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SVB Financial Group Message Board

  • brotherbucks brotherbucks Mar 27, 2002 11:21 AM Flag

    Short update

    Short position increased from 4.46mil to 4.95 mil.This stock has been the darling of the shorts for more than a year.With the economy seen as into recovery by an increasing # of pundits,hugh stimuli injected (extremely low interest rates,low energy costs,government stimulus,etc.) and SIVB coming through this market debacle with their second best year ever, one would think that the shorts would hunt in more profitable areas.I thought that some of the rise from the mid $20's to the low $30's was due in part to short covering--not so-they were selling into the rise.
    As SIVB begins to dispose of their excess capital(finish paying for Alliant,share buyback,additional purchases,etc.)their ROE will rise accordingly.Each 1/4 point increase by the Fed should add about 10 cents a share(annualized)+/- 20%. Their credit quality seems to be hanging in there and recoveries from their typically aggressive write downs could be showing up later this year.They have had time to begin implementation of their multi-bank strategy which may not make significant contributions this year.
    Hopefully they will show a modest improvement in Q1 over Q4-say +1or 2 cents/sh to 27/28 cents/sh.This would give creedence to the idea we are off the bottom.
    I also may br confusing my wishes for reality--do your own due diligence.
    May your Easter egg not be rotten!!

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