018/02/20/bad-connection-at-…
My tweets:
https://twitter.com/riddlejT4/status/966061306267815936
Charley subsequently followed me on Twitter.
I’m sure the WSJ won’t run anything unless they have a good source for it.
1 Like
Here is the entire blog post… What specifically you found interesting in this?
For a company that “aims to connect everyone to everything, everywhere” with its high tech communications gear, simple math skills should be assumed. Not so in the Ubiquiti Networks investor relations department.
Ubiquiti jolted its shareholders Tuesday with news that the company and some executives had been subpoenaed by the Securities and Exchange Commission. Shares fell by a quarter. The SEC seems to be interested in lots of stuff, “including metrics relating to the Ubiquiti Community, accounting practices, financial information, auditors, international trade practices, and relationships with distributors.”
Maybe what spurred their interest was the company’s struggles with numbers. Ubiquiti says it is unique because it doesn’t have a sales force, but instead “drives brand awareness largely through the company’s user community.”
The problem is that last fall, Ubiquiti was forced to lower its membership estimates for its user community by about 85%. “Our IR people mixed up user sessions and total users,” CEO Robert Pera, a former Apple engineer who controls the NBA’s Memphis Grizzlies franchise, explained at the time.
The explanation seemed to satisfy Ubiquiti shareholders. The regulators however, seem less impressed
What specifically you found interesting in this?
I found the author name interesting as I follow Charley on Twitter. He is quite of Tesla bear (which I happen to somewhat agree with for the time being as they burn through cash).
The explanation seemed to satisfy Ubiquiti shareholders. The regulators however, seem less impressed
I don’t think there is any denying the dissatisfaction of shareholders now. However, I’ll point to Wouter28 and his post on the auditing of their financials. They’ve already admitted to making a mistake regarding the population of the community to investors. Misdeed. Done. We move on.
Accounting fraud would be a completely different story. Wouter seems to make the case it would be very difficult to pull off, but I’d be interested to hear other dissenting opinions.
A.J.
What??? You mentioned WSJ is looking into Grizzlies angle and the blog post has no mention of that.
1 Like