I have had my eye on FNFG for a bit, bought some at 11 awhile ago and sold at 13. 6% dividend and a projected stock price around 14, seems like a good buy, but if it was such a good buy it wouldn't be at $9, so what gives?
I agree th eguy is a f'n aswhole...
Money is very cheap today....no need to cut your throat (stock price) to get it....Brick & mortar is also plentiful...many HSBC branches will be closed. Not many parties interested in these 195 branches....
I find it hard to believe that this stock would be sold to a hedge fund at such a discount and that the board would approve this. The price you suggest would be discounted over 25%. What is the documentation for this?
Exactly what I'm thinking.
Board of Directors would fire the CEO of the company if the stock tanked to 5 dollars. If FNFG was trading at 5 dollars, it would be band from the NASDAQGS exchange and moved over to the OTC exchange!!
The purchase of the HSBC branches will lead to a secondary offering and dilute shareholder equity and possibly affect the dividend. This is probably built in to the present stock price. It seems this is a great example of how management and the crony board have given up the concept of rewarding the "owners". They embarked on a strategy of expansion for the sake of management salaries and egos. We can see how this has affected long term stock holders. I believe that this is a great investment if you are willing to buy and hold for say 5 years and believe that bigger is better in the world of banking.
I overlooked that part. Yes, the shares will be diluted as they issue more common shares...but it should take a month or two for the dilution to weaken, and the stock price should begin to expand and move higher. I remember Ford issued more shares during May of last year and the stock went down 2-3 dollars starting at 14 dollars then moving higher to 17-18 dollars. Just wait it out if you have to.
Usually when a company gives out a higher dividend, the price of the stock usually stalls and it moves either up or down in smaller steps. This could be the reason for its decline, its maintaining the range between 9 and 10 for now.
Think about all the stocks that give out a higher dividend, they lack any capital gains, but provide a consistent and high dividend.