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KFN Message Board

  • tyc3721 tyc3721 Feb 26, 2010 1:51 PM Flag


    Question now is are we already priced into what judging by the last few days is anticipation of blowout earnings. HMMMM. Hold to close on MONDAY?

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    • we wont close above $7 today...trouble brewing ahead?

    • So much for holding until the eod. but it would be nice to see this run with the mkt for once. glta

    • A lot lead up to the problems in 2008 and our government was the cause more than the banks. From 1995 to 2008 both parties are to blame. From the clinton adm bringing in the banks and telling them to give loans to people who couldn't afford them which forced the banks to package the debt, not to mention the government laxing rules of boroowing capital from 10 to 1 to s much as 40 to 1..., also the removal of Glass Steigle, the added problems with mark to market, added cost of the regulations after enron (I think that was grand rudman but could be wrong) and the final stab being the SEC's removal of the uptick rule giving the shorts the ability to control the price of a share all the way down which by the way reduced a companies market cap which caused the rating agencies to down grade a company (banks and Insurance) and force them to raise capital even if they had solid cash flow to run operations and in the case of insurance companies having their ratings downgraded below triple A, not being able to write any new business. The recent uptick rule this week should help some but falls well below what is really needed and will still take 60 days to be activated. Then to top it off panic hit and redemptions were called in by big money and thus why you saw stock prices of very good companies hit bottom last March 9-10th..., to answer your question.

    • Why sell? The march 7.50 call options could be sold for 0.25. Even if it goes to 8 you don't miss much. I hope it gets called away so that I can buy it again at 7 during the next correction

    • andymaxwell Feb 27, 2010 3:20 PM Flag

      It just shows you what the market mentality was toward investment grade financials in Late 2008. It apears that political campaining had something to do with it. But how could so many solid companies like KKR go so low. And who were the Mr. Bigs that were selling and what did they do with their cash afterward?

    • Yes, in Jan, in conjunction with convert deal, they announced that 1 of the 2 CLOs out of compliance had come back in. I don't think out of realm of possibility that the remaining CLO out of compliance comes back very soon. I think they said on the last conference call the CLO then out of compliance when back in compliance (and now in compliance with its OC test) would generate about $40 mm in cash when it came back into compliance. I agree with the previous poster that book value is becoming less meaningful. This will get valued as a multiple of earnings going forward and earnings are due to move significantly higher. Also, don't forget any move upwards in rates will increase the interest earned on the Company's loans. LIBOR can't get much lower than .25%. Put differently, KFN is a great inflation hedge. Look for the sell side to get back on the KFN train after disappearing when the stock blew up in 2008. Always count on the sell side to get back on board when it's obvious everything is okay.

    • Wasnt one of the two major CLOs already in compliance when they preannounced?

    • There will not be blowout earnings on Q4 if that is what your expecting. They are taking that huge loss over this earnings report for Q4. May even be a loss, but factored in already. Was announced in January I think. What would be nice is a better than expected few cents up.