If you believe the value of assets received from the wind down are less than 81mm then vote for the plan. If you think they are more than $81mm then vote against.
69mm/.85 = 81.1
Whats the fair value of a rig? who knows? SDRL recently purchased a $650mm drillship for $65mm. or 10 cents on the dollar.
That was my original valuation. But the lenders can claim they were owed these monies when the company was in default of their credit agreements.I looks unfair that the creditors would reap such a large share of the proceeds after they were repaid the full loan amount.
Under these terms Stock holders will probably end up with $1.20 in a year or two. with risk to the downside.
I SEE NO VALUE AT CURRENT LEVELS
I believe the stock was over valued at the IPO and run up to the 30 level. but is now undervalued as a profitable growth stock. I believe this company is still growing with a possible speed bump this quarter. Look at the earnings for the last 4 quarters. This company has growth and I believe that we will see earnings growth of $5mm in each quarter. 4 quarters from now we should have earnings near 25mm /q and in two years closer to $50mm a quarter.. At that point you are near $250mm annual rate or about $.65 a share. With this type of growth a 30p/e would be justified or near $20 a share. If it gets to $15 I will sell and leave some on the table for the next guy.
Took less than two weeks.
Long and holding
15 by end of next year.
Over shorted Market leader AOL fell from 75 to 23 1n 1996 only to rebound to 108 within a year.
Today, Over shorted market leader LC fell from 30 to 3.25 and is now rebounding. This market is struggling to find growth and LC is one of the few companies delivering and the company has produced earnings for the last few quarters. This is not a story stock in which earnings are expected in some far off future date, They are delivering today and the growth rate will accelerate once we are over this first quarter bump. This will trade at substantial premium in the next few years.
PRICE ABOVE 5......................................CHECK
The company should show good earnings growth this quarter. Management indicated on the last quarter that margins were better on repeaters and few were shipped in the first quarter. Additionally, Batteries and accessories also have better margins than the DHS radios and many more will be shipped this quarter.
I assume the decision to issue a quarterly dividend indicates managements belief in more robust earnings visibility. We should have a check next to earnings by the end of this quarter.
Analyst coverage is the last piece of the puzzle. Now that we have the first 4 checked and an analyst was on the last two conference calls, I assume that we will soon get coverage from the analyst community.
Over 13000 puts and 9000 calls with a 4 strike. The writers both profit if the stock closes at 4.00. The premiums collected will be pure profit and a million shares (long or short) won't have to be unwound (with risk) if the stock closes at $4.00. Big incentive for both the calls and puts to push it there Friday afternoon.
Most short sellers do their homework. They have to. The upside of a short is 100% (total company wipeout) the downside is unlimited. The professional shorts get it right more often than not.
I believe they have it wrong with LC. They have been correct that the stock was ahead of itself shortly after the IPO but have now overpalyed their hand. This Is a market leader in one of the fastest growth sectors of the market. They have now moved from quarterly losses to profits. This last quarter they hit a bump in the road (higher loan losses), loan growth above the key investor base, and more reliance on institutional investors. In addition the the well published mistakes of management. the stock falloff has been too steep.
I spent a few years with the security lending unit of one of the largest brokers in the us. In my first year a small growth stock had become overvalued and the shorts were all over this company even though it had a bright future. Look at the following from an article on AOL in 1997 from the Motly fool.
"Through many ups and downs, including the gut-wrenching ride from a high of $70 on May 7, 1996, to a low of $24 on September 11, 1996, I held AOL. Remember the horrible headlines: class action lawsuits, busy signals, subscriber churn, MSN, the Internet threat, accounting irregularities, blah, blah, blah? The popular wisdom of the day was that AOL was clearly DOOMED."
By july 1998 AOL had risen from 24 to 107 or nearly 430%.
LC may be more undervalued today than AOL back then.
Long and Holding
do your own research
They underestimated the value of the franchise and in the next four years the stock was up nearly 5000%.
Today they underestimate the value of the LC franchise.
Are you telling me that you expected no response from the government?
I also expect to see several state inquiries before its all over.
Its an election year. ... All of the AGs need to get some free press.
Over 300 million shares have traded and the stock is down nearly 50% from the announcement last Monday.
I doubt if the stock will close below last Fridays close ($3.51). We have traded down to 3.25 this morning (pre market) and may well trade below 3.50 during the day, but I believe that this cake is already baked and any additional sell off is unwarranted.
Would any rational institutional investor in loans pause until the 10-q was released? YES, Are there new details that would prevent a past investor from once again investing? No. Is it rational that the Government regulators would send inquires to the company? Yes.
This quarter will be more challenging than the past but once the company gets back on track the stock will be much higher. The growth rate and earnings potential lead me to believe that the company in a normal environment would be worth near $15.00 a share. Less than 25% of fair value is a large enough discount. I expect this to be near $7.00 by year end ( 50% of fair value).
No run on the bank with this company. A slowdown in growth until they reassure investors is all that will happen and the company has ample cash to carry it thru this slowdown.
In at 3.52 and will give it time.
Banks and financial institutions will be present if a buck can be made.
After the debacle in 08, many thought the sub-prime market was dead.
Today, sub-prime auto loans are one of the largest and fastest growing markets.
Financial institutions were making profits by purchasing or repackaging LendingClub loans.
They will return after a short pause.. I bet that within a week of the 10/q filing (this coming monday)
they will return after some due diligence.
Lets see where we are a week from now. Unlike a run on a bank, LC doesn't have depositors. The company can't have a run like BS or LEH in 08 because they aren't reliant on short term funding. Growth may slow or they may even shrink but they will not vaporise.
As a value investor, I buy stocks when they are down. RSI is below 20, Book less than a point away, and cash value only a $1.25 lower than my entry point. Profitable, and growing.
I may be early, I may be wrong,,,, but at this price I see value and an acceptable risk.
CASH AND SECURITIES OF $2.36 A SHARE.
I have seen companies in the past trade below cash but they had huge losses and it would be years prior to cash flow positive. Not the case with LC
This could be a nice fit for Capital one or am express.
1) COMPANY EARNINGS HAVE MOVED FROM NEGATIVE TO POSITIVE.
if they improve earnings by 5mm a quarter they will be earning 25mm a quarter by the end of 16 and nearly 50mm a quarter by the end of 2017.
2) low debt and over 900mm cash and securities at year end.
3) growth rate. Mr Market pays for growth. This company has great growth rate but the market is discounting its ability to continue. This quarter LC will get hurt from the forced departure and will probably slow the pace going forward but it still has what most companies need. Growth.
4) LC is a market leader. The market usually pays up for the market leader. (think AOL vs ELNK in the late 90s) of GOOG/YHOO today.
1) Stock has been falling for over a year. Any bounce will see many sellers looking to get even.
2) Financing risk for the business model. If the outstanding loans double in the next two years they will have to find another 10 billion in investor financing. The current low rates may provide investor access as they look for higher returns.
3) Investors must earn a reliable rate of return. This model has not yet been tested in a downturn in which loan losses will shurley rise. If the losses are too high investors will not return to fund the next round of replacement loans or growth funding.
4)additional regulation. Regulation may slow the market and may well drive out competition. (DoddFrank killed small banks).
5) higher rates may allow investors to earn risk free returns.
Until this past week I haven't followed this stock. My initial thought was that it was overvalued this past year but the growth rate made me investigate closer. The stock continued to fall this week as news that institutional investors were pausing any additional investments. What else would you expect. Of course, any one would want to get a better understanding prior to committing additional capital. I would bet that the company files its 10q Monday and within a few days they reenter.
bot 20k 3.52
Most deals close within a month or two after approved by shareholders. The press release now indicates prior to year end. (I think by September 30th) If it takes to year end the current price of 9.25-9.39 indicates an 11-12% rate of return. Junk bonds are near 7.5% so I expect arbs to drive the price towards 9.50 in the next few days. If the deal closes by sept 30 then the annual yield is north of 24%.
to come back again at $10.00 but in the mean time the company may pay a small dividend. Also change the date of record for new stockholders to vote for the deal.
I put the chances of the current deal at 75-80% down side at 7.25- 7.75