Long or Short Capital

Long or Short Capital’s third quarter of fiscal year 2007 closed on July 31st, 2007. After reviewing our financials, we have determined that the quarterly dividend will be at the formula level of $0.80 per a subscriberholder as of 7/31/2007. To qualify, all you need to be is a subscriber, either by XML or E-mail, as of 7/31/2007. If you were not, you will not be eligible.

For more information on how to collect your cash or cash equivalent dividend for Q4, please refer to our Dividend Policy. Given our float of 1216 subscriberstakes (as of 7/31/2007), a 5% growth assumption and our trailing twelve months total of dividends of $3.78 per subscriber, our current capitalization is $241,315 using a dividend discount model.

Top Articles from the Fourth Quarter

1. How to Say All Their Money is Gone
2. Motivated Prostitutes, the Opposite of Lazy Unions
   
3. Zimbambwenomics and Mugabe Efficiency Theory
   
4. If Only Water Wasn’t So Fattening
   
5. The Ring of Greenspan
6. I’m Calling the Top, today. My ten signs
   
7. Vegetable Arbitrage
   

Top Articles from the Third Quarter

1. Four Simple Steps to Becoming a Thousandaire
2. Jacob, Son of Isaac, the First Value Investor
3. Adjusted GPA on a Pro Forma Basis
4. Pomegranate Capital Thinks Women Can Run Money Better Than Men, Is Wrong
5. Crazy Person or Bluetooth Headset?: The Home Game
6. The Market, She’s a Bitch
7. Dogs Can Smell Fake DVDs and Other Malaysian Lies

Top Articles from the Second Quarter

1. Vertizontal Consolidation
2. Stop Global Warming, Make Emissions More Delicious
3. 2×2 Matrix: Less is More
4. Accounting in My Refrigerator
5. Joe Theismann Presents Monday Morning Investing
6. Critical Mass Supplier
7. Kaiser Falcon Eyes

Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for FY’07
Income Statement

Contextual CPC Revenue $861
CPA Revenue $236
Static Ad Revenue $2483
Other Revenue $84
Total Revenue $3668

Cost of Sales $78
SAAP Income $3437

Balance Sheet

Cash $2914
Accounts Receivable $463
Inventory $0.00
Prepaid Marketing/Hosting/Reg $142
Accounts Payable $0

Cash Flow Statement

Operating Cash Flow $3146
Capex $0.00
Dividends $X.00

Performance Metrics

Visits 247,156
Pageviews 509,143
Clicks on ads 1224
Subscribers by Email 195
Subscribers by XML 1021
Technorati Rank 36,949
Inbound Links per Google ~403 sites
Google PageRank 5

Past Results (due to our reliance on SAAP, previous unaudited financial results are not reliable)

Long or Short Capital Q1’07 Results
Long or Short Capital Q2’07 Results
Long or Short Capital Q3’07 Results
Long or Short Capital Q4’07 Results

Long or Short Capital’s fiscal 4th Quarter ended on 7/31/07, and the company reported its results in a press release:

Mr Juggles: “Greetings. We like numbers because they are objective. As the saying goes, opinions can lie, but numbers can’t. So let’s start the call off with some numbers. Number of quarters in Long or Short history with more revenue than Q4 2007? 0. Q over Q revenue growth? 850%. Q over Q traffic increase? 360%. As you are accustomed to hearing, this quarter was our best quarter ever by any metric, even made up ones like Mugabe references per a perf words.

The actions collectively taken in the third quarter, paid off handsomely. If you were to make a list of what we set out to achieve you could probably check off every single thing; we actually tried to do this but we found out that the list we wrote everything down on had been lost. We are working on this, and know that we take keeping track of lists to be among our top focuses in H1’08.

A lot of our subscriberholders have been concerned about our accounting situation and our delayed delivery of our Q and K. Let me tell you, we have been concerned too which is why we have mostly been ignoring the situation and hoping that it would go away. This did not turn out to be an effective solution and we are still having unable to reconcile our trailing quarterly results with our fiscal year results. What we did find out is that this situation is entirely consistent with SAAP, and thus, it is no impediment to filing.

Ssiztah, SSST, our measure of organic traffic, grew 19% sequentially, compared to only a 5% sequential improvement in Q3. Our proprietary “Eyeball Monetization Conversion” ratio, a non-pageview measure of revenue generated per customer, rebounded to $15.56 after dipping to $14.49 in Q3, as we the gains we picked up in text link ads more than offset our losses in referral revenue. Our EMCr increased 110% compared to Q4 2006.

Earnings per subscriberholder was $0.99 and we think the $0.90 to 1.10 level is sustainable. Despite its sustainability, we still expect to beat that going forward. That is how we do. We generated $1209 in revenue for the quarter, and as I mentioned earlier, that was an 850% increase year over year. The upside in our business is largely leveraging traffic growth over our advertising.

We see some additional opportunities for growth in text link ads which are not sensitive to traffic swings, but we expect short term volatility due to operational issues with one of our text link ad suppliers (Text-Link-Ads.com). Their ads are not functioning properly, and the vendor has been unhelpful and disinterested in assisting our tech team in rectifying the issue; our last 5 e-mails have gone unanswered. This is the same vendor who has in the past sold our ads on a discounted basis, without permission, at permanent and unalterable rates.

This pricing strategy of theirs is antithetical to our strategy of planning for future growth. Given their contractual 50% share on the revenue the ads they place generate from our site, this represents a fire sale of valuable site real estate. We are 100% against discounting and have no intentions to be a discount provider of satirical financial research. As such, we are actively exploring discontinuing our relationship with this ad vendor due to the fact that they are “sneaky terrible”.

Long or Short is as ad saturated as we are comfortable with. Our comfort level, in regards to this, is dependent on opportunities for marginal revenue and is, frankly, easily swayed. We do expect a pickup in CPA initiatives as the holiday season approaches, but the form of those initiatives has not firmed yet.

Our subscribership increased from 1012 to 1206. As could be expected, our FCF decreased to $1,026, after last quarter’s timing boosted $1,417. As to the excess cash we had on the balance sheet at quarter end, because of some accounting fraud issues we are finding that the best use of the cash on the balance sheet will almost certainly be on acquiring an appropriately prestigious corporate pen. We are still exploring what corporate pen is most consistent with producing the levels of prestige commeasurate with what Long or Short Capital subscriberholders would expect. Additionally, we expect the accounting fraud issue to have an impact of well under one million [inaudible] and as such, we do [inaudible] to get into it further.

Returning to the metaphor I used on the last call, we were that 7 coming out of college, and we spent Q3 and Q4 exercising, investing in our wardrobe, blonding our hair and not-eating three healthy meals a day. Now we are a 9 and everyone wants us. The question is, what do we do now that we have successfully transitioned? The answer? We embark on a career as a CNBC or Fox Business News reporter or anchor. With our ten cent head and our million dollar body, this is our clear next step and Long or Short is pursuing this to its fullest. We will update you on our efforts in this vein on our next call. Thanks and let me say on behalf of management that we will continue to make ‘Long or Short Equity Ownership Experience. â„¢’ as amazing for you as it is has been for our yacht collection.”

Top Articles from the Fourth Quarter

1. How to Say All Their Money is Gone
2. Motivated Prostitutes, the Opposite of Lazy Unions
   
3. Zimbambwenomics and Mugabe Efficiency Theory
   
4. If Only Water Wasn’t So Fattening
   
5. The Ring of Greenspan
6. I’m Calling the Top, today. My ten signs
   
7. Vegetable Arbitrage
   

Top Articles from the Third Quarter

1. Four Simple Steps to Becoming a Thousandaire
2. Jacob, Son of Isaac, the First Value Investor
3. Adjusted GPA on a Pro Forma Basis
4. Pomegranate Capital Thinks Women Can Run Money Better Than Men, Is Wrong
5. Crazy Person or Bluetooth Headset?: The Home Game
6. The Market, She’s a Bitch
7. Dogs Can Smell Fake DVDs and Other Malaysian Lies

Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for Q4’07
Income Statement

Contextual CPC Revenue $283
CPA Revenue $7
Static Ad Revenue $891
Other Revenue $28
Total Revenue $1209

Cost of Sales $19.55
SAAP Income $1190

Balance Sheet

Cash $2914
Accounts Receivable $463
Inventory $0.00
Prepaid Marketing/Hosting/Reg $142
Accounts Payable $0

Cash Flow Statement

Operating Cash Flow $1032
Capex $0.00
Dividends $X.00

Performance Metrics

Visits 77,671
Pageviews 157,529
Clicks on ads 491
Subscribers by Email 195
Subscribers by XML 1021
Technorati Rank 36,949
Inbound Links per Google ~403 sites
Google PageRank 5

Past Results (due to our reliance on SAAP, previous unaudited financial results are not reliable)
Long or Short Capital Q1’06 Results
Long or Short Capital Q2’06 Results
Long or Short Capital Q3’06 Results
Long or Short Capital Q4’06 Results
Long or Short Capital Q1’07 Results
Long or Short Capital Q2’07 Results
Long or Short Capital Q3’07 Results

Also here is a look at our Google Spreadsheet Financials spread out quarterly. As you can see, we strictly adhere to SAAP.

Dear Alan,

During your time at the Fed, you were famously circumspect. Now you can’t shut up. Please do so.

Yesterday, I was reading an article on Bloomberg detailing a recent talk you gave. You made a lot of points, probably a few too many. Let’s address a few.

• “Obviously there is a limit to the extent that obligations to foreigners can reach,” Greenspan said in a speech in Washington yesterday. The dollar’s decline to its lowest since 1997 may be “an indication America is approaching this limit.”

  Thanks for the crack analysis, Alan. I don’t think I could have figured out that foreigners have finite resources. Also, I thought the dollars weakness might be somewhat related to the fact that you have encouraged rampant inflation by 1) artificially suppressing interest rates and 2) rigging the government statistics to make sure said inflation didn’t appear to the public other than in their weekly bills and (lack of) savings accounts.

• Greenspan first predicted that investors abroad would tire of financing the U.S. current-account deficit in a Nov. 19, 2004, speech in Frankfurt. “A diminished appetite for adding to dollar balances must occur at some point.”

  Well thanks for addressing this issue while you still had some clout.

• Greenspan also said yesterday that the August surge in the cost of credit following increased defaults on U.S. subprime mortgages was an “accident waiting to happen,” given that investors were pricing risk too cheaply.

  Again, Alan, I think you’re trying to rewrite history here, no? Were you not on watch while interest rates were held down. Does the Fed not have oversight of the banking and lending system? So I guess you are pretty much responsible for not forcing lenders to focus on credit quality.

• The former Fed chief said central banks increasingly appear to have “lost control” of market interest rates beyond three to five years of maturity. Before departing the central bank in January 2006, he said the lack of increase in long-term Treasury note yields during a period of rising Fed rates was a “conundrum.”

  Alan, dude, this is not a conundrum. You don’t affect long-term interest rates any more because the markets don’t believe you. You are the central banker who cried wolf.

In conclusion, I would appreciate it if you would shut up, Alan. Ben has a hard enough job and is mucking it up enough already without you wading in every three days to provide running commentary. Your sonorous book has compensated you richly. Please retire to somewhere secluded, stocked with Ayn Rand pinups and preferably without a phone.

Sincerely,
Mr Juggles
CEO and Head Commissary
Long or Short Capital

Jack Donaghy: Lemon, I’m impressed! you’re starting to think like a businessman.
Liz Lemon: A businesswoman.
Jack Donaghy: I don’t think that’s a word.
From 30 Rock

Past Quotes Entirely Relevant to Investing

Yes, I realize that a sieve is used to separate desired objects from unwanted material. However, it also has colloquial meanings: “in metaphor and simile, sieve may often be used to refer to things that are leaky…In particular, in hockey, a goaltender who lets a lot of goals through is sometimes compared to a sieve.” This is is a vehicle people that people should put their money into? A SIeVe?

Recommendation: Do not invest in vehicles (SIVs) that are named after leaky containers or goalies who allow too many pucks into the net. That is dumb. Do not even ask about Super SIeVes. And we won’t mention anything about SLUT either.

NASDAQ stocks, especially those with high betas, fell last Thursday because of a JPMorgan equity research note expressing caution about Baidu’s (NASDAQ: BIDU)3Q revenue estimates. Baidu, which had been trading up several percent at an all-time high of $359, quickly dropped 10%, later closing at $309. That would seem reasonable except:

• Baidu took the rest of the market with it. Companies like Google, Apple, Research in Motion, and Amazon.com all went from being positive on the day to deeply negative before rebounding slightly. Keep in mind that Baidu accounts for $~66mm of quarterly revenue (i.e., nothing) and yet it is moving hundreds of billions of market cap a continent away!
• The same JPMorgan analyst who reduced his Baidu estimates today had upgraded Baidu two weeks ago and initiated with a $400 price target. In a report titled Billions and Billions, he had recommended buying a stock with a 34x 2010E EPS multiple

Carelessness. I lost my one true love. I started drinking. The first thing I know, I’m in a card game. Then I’m in a crap game. I wake up in a pool hall. Then this big Mexican lady drags me off the table, takes me to Philadelphia. She leaves me alone in her house, and it burns down. I wind up in Phoenix. I get a job as a Chinaman. I start working in a dime store, and move in with a 13-year-old girl. Then this big Mexican lady from Philadelphia comes in and burns the house down. I go down to Dallas. I get a job as a “before” in a Charles Atlas “before and after” ad. I move in with a delivery boy who can cook fantastic chili and hot dogs. Then this 13-year-old girl from Phoenix comes and burns the house down. The delivery boy — he ain’t so mild: He gives her the knife, and the next thing I know I’m in Omaha. It’s so cold there, by this time I’m robbing my own bicycles and frying my own fish. I stumble onto some luck and get a job as a carburetor out at the hot-rod races every Thursday night. I move in with a high school teacher who also does a little plumbing on the side, who ain’t much to look at, but who’s built a special kind of refrigerator that can turn newspaper into lettuce. Everything’s going good until that delivery boy shows up and tries to knife me. Needless to say, he burned the house down, and I hit the road. The first guy that picked me up asked me if I wanted to be a star. What could I say?
Bob Dylan on how he chose his career

Past Quotes Entirely Relevant to Investing

Everything’s out the window. Tomorrow’s one game. Everything in the last two weeks is in the past and now we’ve got to focus on beating the Padres for a chance to go to the playoffs.
Matt Holliday of the Colorado Rockies, on tomorrow’s one game playoff against the Padres

Past Quotes Entirely Relevant to Investing

Pfizer’s (NYSE: PFE) new anti-smoking pill, Chantix, has experienced the fastest sales ramp of any Pfizer drug. Chantix doesn’t contain nicotine; instead, it targets the brain receptors that make smokers crave nicotine. But there are some concerns that the drug causes sleep disruption and abnormal dreams. Here is one example:

The second night, I dreamed I was dating a dinosaur, about eight feet tall and very cute, as dinosaurs go. He lived in a little grotto in the woods near my father (Dad actually lives in a city), and the dream included odd details such as us planning a trip to the seaside and me trying to decide whether to pack a bikini or one-piece.

And here is another:

I dreamed I and two other women were being held hostage by Wild Bill Hickock and his gunslinger pals in a room above a saloon in the Old West. I concocted an escape plot that involved me slitting the throat of one of his henchmen, hiding the body, packing up our stuff and trying to sneak out.
Unfortunately, I also suggested we all go to the bathroom first — as if there were “bathrooms” back in the 1870s — and we got caught by Wild Bill himself, who came back unexpectedly early from a night of gambling.

Further due diligence reveals that these dreams are not “abnormal,” they are actually pretty sweet hallucinations that would normally require at least a hit or two of acid.

Recommendation: LoS proprietary research indicates that the market overlap of smokers and those desiring dinosaur-makeout dreams is quite high. Long Pfizer, assuming they create a separate marketing campaign to target this segment.

The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.
Alan Greenspan

Past Quotes Entirely Relevant to Investing

Mr. Bernanke was afraid of ratecuts
He packed his briefcase and smacked his wife’s butt
He waited his whole damn life to make that cut
And as the economy crashed down he thought
“Well isn’t this nice…”
And isn’t it ironic… don’t you think

It’s like pain on what would’ve been bonus day
It’s a free ride when Greenspan never paid
It’s the good advice that you just didn’t take
Who would’ve thought… it figures

Dear Investors,

Following our analyst report on E*Trade yesterday, the stock traded down 7% (and probably still has room to go). Our report uncoveerd the hidden underbelly of E*Trade. LoS provides timely, relevant and actionable information which can, has and will move markets. We aren’t your ordinary sell-side or independent investment advisor, which is precisely why we provide value.

You’re Welcome,
Long or Short Capital Management

If there are no stupid questions, then what kind of questions do stupid people ask? Do they get smart just in time to ask questions?
Scott Adams

Past Quotes Entirely Relevant to Investing