SubscribeEconomists Clarke and Dawe: Too True to be Funny
March 22, 2008
March Media Roundup2 - Andrew Horowitz
March 22, 2008
Some of the stories that Andrew/TDI appeared in for the week:
Zecco/BlogTalk Radio Discussion with Tim Sykes
3 Radio interviews this week…. Read more
Naked Shorts - Check it Out
March 20, 2008
Here are a few interesting places to check out regarding:
The Worst Stock for 2007: Overstock
Dec 21, 2006 … How could I let a “Worst Stock for 2007″ theme pass without … the stock’s fall on the short/naked short/hedge fund/Sith Lord/crooked …
***PRESENTATION : The Dark Side of the Looking Glass (full)***
Manipulation and markets - The Boston Globe
Jan 31, 2006 … Investors deserve more information about those problems, and regulators who view the worst of the naked short offenders as real …
Dealbreaker - A Wall Street Tabloid - Business News Headlines and …
The funds are the worst performers this year among 10 hedge fund strategies tracked by the … Take that anti-naked short-selling conspiracy theorists! …
The VISA IPO Paradox: IPO or Bailout?
March 19, 2008
The VISA (V) IPO is coming and it is going to be BIG. A few days ago, I speculated here that the IPO may be pushed back as the markets were in no mood for an IPO even as few have been brought to market of late. It was, and is, not the most opportune time as investor’s are frazzled and institutions are disquiet during what is shaping up to be a historic and cataclysmic economic event born out of our general debauched view of leverage. (Barry Ritholtz: thanks for the Thesaurus idea- I hope I didn’t embarrass myself!)
So, what does that mean for Visa? If you look at the proceed distribution, according to Dealbook, it is rather interesting to note that $1.25 billion goes to:
Even so, the offering will generate a windfall for Visa’s thousands of member banks, which own the company. JPMorgan Chase is expected to reap about $1.25 billion, while Bank of America, National City, Citigroup, U.S. Bancorp and Wells Fargo are likely to receive several hundred million dollars each.
Wall Street firms, in the meantime, stand to collect upward of $500 million in underwriting fees from the sale.
At the same time over 75% of the recent IPOs that had been scheduled have been postponed or cancelled as the market is not capable of capitalizing new issues when it it is so close to margin calls. VISA’s get-it-to-market-and-fast attitude for their IPO is a flagrant and obvious bailout for a few of the institutional beneficiaries. Time is the ultimate enemy in this mêlée against insolvency. The money is needed and it is needed NOW!
So, the VISA IPO is a GO!; no matter how much better it would have priced if times were different. I think that with the potential for insolvency increasing, postponing could be a prove disastrous for one or two of the member banks desperately needing a fast infusion of cash to continue business as “usual.”
(V) (BAC) (NCC) (JPM) (C) (USB) (WFC)
Disclosure: Clients of Horowitz & Company clients hold positions of BAC as of the date of publish.
Lehman: Read Between the Lines
March 18, 2008
In the earnings news today, Lehman (LEH) Reports Q1 (Feb) earnings of $0.81 per share, $0.09 better than the First Call consensus of $0.72; revenues fell 30.5% year/year to $3.51 bln vs the $3.35 bln consensus. What is meant by the word certain?
LEH says liquidity pool of $34 bln and unencumbered assets of $64 bln, with an additional $99 bln at regulated entities, at quarter end. Net revenues for the first quarter of fiscal 2008 reflect negative mark to market adjustments of $1.8 bln, net of gains on certain risk mitigation strategies and certain debt liabilities.
Now for the bad news:
The Firm’s pre-tax margin was 18.9% for the first quarter of fiscal 2008, compared to 33.7% for the first quarter of fiscal 2007.
Shareholders are not going to be happy with this:
Return on average common equity was 8.6% for the first quarter of fiscal 2008, compared to 24.4% for the first quarter of fiscal 2007.
Still looking rough:
Return on average tangible common equity was 10.6% for the first quarter of fiscal 2008, compared with 29.9% for the first quarter of fiscal 2007.
That is a relief. So, if we calculate the value based on current accounting principals, the stock should be a buyout candidate close to… $3, $4 or maybe $50?:
Book value per common share was $39.45.
The point is that do we really think that any of this matters right now? I can’t make heads or tails of it, can you?
(from briefing.com)
Disclosure: Clients of Horowitz & Company do not hold positions mentioned as of the date of publish.
TDI Podcast RSS
-
