after re-reading your post, I must confess that I
can't cipher. I was wrong with the $25 million figure.
I ran out of fingers and toes to cipher on, I only
have 21 you know.
However, being the simple
minded "inbred" poster that I am, I figured that if BBT
was determined to make this purchase that they
"saved" $33.9 million from their original offer. Now I
know that's not according to GAAP, but where I was
raised if you pay less that the original price you
"saved" a little money.
Now my post that you
responded to also questioned what the due diligence
uncovered. I don't know, I'm not an insider, but it must
have uncovered something. Was it $33.9 million in
problems? I doubt it. Surely, the management of BBT
wouldn't continue this purchase if there were. Did
Matewan's Management represent something that wasn't there?
Don't know that either. But time will tell won't it. If
this is a bad purchase, we will see.
management has done an excellent job to date. Why question
this one small deal? Will it break the BBT bank? NO.
Your post sounded like someone peed in your morning
cereal and you were having a bad hair day. So chill out
and take a valium.
The name of the organization was MainStreet
Financial Corporation (formerly MainStreet BankGroup,
formerly Piedmont BankGroup). It was a holding company
comprised of ten banks retaining their local identities.
The largest of these banks was Piedmont Trust Bank
located in Martinsville, VA. There was an effort made in
late 97, early 98 to consolidate several of the
charters of these "independent" banks into a "brand-name";
hence the MainStreet Bank found in the Richmond metro
area. If the BB&T merger had not taken place, DC area
banks would have consolidated next as MainStreet Bank -
Capital region, followed by the Southwest Virginia banks
as MainStreet Bank - Southwest. Since the merger was
announced in August, these efforts were obviously
With the merger of the MainStreet holding company
completed March 5, these "independent" banks are now owned
by BB&T. Systems conversion and name/sign changes
take place in July.
Hope this has been
You seem to well informed on financial matters.
Business Week magazine reports that the Financial
Accounting Standards Board voted to eliminate pooling of
interest accounting for mergers, perhaps by the end of
2000. This means the acquiring company must write off
good will (the difference between the book value of
the acquired assets and the price paid) At one time a
30 to 40 year write off was allowed, but Business
Week reports a 10 year write off will be required in
the future. Will this bring bank mergers to a halt,
since companies with high stock valuations have
heretofore been using these values to purchase companies
with lower values ? Will there be a window of
opportunity for BB&T and other acquiring banks to act prior
to the end of 2000? Could this precipitate more
merger activity by companies trying to get in before
they have to start taking large writeoffs? As the
gurus on CNBC say, "I think this could be a major
"secular" issue going forward".
BBT today also announced ANOTHER $10 million
buyback. Assuming it does go through, that buyback ought
to bring some upward motion to the price and some
compensation to the downward pressure you correctly identify
as a usual consequence of a new acquisition.
Considering other factors in the current market as well, BBT
ought to see a little upward trend, and so far today
we've seen that.
you are referring to ? According to Reuters, BBT
is lowering the price it will pay for Matewan from
$157.9 million to $124 million....a difference of $33.9
million. According to the convoluted "logic" that you and
a couple other messengers to this board offer up,
BBT has "saved" about $33.9 million now, and is,
therefore, based on your "logic", EVEN BETTER OFF THAN
HERETOFORE. IMHO, that is a lot of baloney.....and highlights
some of the inbred cheerleading that some people post
on this board. Has the thought occurred to you that
BBT is purchasing $33.9 million less in equity and
assets ? How will the "savings" show up on BBT's
financial statements......using GAAP
You are the only folks I know who own stock in a
banking company, cheer at the great wisdom of the
company's leader when an acquisition is announced, vocalize
your "faith" in the leader, find out later that the
acquiree is not really a choice target, and then cheer
even louder. Let's face it folks, BBT management made
an INITIAL DECISION that was a bad one. But, IMHO,
all the cheerleading just goes to demonstrate that
many of the people who post to this board are BBT
employees and insiders.......as several people have pointed
out earlier.....by noticing that some of the
cheerleaders disappeared during the Matewan due diligence
period, when they had insider information about
newly-discovered problems at Matewan...... AND THE REST OF US DID
NOT HAVE THAT INSIDER INFORMATION.
A poster by
the weird name of Attilla the Hunee attempted to tell
us that Matewan was a poor market choice for
BBT......and you yahoos shouted him off this board, because he
had done some excellent analysis that you didn't
argee with, and because he evidently had some knowledge
of Matewan's market that we did not have.
You say that management made an "initial
decision" and it was a bad one. That certainly remains to
be seen. I can`t recall too many instances that have
been "bad ones" involving this bank. I am neither an
employee or insider but simply a person that has made good
money by being part of this outfit. UNTIL management
and the BOD leads us into something we cannot recover
from (which is doubtful) they will continue to have my
confidence and support. Time will tell if they are correct
and my money is on them. At the very least, they have
made attempts to correct what they believe to be a
Logically, the stock price should get a little
kick from this news.
Technically, the stock isn't
that far from its 52 week high of 40 3/4, and stocks
breaking their highs have a tendency to run up for a
while. There are almost 5 million shares short for BBT
(12 days of average trading volume). I would not be
surprised to see BBT go up 1-2+ pts soon especially when
the foolish shorts realize their mistake.
(Not that my agreeing will insure the price will
increase, but, Who's John Gault?)
Another factor - I
think BBT has been prohibited from buying their stock
in buy-back plans until some of these mergers are
completed, etc. Is this correct? If so, this could be reason
for sideways movement as