I think PNC should sell the acquisitions. BlackRock adds to them about $540 of income a year but the investment is worth $9.24 B. They could sell BlackRock and put their money into buying back 126 million shares.
At $7.5 in EPS this year or $4 B you lose $540M of income from Blackrock or now about $3.4 B but you only have 406 M shares or $8.37 a share in earnings. You also allow PNC to increase their leverage since Blackrock is counted punitively against PNC.
Alternatively they could spin BlackRock off to us and we could sell it or do whatever.
Hopefully this question is answered going forward.
Probably more tax efficent to exchange BLK stock for PNC at a ratio of, hypothetically, 3 1/2 to one.
Its a good asset, could also retain some to sell to finance acquisitions. BLK is one of the great
success stories of this generation. Owe it mainly to Larry Fink.
Here is the thing black Rock is a great company but it substantially lowers pnc,'s equity value. You have a business with a market value of 10b earning 500m for PNC or an roe of like 5%. It also hurts pncs leverage . it really adds no strategic value also .
PNC + 20% of black Rock black Rock inside PNC . anyways hopefully its spun off since blk has gone up so much in value it would be nice to get out at the top
If they had $9B to spend they should buy about 400-450M ozs of silver bullion and warehouse it and one up Warren Buffet, who once owned the largest private silver stash in the world. No one knows what really happened in 2005-6, but any intelligent observer will see it was probably all called away because he was writing options for income on the hoard and BOY WAS HE SURPRISED when silver rocketed from $5 to $15 in basically one relatively quick motion.
Hey and before you downvote me, I am being serious here. I bank at PNC lol. PNC could use the silver as collateral to really make some serious moves and they could even write calls against it to generate income and capital gains. The problem is, no one entity has that much silver. Yet.
I don't know about you, but I'm not feeling medium term bullish at all. Maybe Yellen spikes the punch bowl and Dow goes 20k+ but I doubt it, and if it does silver will be $50 anyway on the liquidity and "growth" BS jargon hype and outperform by multiples.
You do know all accounting is FAKE now right? Like we all know CPI PPI unemployment etc is fake data, but now FASB allows fakery in company accounting. And don't forget they are now going to FAKE the GDP numbers by jiggering a statistic or two and falsely boosting the number 3%. Do you think the market will be dumb enough to believe it forever?