I have to admit that I am a bit befuddled and now definitely concerned. I have been in Medallion for a few years now. I recently retired, took a lump sum distribution for my company pension, and took a hunk (20%) of the distribution and bought TAXI on June 9 at $13.50. As the price cratered I bought more, naively thinking that the price would shortly rebound to the norm. It's only been two weeks, so time will tell.
I am aware of the Uber threat (real or perceived). I am aware of the Russell exclusion (the share prices of other BDCs have not plunged) . I note that the Short interest at 5/31 has ballooned from 12/31/2013 levels by more than a factor of three.
Company performance as reported in the financial reports has been very good. Market interest rates are low or lower and per the FED will remain low-- one would think that a subset of yield driven investors would be buying into the TAXI opportunity even given the known risks.
The Company is quiet. If something were amiss, the Company would issue a statement.
My best guess is that the next Short Interest report at June 15 (to be released on June 24) will show a significant increase. Why, I don't know. Is it fueled by early investors in Uber who are sitting on $billions in newly created value? It would only take modest $millions of the $billions to squeeze Medallion.
Or, does the market know that there is a problem brewing in the asset portfolio of Medallion? Or, is it simply that a large TAXI stockholder wants out, at any cost, and few want in?
It would be somewhat reassuring if the Company publicly confirmed that they are not aware of anything driving the weakness in the share price. In retrospect, I guess my purchases can be viewed as "buying when there is blood in the streets". It remains to be seen whether there will be more blood and how much of that blood is mine.
Sit tight toe_49. It will be expensive for the shorts to stay short at dividend time. They have to pay out the dividend. Don't worry about Uber, etc.; Minimal effect in NYC. Regardless, TAXI loans on medallions are covered by more than a 2.5 to 1 ratio according to the most recent conference call. Does anyone expect Medallion values to fall more than 60%? Shorts look like they may have run out of steam yesterday. The stock fell considerably to a new low and then climbed all the way back to close positive, and It is up this morning.
This is a finance company. Uber really has no effect on the financial performance of this company. What is going on is a misperception of that fact and shorts (with the momentum) jumping on it. This will reverse once this reality sets in (no later than the next earnings report). In the meantime, this stock is a super bargain at this price.