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Medallion Financial Corp. (TAXI) Message Board

jdsomers 81 posts  |  Last Activity: 17 hours ago Member since: Mar 15, 2000
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  • This is likely the last day to pick up CSAL (as CSALV) at an extra discount. It is trading far below the company's estimates of its worth compared to other similar REITS based on its OIBDA (see the December presentation). The volume has been relatively light indicating that a lot funds will still need to buy starting Monday to represent its inclusion in the S&P Midcap 400 index. I'm not sure if they could buy early, but if so, not that many have done so based on its trading volume this week.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 4:24 PM Flag

    I was merely pointing out that your method cannot predict the price of the post split WIN. Actually, having thought it through, what your method does achieve is come close to determining the value per pre-split share (the 80 cents you cite) for the CSAL that WIN will still hold, but it does not account for its other assets. Therefore, the post-split WIN shares will have $4.80 value just from its CSAL holdings alone, then you have to add in the value of the operating company's other assets/future results.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 4:19 PM Flag

    What are you talking about? I didn't quote any repricing rules. I merely referred to the FINRA rules you cited. They apply to adjusting orders that are on the books and how they are adjusted for spinoffs. They don't actually decide the new trading price.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 4:01 PM Flag

    By the way, using your method, your math is off anyway. The correct way to use the current CSALV price is to say if it is trading at $30.30 -- the current trading price -- and that reflects a 1-5 reverse split from the current shares, then that is $6.06 per current WIN share. If you subtract that from the current WIN price of $8.31, you end up with the remaining WIN at $2.25 per share. After the 1-6, reverse split that would be $13.50 per new WIN share.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 3:48 PM Flag

    You are still incorrect although quoting FINRA correctly. You must understand what it says. It states that any ORDER will be reduced by the dollar value of any distribution, but it does NOT say how that value is determined. It is likely based on the company's input. The rule is to protect unsuspecting or uninformed traders from accidentally paying way too much if they do not understand the mechanism and/or timing on the spinoff. If anything it would lowball the outstanding order price to prevent surprises. However, the adjustment to orders on the books does not have any other impact on the actual trading price of the shares. That will be determined by actual trading/orders which are place after the distribution. That can be higher or lower, but is usually higher because there is confusion in the trading of the "old" shares, which confusion is removed upon trading of the new shares. You can speculate that the traders of the current stock know what they are doing, and that the CSALV trading is an accurate value of the CSAL when it trades alone and subtract the two to arrive at a price for WIN but that is not the likely outcome. When the two actually separate, they will trade based on expected earnings and yield. for each of them, regardless of what prior adjusted order prices were on the books. That is likely what makes the current WIN still a bargain price.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 3:36 PM Flag

    Based on that presentation, post split CSAL would be worth around $43 (as the footnote states they are showing 1:1 on CSAL, i.e. NOT accounting for the reverse 1-5 split) because you multiply the $8.64 shown by 5. The $7.32 value shown for the WIN portion is the post-split value because it represents the part that is left without the CSAL assets. To get to the estimated current value (per the company), you add the two together but reduce that result by the 19.9% stake retained by WIN (so you are not double counting the assets) and arrive at the $14.23 value shown in the presentation. The company was looking at the WIN value if it did not reverse split the shares at about $1.22 each so that is the reason for the reverse split. At least initially, it looks like the market is severely undervaluing CSAL and WIN might indeed trade higher than $7.32 post-split with that 60 cent dividend. The company was purely using adjusted OIBDA for its estimates.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 23, 2015 11:56 AM Flag

    No. It does not do that. You need to read the fine print. You do not multiply by 6 on the post split shares. Only on the CSAL shares. That's why pre-split the company shows the pre-split current value of WIN to be about $14 using its figures.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 22, 2015 2:59 PM Flag

    That doesn't make any sense. Why would you deduct 20% of the reverse split CSAL from each share of the original WIN? I do not see the correlation. According to your theory, the higher that CSAL trades, the lower the value for the "new" WIN. That makes no sense. The higher the price for CSAL, the more the company was correct that the REIT assets locked within WIN were undervalued. It does not change or affect the value of the remaining WIN for the CSAL assets to trade higher. It would, however, show that market has been under pricing WIN and the value of its parts.

    Sentiment: Buy

  • Reply to

    How low can WIN go?

    by mpcs2007 Apr 15, 2015 1:53 PM
    jdsomers jdsomers Apr 21, 2015 10:02 AM Flag

    Can't say that I'm all that excited about your purchase, but I am positive about mine. :-)

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 21, 2015 10:00 AM Flag

    I don't understand the comparison you are trying to make. ALSK sold its entire wireless operation. It did not spin off its physical assets. How is this comparable?

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 21, 2015 2:51 AM Flag

    Not likely. When issued trading is notoriously thin. CSAL should definitely settle north of $30.

    Sentiment: Buy

  • Reply to

    This what you would get in the spin off

    by smulloy98 Apr 16, 2015 1:51 PM
    jdsomers jdsomers Apr 21, 2015 2:50 AM Flag

    Do you not know how to read? CSAL is just starting out as having one customer. It has plans to let other companies do the same as WIN and be the buyer of the physical assets. It will grow and have more than one customer which should lead to an increasing dividend.

    Sentiment: Buy

  • Reply to

    CSALV trading today

    by nnrpro48 Apr 20, 2015 10:37 AM
    jdsomers jdsomers Apr 20, 2015 11:47 AM Flag

    I believe the symbol will be csal.

    Sentiment: Buy

  • Reply to

    CSALV trading today

    by nnrpro48 Apr 20, 2015 10:37 AM
    jdsomers jdsomers Apr 20, 2015 11:46 AM Flag

    That entirely depends on what price you think the "new" WIN will be trading.

  • jdsomers jdsomers Apr 18, 2015 1:44 PM Flag

    Only the CSAL is pre-split. The WIN is not adjusted in that presentation, so you are right on the CSAL estimate but not the WIN.

    Sentiment: Buy

  • jdsomers jdsomers Apr 17, 2015 11:56 AM Flag

    Well, that price would be great if you are right!

    Sentiment: Buy

  • jdsomers jdsomers Apr 17, 2015 11:48 AM Flag

    I sure hope you are right that the WIN could trade that high. That would leave it with a 4.11% dividend yield. It would be nice if that was enough to support the price at that level for the operating company, but I'm not sure its current earnings could support that price. The company though the CSAL could be worth about $42 per share based on comparable company EBITDAs, but it will be lower if just traded on comparable yields, but I hope not as low as you are suggesting, That would be a yield over 9%.

    Sentiment: Buy

  • jdsomers jdsomers Apr 17, 2015 11:41 AM Flag

    Yes, that is my opinion. However, if the pricing of the new CSAL doesn't hold up, then all bets are off. I thought the yield on the debt it just placed seemed a bit high and that could be competition for the stock, itself, so I'm leaning toward the lower side of my CSAL price estimate at this point.

    Sentiment: Buy

  • jdsomers jdsomers Apr 17, 2015 11:38 AM Flag

    jbloss2, that is rather pessimistic on CSAL Other similar REITS trade in the 7-8% yield range. There is no way that WIN can trade for $24. That would mean its value represents $4 per current share. No one thinks that the operating company is worth half of the current price. Most of the asset value (and virtually all of the physical assets go to CSAL. The new WIN will have to valued on its potential for actual earnings. Your price would assume at least $1.50 per share earnings at current market multiples to even attempt to support a $24 valuation. Do you think that is realistic? Also, at that price the yield on WIN would only be 2.5%. Is that high enough for this business?

    Sentiment: Buy

  • Reply to

    financing placed

    by smulloy98 Apr 16, 2015 3:01 PM
    jdsomers jdsomers Apr 16, 2015 3:05 PM Flag

    I haven't followed the current debt on WIN. Is the new financing costing less, more or the same as compared to its current note/bond rates?

    Sentiment: Buy

TAXI
10.51+0.05(+0.48%)Apr 24 4:00 PMEDT