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Novation Companies, Inc. Message Board

  • carolinaswede carolinaswede Mar 3, 2011 10:09 AM Flag

    Note from NOVS S-4A


    S-4A shows StreetLinks proforma revenue for 2011 of $150M x gross margin of 16%. $24M + Advent + Portfolio.

    With 90M shares after NovaStar's recapitalization, they are looking at .27 EPS just for StreetLinks.

    What would the estimate be for Advent? For the portfolio?

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    • Cheapie read multiple stories today that confirm fees are not what was posted here.
      Cheapie also read management considers Advent too small to break out the figures in SEC filings.

    • "IMO they will have that million -- to start. ;)"

      I guess that all depends on how the tax software and tax preparer partnerships work out.

      The way I figure it, if tax software companies like TaxAct, Drake Software, TaxSlayer and private and public tax preparers promote Advent like they'e expected to, than a million customers isn't out of the questions.

      According to Drake Softwares web site, some 30,000 tax professionals Nationwide will have Advents products and services literally at their finger-tips. In addition, over 9 Million returns are prepared each year using their software as seen here;

      It's not hard for someone to work the numbers to see what the REAL postential is for Advent. What excites me is the FACT that my CPA who is with KPMG uses TaxAct software to personal returns, and TaxAct is another Advent partner, and they're even larger than Drake Software.

      The only problem I can invision would be for Advent to grow too big too fast, but I can live with that.

      Look out GreenDot and comes Advent!

      Richard Morris
      Va. Beach, Va.

    • "Green Dot said they had 3.3M active cards during the 3rd Q of 2010. From THOSE cards they recieved $27.044M which equates to $8.20 per card per quarter. Now add the debit card AFS based fees on top of that."

      Thanks ER...that actually adds up to $32.80(8.20 X 4) per card per year for interchange fees. And to think, GreenDots "average" load is just $844 where I think the "average" load for the Advent prepaid card will be $2,730 from tax refunds. Here's where it gets a little complicated though...we don't know how long it will take for the new Get It card cusotmer to spend their refund, nor do we know if they will continue to reload the card via payroll etc.??

      Bottomline, the interchange fees are huge, and if Advent prepaid card customers carry a higher "average" balance than their compitition, they'll be more profitable.

      I guess we know now why the CEO expects Advent to be profitable with less than 100,000 cards issued. Can you imagine the kind of money Advent can make if they have a million Get It cards issued?

      Richard Morris
      Va. Beach, Va.

    • Rich, let's use GDOT's interchange revenue as a basis for estimating AFS's debit card revenue from those specific fees. Since direct fees may vary, interchange fees will be similar.

      Green Dot said they had 3.3M active cards during the 3rd Q of 2010. From THOSE cards they recieved $27.044M which equates to $8.20 per card per quarter. Now add the debit card AFS based fees on top of that.

      You can do the math after this.

      E R

    • Thanks for the heads up on the 10K.

      But of even more interest is this information that I located on interchange fees for credit card and debit card transactions.

      Here is the most important part,where I believe Advent acts as the "issuing" bank, however they may have to give up a portion or maybe even split the 1.75 or 1.75%
      of the $100 transaction with BanCorp. In this case they would just get .875% instead of the 1% that we'd spoken about previously.

      "example of how interchange functions, imagine a consumer making a $100 purchase with a credit card. For that $100 item, the retailer would get approximately $98. The remaining $2, known as the merchant discount [10] and fees, gets divided up. About $1.75 would go to the card issuing bank (defined as interchange), $0.18 would go to Visa or MasterCard association (defined as assessments), and the remaining $0.07 would go to the retailer's merchant account provider. If a credit card displays a Visa logo, Visa will get the $0.18, likewise with MasterCard. Visa's assessment is fixed at 0.1100% of the transaction value and MasterCard's assessment is fixed at 0.0950% of the transaction value. On average the interchange rates in the US are 179 basis points (1.79%) and vary widely across countries; in April 2007 Visa announced it would raise its rate .6% to 1.77%.[11]"

      The postneital is truly mind boggling.

      Richard Morris
      Va. Beach, Va.

    • Cheapie's read of short interest doesnt show they have much concern.
      Cheapie says they know there is still $78million debt squandered by the old Reit.

    • "So we will soon know what Streetlinks and the portfolio runoff did for 4Q. Will the proxy vote happen before the 10K coming soon?"

      There's a reasonible chance we'll see the 10K by March 15th or next Tuesday. I doubt the proxy vote will be until after the 10K is filed, but as a non accelerated filer, Novastar has until March 31st to file the 10K.

      We already know the runoff from the portfolio was around 3M for Q4, but we won't know how Streetlinks did until the 10K is files.

      This is going to be a lot of fun.

      Richard Morris
      Va. Beach, Va.

    • I notice over on that AFS profit estimate (this is tax free because of a DTA deferred tax asset of 677M as of last 10k -- 300M of NOL and then you have timing differences TTD from portfolio of est 200M 100% written off by FAS 109) could be 15m for 2011. I've seen projections from 48 cent to 75 cents to has high as 1.00 for 2011 EPS x PE GDOT has a 35 PE with no DTA or the MUST have mandated by DoddFrank of another sub GDOT profit per card is 15 per their most recent 10Q. GDOT is a plain dummy prepaid card vs AFS is a full service affordable financial solution replacing many of the present solutions and needs of the 70 M Americans NON Banked, see NTSP prospectus prepared by Goldman Sachs.

    • Cheapie says you are neither reading it right or quoting it right.
      Cheapie wonders what happens when these lofty projections are missed badly on the low side.
      Cheapie notes Stifel did not approve them rather just used them.