Medalion Bank has to operate under the rules of a bank in order to have the benefits of a bank -access to cheap money. But the cash is not completely stranded there -money comes out as 'dividends' and money goes in as investment. I do think the most likely use of the $100M will be to originate more consumer loans and possibly sell more in the future.
As far as actual loans for medallions, I expect that they will continue on with a slow decline in principle. They seem to be selling again so there is some chance they will pay off faster and I would not be surprised with some defaults, leaving the bank with medallions and personal collections.
The critical point I see is that for the past two years, each cap raise has involved interest payments higher than prime and HAS BEEN SENIOR TO ALL PRIOR FINANCE. So uber still doesn't make a profit and new investors are already skimming cash at double market rates with contracts that give them the company unless they get their money back. They used to issue equity, then they could only sell preferred shares -with board seats, now they can only issue junk bonds senior to everything. It's last-in-first-out financing! I wonder if the last round has covenants that demand seniority? If it did then the next round will show a disturbing increase in interest rates as the front of the line to get paid can not be moved.
Uber death spiral, line to get paid starts here!
What lines on the earnings report would indicate the rate MFIN is producing Consumer loans? If MFIN can keep originating and selling loans earnings are going to accelerate significantly!
Is it time for another short squeeze?
At the very least the next earnings report has a strong tail wind. What I want to see is accelerated consumer loan generation. The paid #$%$ on this tread are acting like MFIN sold some sacred irreplaceable loans when the truth is that MFIN's most impressive capability is generating high yield low risk loans.
Just days ago the professional liars (or liar with multiple accounts) on this board were claiming MFIN would run into a cash crunch and that their portfolio was way overvalued. Now that we have clear proof to the contrary they instantly pollute the board with lies that not only ignore their previous lies, they defy all logic!
The truth is far simpler
-The loans MFIN produces are high yield and high quality.
-The loans are of higher market value than what MFIN management marks them in "book value".
-MFIN trades at a severe discount to this demonstrably conservative book value.
-global interest rates are going down, not up due to foreign risks MFIN has no exposure to. So MFIN funding rates are going down for the foreseeable future.
-MFIN has an impressive history of putting capital to work fast. Past raises have fueled growth IN THE SAME QTR. And even after selling the loans MFIN likely will continue to service payments.
Keep these truths in mind as the professional dirtbags spin stories about how $100M of cash in the bank is a bad thing (remember just last week they were spinning lies that MFIN would run short of cash). And their even more bizarre lies about how book value is too high when the market is saying the opposite WITH $100M CASH!
The clear explanation is that the short sellers are in way over their heads. At last report it would take all of the shares traded for 29 days to cover their lousy losing bet. Volume is declining so it is getting easier to manipulate but harder to cover. So when you see the board filled with bizarre, counter intuitive claims by the same bozos that were piling up stories to the contrary last week -you know why BECAUSE THEY ARE PAID TO LIE!!
Does the loan sale just bring the cap ratios 'in line' or does it set MFIN up to grow the consumer loan business faster than before? One of the most impressive aspects of MFIN IMO has been their speed producing high margin high quality loans.
Well, we know that the percentage of assets that are NOT backed by medallions is higher than it was before the sale -because they were sold at a premium to book.
And we also know that gordon is an #$%$ -before the sale he claimed the loans were worth less than book, and now they have been sold for more he completely ignores the $100M cash add to the balance sheet!
MFIN has shown repeatedly that they can turn capitol into high performance high yield loans. The medalion loan percentage is below 50% and it is shrinking fast. The most likely result of this news is that MFIN will INCREASE the consumer loan growth rate -which was impressive already!
Do they have any expensive debt to pay down?
Does this all go right back to producing more consumer loans? Could the loan growth rate increase? What should we be looking for in the next earnings report?
I presume that MFIN will continue to service the loans they sold -does that show up as higher margins?
It sure looks like MFIN can grow it's high margin consumer loan business at will. Every time they have raised capital they have been able to put it to work with amazing speed. Now that banks are realizing they will not be able to park cash at the Fed for a profit in the future MFIN loans are looking pretty damn good.
This goes to show that the loans they are making are solid, despite being high yield. I am only surprised to see them described as "prime credit" but I guess that is based on their excellent low default ratios.
The takeaway is that the market value of MFIN loans may be higher than book.
Don't wast time! Drugs and guns are where the money is!
Breaking laws IS ubers thing right?
I heard the next ap extension is LOOTER! uber tells you where the cops have been bribed and 'independent contractors' go in to collect everything they can smash and grab!
uber has all it's cars lojack'd -not providing the data to authorities (which they requested frequently) should be prosecuted for obstruction of justice!
uber lending and leasing 'partners' have all filed directly to court battles for violating lending laws. The latest wall street mystery finance fabrication to take up the position is clearly constructed to hide it's owners.
For starters the uber leases are at much much higher rates -20-30%
second, the uber leases are sold to poor people BY CLAIMING they are GETTING A JOB BY SIGNING!
Third -the uber leases are twenty plus pages long with all kinds of legal traps the signers can not possibly understand. Violates lending clarity laws.
fourth -uber skims the payments off of driver earnings IMMEDIATELY! That can only happen in major delinquency for law abiding lenders like MFIN.
fith -all uber leases are lojacked -the entire "lease" deal is a scam to cover the fact uber evades all labor laws like minimum wage!
uber lease deals are a scam that uber uses to evade labor laws and get rich on the abuse of the poor!
How will uber deny employment rights now that they are providing the cars, maintenance, and deducting the cost directly from driver payments?
The California case was a STEAL at only $100mill reimbursement for select drivers. NY has had far greater revenue.
It will be interesting when the labor lawyers get into this -I am quite sure that uber will have a long string of of violations when they are ordered to disclose the business relationship with the predatory lenders. ALL of the cars 'financed' are at ridiculous rates and all are 'lojacked' wired to report their position at all times so they can be repossessed efficiently. This arrangement blows the best argument uber has for claiming drivers are contracts not employees -or humans with any rights. uber claims drivers are not employees because they provide a service with their own skill and equipment. WELL NO THEY DO NOT OWN THE EQUI[PMENT -UBER AFFILIATES DO AND THEY ARE PAID FOR AND MAINTAINED DIRECTLY BY UBER AFFILIATE.
My point is that the connection between uber and the lease provider is so damning to their case that they will violate all court orders.
As it uber had not proved it was #$%$ before...