What we said: "There was another mattress retailer called Heilig-Meyers that was run by an accountant. Most accountants are just bean counters—they aren't experienced businesspeople and they don't understand the business too well. This accountant figured, 'Well, if the numbers work like this, let's just multiply and the outcome will look like this.' In several years he went up to 787 stores, and over a short period of time the company went from AAA to liquidation. There was no reorganization. That's kind of where I see Mattress Firm doing with the 700 stores now... just too big and the cost structure is too expensive."

What happened: Mattress Firm filed for bankruptcy in October 2018.

What we said:

Special situation equity.  No debt, $120 million cash, $86 million market cap, deeply negative enterprise value.  Yet this company is close to reaching profitability, has well-regarded products and is strongly positioned in an oligopoly, non-cyclical business (breast implants).  New CEO is a fantastic manager, having turned around Neutrogena (sold to Johnson and Johnson), Revlon and founding a pharmaceutical company later sold to Valeant.

Thanks for the Mammaries
Full Presentation

What happened:  On February 8, 2016—two months after the publication of our research—Sientra announced that it would resume sales of its breast implants.  Shares reached $25, 6x our cost basis.

What we said:

Austal has over US$300 million of cash to collect from current backlog and the stock boat sale. For a net price of under $275 million an acquirer can own all of Austal’s intellectual property, its three state of the art shipyards and assorted land, soon-to-be-awarded servicing business, as well as further upside from more Navy orders. Austal is a bargain even ignoring all the cost savings that an acquirer could realize.

Full Presentation

What happened:  Shares of Austal increased 6x our original cost basis as a result of operational improvements and numerous contract wins we foresaw.

What we said:

Q-Free presentation (incomplete) 

Q-Free's customer for the Jakarta ELE project is likely to receive financing from EksportKreditt Norway. In the two years since the contract was granted, investor sentiment has shifted from enthusiasm to depression. Alexander Hansson, son of Nordic American Tankers' CEO and a speculator, bought shares at NOK 22. He recently capitulated, disappearing from the top list of shareholders as QFR shares collapsed to NOK 12.

What happened: Before we could finish our presentation EksportKreditt committed to finance the ELE project. Q-Free shares rose 25% in a single day.

What we said:

Ashford University is likely to achieve accreditation from the WASC in July 2013. BPI shares are priced as though Ashford will not receive WASC accreditation and will instead have to comply with HLC's substantial presence requirement. While accreditation discussions are ongoing BPI's lawyers have advised against a share buyback, and BPI is trying to project an image of contrition rather than bravado. Under no such restrictions, we are long call options and short puts.

What happened: On July 11 BPI shares rose 25% after Ashford University received accreditation from the WASC. Our call options tripled; our puts became worthless.

What we said on October 9, 2012:

D.E Master Blenders 1753 full presentation

We sent this presentation to Bart Becht, Chairman of the Investment Committee of JAB Holdings in February 2013. 

What happened: In March 2013, JAB Holdings announced its intention to buy D.E Master Blenders for €12.75, 40% higher than our initial purchase price.

What we said on September 4, 2012:

Digital Garage full presentation

Digital Garage trades at a 22% discount to its publicly traded stake in Kakaku (2371:JP), which is a fast-growing business at a fair price. The market ascribes a negative value to DG’s Twitter stake, which we believe to be worth as much as $160 million, and its Veritrans payment unit. The stock could double and it would still be cheap.

What happened: From our initial purchase price of ¥125,000, Digital Garage shares rose to ¥600,000 as investors began to anticipate Twitter's IPO.

What we said on September 1, 2011:

We believe that the ADSs of Mahindra Satyam are misunderstood and mispriced. Early next year, the ADSs will be canceled and converted to India-traded shares (which trade at a 5% premium at current exchange rates). Another catalyst is Satyam's impending takeover by Tech Mahindra. Satyam has scored contract wins and partnerships with major firms such as EMC, Oracle and Mastercard. Earnings are growing quickly and ROE is now over 30%. This is no longer a turnaround story with fleas. This is an opportunity to buy one of India's leading businesses before it is re-rated as a growth story. Satyam trades at just 1.6x FY2011 sales vs. 4-6x FY2011 for other Indian IT companies.

What happened: Tech Mahindra acquired the rest of Satyam. Shares rose over 60% in one year.

What we said on January 5, 2012:

Serta has been perceived as a low-quality mattress producer. This is changing as it rolls out iComfort, a direct competitor to TPX's line. Our price target is $45.

What happened: In April 2012 Tempur-pedic posted disappointing sales and earnings, lowering guidance for the remainder of 2012. Shares collapsed from a high of $87 to $20, or 75%.

What we said: 

Sales of PC keyboards and mice will decline severely over the next decade, regardless of what happens to the general economy. Laptop computers and tablets have gotten both cheaper and more capable. Even in emerging economies such as India and China, PC makers are focused on making and marketing cheap laptop computers. It isn’t hard to imagine that 10 years from now Logitech’s main customers will be enterprises, because they will be the last ones buying desktops. I am sure that Logitech's sales numbers will not miraculously bounce back… they are guaranteed to trend lower.

What happened: From the date of my blog post, LOGI shares declined from $21 to $7, a loss of 66%.