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FBR Asset Investment Corp (FB) Message Board

  • harryofanguslane harryofanguslane Jan 25, 2003 7:50 AM Flag

    Wake Up! Barron's Pans Merger

    Doesn't anyone wake up on Saturday mornings?

    Barron's has a story panning the merger. Basic line is that FBR (not the REIT) is an unsuccessful company merging into the far more successful REIT. It did mention the recent Bill Miller purchase of FB shares.

    In a less nervous environment, I wouldn't take too much notice and reserve judgement until I saw the merger documents we'll be getting very shortly. Now, I'll just hope for the best.

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    • << Basic line is that FBR (not the REIT) is an unsuccessful company merging into the far more successful REIT.>>

      have you compared FBR share price to those of Merrill Lynch , JPM , etc over the same time period ?......I gues that means they are also
      'unsuccessful companies' ?

      doers this mean every company in USA at 45% of peak price currently is 'unsuccessful' ?

      that would likely mean 95% of all NASDAQ companies today should be closed immediately .

      << It did mention the recent Bill Miller purchase of FB shares.>>

      yes. the article's token effort to probably claim its being 'fair' ...... wonder why they didn't mention the price level he paid or his 10yr track record ????

    • I wouldn't be surprised at all to find out that the Barrons article had something to do with the price drop and I realize the Barrons article wasn't public knowledge last week.

    • Just chill out a minute, the article is a string of ifs and maybes and conjecture.

      --They don't like the clubby FB-FBR relationship. Too bad, the merger just formalizes it anyway.

      --They admit that current FBR holders are getting a more stable deal:"It's clear that Friedman Billings gets something out of rolling itself into the real-estate investment trust. It maintains that the REIT structure will add steadiness to its otherwise unpredictable stream of earnings and give it access to more capital with which it can better compete with top-tier brokerage firms for underwriting business. In addition, it expects the bigger market value that will result from combining the two companies, and the tax advantages associated with REITs, to boost its shareholder base and add to liquidity in its shares. It expects to save $25 million-$30 million by moving excess capital to the REIT side of the business."

      --They highlight Bill Miller's 1.1 million share buy on December 6. He is only the best value manager in the business the last decade.

      --They think the merger stretches the REIT laws. Big deal, all the authorities signed off on it.

      --Their insightful view on future prospects:"It could be tough to improve on that performance in these difficult times." Gee, that tells us a lot about how they see future cash flows shaping up.

      --More ifs and maybes:"Also, if double taxation of dividends is eliminated, REITs may not be as attractive to investors." Like Washington will get anything done on this for months and months and months....

      --"There are concerns, too, about the quality of the brokerage firm's own investment portfolio, which consists of a motley group of companies it brought public, including a big chunk of AmeriCredit." Well, maybe that's why FBR wanted to merge into FB's mortgage pool business. Duh.

      --"A lot depends, too, on interest rates staying in the current sweet spot." Name any big names who expect rates to go up this year (or even next by much).

      Barrons desperately wants to think they are important enough to pump or trash stocks, and they aren't. They become more and more irrelevant as the bear market wears on.

      This will be a one-day dip at best.