In the case of DRII they announced a strategic alternative process back in February and actively sought bidders. I'm certainly not counting on it, but it just shows that both BFCF and BBX are massively undervalued. I would say based on what DRII was purchased for you can easily put a conservative price tag of $700M on Bluegreen. I'm not sure about disclosure rules, but since Levan and Abdo have a controlling stake in the BFCF a company probably wouldn't make an offer unless they said they were interesting in selling.
I did send an email for what it's worth telling them it makes no sense not to pursure a sale of Bluegreen (and buy back shares).
The dividend is so small it is laughable. They claim some people/funds/whatever said they'd like to invest in BFCF, but couldn't because there was no dividend. Personally I have a hard time believing that. I mean if they came out with a 3-4% dividend I could see a bunch of yield starved investors start to salivate, but a sub 1% dividend isn't going to fool anyone. It certainly did diddly for the stock price when they announced it. Unfortunately distributing $2M isn't going to stop them from buying a company if they want to.
Certainly one case has nothing to do with the other (and yes IR always likes to mention the last case like it's a precedent). The appellate court's line of questioning is definitely interesting though and I don't have a transcript of the whole proceeding so I have no clue what else was discussed. No offense to your lawyer friend, but I would take his opinion with a grain of salt unless he knows this appeals court personally and had experience with SEC related cases. There are a whole bunch of possible outcomes and it's almost impossible to guess what they'll decide.
I don't know what will happen, but the shareholder lawsuit against BBX that went to the appeals court was overturned and did not go back to trial. The court can determine that the SEC didn't have suitable evidence in the first place and throw the case out. We shall find out. No clue when.
Interesting article regarding the appeals court oral arguments on law360. Here is an excerpt:
" (SEC Counsel) Rosen also faced scrutiny from the appeals panel on the SEC's evidence and its pursuit of summary judgment on Levan's statements before the matter went before the jury.
In a lengthy back-and-forth, U.S. Circuit Judge Julie Carnes pressed Rosen on what “cold evidence” there was about the actual performance of BankAtlantic's loans, beyond opinions stated by Levan and other bank officials in emails that the SEC attorney initially mentioned.
“Isn't the fact that we're having this long colliquy evidence that a jury should've decided this?” the judge asked.
Judge Carnes also asked if seeking partial summary judgment on findings of fact usually reserved for juries is a practice of the SEC.
Rosen said she did not know but that it was not inappropriate and helped to narrow the issues for trial, to which Judge Carnes responded that it also expands the issues for potential appeal.
U.S. Circuit Judge Charles R. Wilson also questioned if the SEC could cite other cases that had followed a similar path where the trial judge informed the jury the defendant was a liar and asked the jury to focus on other issues such as scienter.
Rosen said the commission had not found another example.
U.S. Circuit Judges Charles R. Wilson and Julie Carnes and U.S. District Judge Lisa Godbey Wood sat for the Eleventh Circuit.
The SEC is represented by in-house counsel Anne K. Small, Sanket J. Bulsara, Michael A. Conley, Benjamin L. Schiffrin and Emily T.P. Rosen.
Levan and BankAtlantic are represented by Eugene E. Stearns, Grace Lee Mead, Cecilia D. Simmons, Matthew C. Dates and Jenea M. Reed of Stearns Weaver Miller Weissler Alhadeff & Stiterson PA.
The appeal is SEC v. BankAtlantic Bancorp Inc. et al., case number 15-14629, in the U.S. Court of Appeals for the Eleventh Circuit."
I can certainly understand the frustration. I've been involved with BFCF and BBX now for a couple of years. The only reason I'm probably more patient is I've managed to trade in and out with some decent success and was able to buy BBX at some good cheap prices before I tendered all my shares.
This lawsuit has taken longer than I ever could have expected and I was hoping they wouldn't actually appeal what I consider a relatively minimal penalty. By the time the appeal is done Levan will probably be at least halfway through his ban. They seem optimistic that they will win the appeal and always refer to the previous shareholder lawsuit they had overturned in appeals court. I'm no lawyer, but from what I've read I don't think it's the same situation and I'm rather pessimistic that the ruling will get overturned.
They had the ability to buyback shares for years and never did so until recently, but the amount was way too small. They should initiate an open ended buyback for $50M right now and start buying some shares. They can do it slowly, but just having a buyback in place would give some people incentive to buy.
As jsb1949 indicates it's obvious there was someone selling a sizeable chunk of shares over the past several weeks. Whether they are done or not I'm not sure. For all I know someone owned 4.9% of the company in which case they didn't have to file when they sold.
Other than that there are just a lot of factors:
- Still an overhang due to the appeal. Failure to merge BFCF/BBX still leads to a complicated structure.
- Lack of any exciting news.
- Management doesn't hold conf calls and really doesn't give a whole lot of detail in their earnings releases. I think a lot of people don't trust management and believe they don't manage the company for the shareholders (can't say I completely blame them). Their majority voting stake rules out any activists.
- No analyst coverage.
- Earnings tend to be lumpy due to RE transactions and BBX Sweets puts a dent in earnings until they finish spending on integrating the companies and turn profitable.
- Failure to do any significant buybacks which I emphasized on my call. A sub 1% dividend is not going to interest anyone in my opinion. It's also a bad choice of capital allocation. Buying shares at a significant discount to book value and NAV is a no brainer.
Some of these things may never change, but others will eventually get done sooner or laer (appeal, merger, analyst coverage at some point, buybacks).
Really management has to do one of two things. Get people to really believe in the company and give them a reason to buy OR keep buying back stock until there is no one left willing to sell at these ridiculous prices.
gca - This is my third time trying to post this over the last few days... I kept getting sidetracked and shutdown my computer twice in the middle of typing! :-O
Anyway. In regards to the financial crisis I looked back at Bluegreen's securitizations during those years and I don't see anything about them breaching any covenants and they certainly didn't default on any of the securitizations. Defaults certainly went up which impacts cashflow, but this was nothing like the disaster in the residential MBS market which practically imploded. I did speak with IR a few days ago and he did mention how during the financial crisis they still had more demand for VOI's and wanted to do more sales, but the debt market was in such bad shape they were only able to get a securitization for about half the amount as normal, so they basically had to lay off a bunch of sales staff until things improved.
As far as the net cash I will take that back as it is not technically correct. What I will say is BFC has a large amount of financial flexibility as well as a lot of hard assets (real estate, VOI inventory, loans backed by real estate) which, while they aren't liquid, under any environment I've seen in my lifetime can only go down so much (as opposed to a company with assets like manufacturing equipment or retail inventory which if it becomes obsolete or out of favor could be worth pennies on the dollar). I would separate their debt (aside from the securitizations) into two main buckets. There are the items on the note and mortgage notes line in the balance sheet which are shorter term. Then their are the Junior Sub Debentures which are Trust Preferred Securities that they issue which don't mature for another 20 years.
I'll never say 'nothing can happen' since I haven't experienced 'everything' yet, but this gives them a lot of protection and would make it very difficult for the debt to drag them under. That's enough for now. Hope that helps express my thoughts.
Yes David P. emailed me as well. I told him, as I've mentioned before, that it would be nice if they issued releases in the US for IMOS holders so we have the same information as 8150 holders and avoid confusion from people (like me) who try to interpret things by reading Taiwan news.
If that's the case my mistake and sorry for the confusion. I've never seen a monthly update... Then again they usually blast through the repurchase so fast it doesn't last a month. I emailed David P. to confirm.
If you are using Google Chrome they have a Google Translator you can use. I posted one of the releases in my post below.
You are correct. They did not purchase 15M shares. See release below. The only thing I can think (hope) is they had (or chose) to stop the repurchase because of some announcement coming up like news about the merger vote or something. No clue.
The amount of the Company's announcement to buy back shares of the Company accumulated to NT $ 300 million or more
Amounting to two per cent or more than NT $ 300 million to buy back the date 1. The cumulative number of shares of the company total shares outstanding: 105/06/13
2. The number of buy (shares): 9,305,000
3. The total amount of shares bought (dollars): 301,905,322
4. The repurchase price per share (yuan): 32.45
5. in the repurchase period has accumulated holdings (shares) own shares of the Company: 24,305,000
6. The repurchase period within the cumulative number of shares already held by their company has the total number of shares accounting for the ratio (%) Issue: 2.71
7. Other Matters stating:
caff - Exactly my point as well. May revenue should not have been a surprise to Chipmos, so I'm not sure why people are panicking. I just picked up a few more shares @ around 17.50.
Not sure when to expect the proxy materials?