7/31/2019 T2 Partners March Letter

1/5

The GM Building, 767 Fifth Avenue, 18th Floor, New York, NY 10153

Whitney R. Ti lson and Glenn H. Tongue phone: 212 386 7160Managing Partners fax: 240 368 0299

www.T2PartnersLL C.com

April 4, 2011

Dear Partner,

Our fund declined 4.3% in March vs. 0.0% for the S&P 500, 0.9% for the Dow and 0.0% for theNasdaqvs. up 5.9% for the S&P 500, 7.1% for the Dow and 5.0%for the Nasdaq.

Our weak performance was driven primarily by the same two stocks (discussed below) thatdr24.1%) and Berkshire Hathaway (-4.6%). Partially offsetting these losses were Howard Hughes

Corp. (up 22.3%), Seagate (13.4%), and Grupo Prisa (7.5%).

Our fund was profitable on the short side during the month thanks to Barnes & Noble (-31.4%),Boyd Gaming (-12.3%), MBIA (-10.4%) and St. Joe (-6.4%). These gains were partially offsetby OpenTable (19.7%) and Lululemon Athletica (14.8%).

Deviating from the Crowd is due in part to some mistakesne our best to identify,acknowledge and correct these mistakes.

, especially last month,is our investment strategy, which is rooted in deviating from the crowd with contrarian bets. the only way to outperform the market over the long term, but it also carries with it the riskindeed, the certaintythat there will be periods during which one underperforms the market,Jean-Marie Eveillard

r to be right and even harder

will triple over the next 3-5 years the stock can fluctuate quite widely, which can help (as in February) or hurt (as in March) ourshort- positions we hold, bothlong and short, but sometimes it takes time for our investment theses to play out.

This letter brought to you by MarketFolly.com

http://www.marketfolly.com/http://www.marketfolly.com/http://www.marketfolly.com/

7/31/2019 T2 Partners March Letter

2/5

-2-

Berkshi re HathawayBerkshire dropped 2% on the last day of the month due to the resignation of David Sokol, whodisappointed by the news for two reasons: 1) We think Sokol is a first-an excellent job managing MidAmerican Energy, Johns Manville and NetJets; and 2) We sharethe concerns expressed by many others about the troubling appearance of his stock trades in

Lubrizol.

That said, as investors in Berkshire Hathaway, what we really care about intrinsic value, which we think remains intact. Buffett is at the top of his game and is inexcellent continue to run Berkshire for at leastthe next five years, if not the next 10. Thus, the resignation of a potential successor at this pointis almost irrelevant. In any case, the company has a deep bench of seasoned managers. Themedia frenzy around Sokol will soon pass and investors will then refocus on what really matters:the $1 billion per month (and growing) that is pouring into Omaha for Buffett and Munger toallocate.

nearly $170,000/A share (vs. www.tilsonfunds.com/BRK.pdf.

IridiumIridium fell during the month for two reasons: it reported quarterly earnings that, while strong,were apparently lower than what some analysts had expected, and a large inside shareholder soldfour million shares, which knocked the stock down nearly 10% in the last two days of the month.Regarding the latter, the seller was Syndicated Communications, a private equity fund that hadowned Iridium as a private company and sold it to the Greenhill SPAC, thereby taking thecompany public. We expected the sale and are glad that this overhang on the stock is now gone.

demonstrates t need anyincremental proceeds to fund its operations, which is a positive in our view.

Adjusted EBITDA was up 40% year over year, thanks to 16,000 new subscribers. For the full-year, subscribers increased 25% to 427,000. Iridium affirmed its 2011 guidance, which reflects 20% subscriber growth and adjusted

EBITDA growth of approximately 16%.

Apparently some analysts were disappointed by these results, but .

performance in the last column:

http://www.tilsonfunds.com/BRK.pdfhttp://www.tilsonfunds.com/BRK.pdfhttp://www.tilsonfunds.com/BRK.pdf

7/31/2019 T2 Partners March Letter

3/5

-3-

Ini tial 2010Guidance

UpdatedGuidance , Q2

UpdatedGuidance , Q3

ReportedNumbers

Total Billable Subscriber Growth 10-15% 20%+ Approx. 25% 24.9%

Commercial Service Revenue Growth 10-12% 12%+ 12%+ 11.2%

Government Service Revenue Growth 3-5% 5%+ 8-10% 9.8%

Equipment Revenue Growth single digit mid to highsingle digit

mid to highsingle digit

8.0%

Operational EBITDA $145-155M At least $150M $155-160M $159M

In summary, the company increased its guidance throughout the year and then delivered on thelast guidance it gave (nitpickers might say they missed Commercial Service revenue growth, butby less than 1%).

Our view of Iridium is unchanged and we continue to believe that the stock is deeplyundervalued.

Q1 Conference CallOur Q1 conference call will be next Tuesday, April 12th from noon-1:30pm. The call-in numberis (712) 432-0075 and the access code is 781636#.

ConclusionIn their latest Kiplingerscolumn,A Look at , John Heins and Whitney write about

Thank you for your continued confidence in us and the fund. As always, we welcome yourcomments or questions, so please dont hesitate to call us at (212) 386-7160.

Sincerely yours,

Whitney Tilson and Glenn Tongue

The unaudited return for the T2 Accredited Fund versus major benchmarks (including reinvesteddividends) is:

March Year-to-Date Since Inception

T2 Accredited Fundnet -4.3% -3.1% 176.3%

S&P 500 0.0% 5.9% 34.0%

Dow 0.9% 7.1% 77.4%NASDAQ 0.0% 5.0% 31.1%Past performance is not indicative of future results. Please refer to the disclosure section at the end of this letter. The T2Accredited Fund was launched on 1/1/99.

Click here to read more hedge fund letters on MarketFolly.com

http://www.kiplinger.com/columns/discovering/archives/a-look-at-buffetts-heir.htmlhttp://www.kiplinger.com/columns/discovering/archives/a-look-at-buffetts-heir.htmlhttp://www.kiplinger.com/columns/discovering/archives/a-look-at-buffetts-heir.htmlhttp://www.kiplinger.com/columns/discovering/archives/a-look-at-buffetts-heir.htmlhttp://www.marketfolly.com/http://www.marketfolly.com/http://www.marketfolly.com/http://www.marketfolly.com/http://www.marketfolly.com/http://www.kiplinger.com/columns/discovering/archives/a-look-at-buffetts-heir.html

7/31/2019 T2 Partners March Letter

4/5

-4-

T2 Acc redi ted Fund Performance (Net) Since Inception

-40

-20

0

20

40

60

80

100

120

140

160

180

200

Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

(%)

T2 Acc redi ted Fund S&P 500

T2 Acc redi ted Fund Monthly Performance (Net) Since Inception

T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P T2 S& P

A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500 A F 500

J anuary 7.8 4.1 -6.3 -5.0 4.4 3.6 -1.8 -1.5 -5.5 -2.6 4.7 1.8 1.1 -2.4 1.9 2.7 2.4 1.7 1.9 -5.9 -3.6 -8.4 -1.6 -3.6 -2.8 2.4

Februar y -2.9 -3.1 6.2 -1.9 -0.6 -9.2 -1.1 -2.0 2.9 -1.6 7.0 1.5 2.1 2.0 -3.1 0.2 -3.3 -2.1 -6.9 -3.3 -8.9 -10.8 7.3 3.1 4.1 3.4

M arch 4.1 4.0 10.3 9.8 -2.6 -6.4 3.0 3.7 1.4 0.9 3.9 -1.5 3.9 -1.7 3.9 1.3 -0.8 1.1 -2.3 -0.5 2.9 9.0 4.6 6.0 -4.3 0.0

A pril 2.1 3.7 -5.1 -3.0 5.1 7.8 -0.2 -6.0 10 .5 8.2 2.4 -1.5 0.6 -1.9 2.2 1.4 4.4 4.6 -0.9 4.9 20 .1 9.6 -2.1 1.6

M ay -5.

7 -2.5 -2.

8 -2.0 1.

8 0.6 0.

0 -0.8 6.

6 5.3 -1.

4 1.4 -2.

6 3.2 1.

8 -2.9 2.

5 3.3 7.

9 1.2 8.

1 5.5 -2.

6 -8.0

June 2.2 5.8 4.1 2.4 4.6 -2.4 -7.3 -7.1 2.9 1.3 0.1 1.9 -3.1 0.1 -0.2 0.2 -3.0 -1.5 -1.2 -8.4 -5.0 0.2 4.5 -5.2

July -0.7 -3.2 -3.6 -1.6 -1.1 -1.0 -5.0 -7.9 2.3 1.7 4.6 -3.4 0.5 3.7 -0.9 0.7 -5.4 -3.0 -2.5 -0.9 6.8 7.6 3.5 7.0

Augus t 4.1 -0.4 5.4 6.1 2.5 -6.3 -4.3 0.5 0.4 1.9 -0.9 0.4 -3.2 -1.0 2.9 2.3 1.7 1.5 -3.3 1.3 6.3 3.6 -1.5 -4.5

Septembe r -3.3 -2.7 -7.2 -5.3 -6.1 -8.1 -5.4 -10.9 1.7 -1.0 -1.6 1.1 -1.5 0.8 5.0 2.6 -1.1 3.6 15 .9 -9.1 5.9 3.7 1.7 8.9

Octobe r 8.1 6.4 -4.5 -0.3 -0.8 1.9 2.8 8.8 6.2 5.6 -0.4 1.5 3.5 -1.6 6.3 3.5 8.2 1.7 -12 .5 -16.8 -1.9 -1.8 -1.7 3.8

Nov embe r 2.8 2.0 -1.5 -7.9 2.3 7.6 4.1 5.8 2.2 0.8 0.8 4.0 3.1 3.7 1.9 1.7 -3.6 -4.2 -8.9 -7.1 -1.2 6.0 -1.9 0.0

De ce mbe r 9.8 5.9 2.3 0.5 6.5 0.9 -7.4 -5.8 -0.4 5.3 -0.2 3.4 -1.3 0.0 1.4 1.4 -4.3 -0.7 -4.0 1.1 5.5 1.9 0.5 6.7

YT D

T O T A L31 .0 21 .0 -4.5 -9.1 16 .5 -11.9 -22.2 -22.1 35 .1 28 .6 20 .6 10 .9 2.6 4.9 25 .2 15 .8 -3.2 5.5 -18.1 -37.0 37 .1 26 .5 10 .5 15 .1 -3.1 5.9

1999 2000 2001 2002 2003 2004 20112005 2006 2007 2008 2009 2010

Note: Returns in 2001, 2003, and 2009 reflect the benefit of the high-water mark, assuming an investor at inception.

7/31/2019 T2 Partners March Letter

5/5

-5-

T2 Accredited Fund, LP (thn January 1, 1999. The Fundsinvestment objective is to achieve long-term after-tax capital appreciation commensurate withmoderate risk, primarily by investing with a long-term perspective in a concentrated portfolio ofU.S. stocks. In carrying out the Partnerships investment objective, the Investment Manager, T2Partners Management, LLC, seeks to buy stocks at a steep discount to intrinsic value such that

there is low risk of capital loss and significant upside potential. The primary focus of theInvestment Manager is on the long-term fortunes of the companies in the Partnerships portfolioor which are otherwise followed by the Investment Manager, relative to the prices of their stocks.

There is no assurance that any securities discussed herein will remain in the Funds portfolio atthe time you receive this report or that securities sold have not been repurchased. The securitiesdiscussed may not represent the Funds entire portfolio and in the aggregate may represent only asmall percentage of an accounts portfolio holdings. It should not be assumed that any of thesecurities transactions, holdings or sectors discussed were or will prove to be profitable, or thatthe investment recommendations or decisions we make in the future will be profitable or willequal the investment performance of the securities discussed herein. All recommendations within

the preceding 12 months or applicable period are available upon request.

Performance results shown are for the T2 Accredited Fund, LP and are presented net ofmanagement fees, brokerage commissions, administrative expenses, other operating expenses ofthe Fund, and accrued performance allocation or incentive fees, if any. Net performanceincludes the reinvestment of all dividends, interest, and capital gains. Performance for the mostrecent month is an estimate.

The fee schedule for the Investment Manager includes a 1.5% annual management fee and a 20%incentive fee allocation. For periods prior to June 1, 2004, the Investment Managers feeschedule included a 1% annual management fee and a 20% incentive fee allocation, subject to a

10% hurdle rate. In practice, the incentive fee is earned on an annual, not monthly, basis orupon a withdrawal from the Fund. Because some investors may have different fee arrangementsand depending on the timing of a specific investment, net performance for an individual investormay vary from the net performance as stated herein.

The return of the S&P 500 and other indices are included in the presentation. The volatility ofthese indices may be materially different from the volatility in the Fund. In addition, the Fundsholdings differ significantly from the securities that comprise the indices. The indices have notbeen selected to represent appropriate benchmarks to compare an investors performance, butrather are disclosed to allow for comparison of the investors performance to that of certain well-known and widely recognized indices. You cannot invest directly in these indices.

Past results are no guarantee of future results and no representation is made that an investor willor is likely to achieve results similar to those shown. All investments involve risk including theloss of principal. This document is confidential and may not be distributed without the consentof the Investment Manager and does not constitute an offer to sell or the solicitation of an offerto purchase any security or investment product. Any such offer or solicitation may only be madeby means of delivery of an approved confidential offering memorandum.