Tidbits

[Spekulatius]

38 minutes ago, mjm said:

what do you base that on?  poor economy?  curious?

Consensus forecast. Looks like consensus is for a loss in Q1, which is much weaker than last year.

Part of the issue is with increased vehicle depreciation expenses due to used car prices becoming weaker apparently.

 

I am surprised by the violent stock reaction and didn’t expect it just reading the earnings release.

Edited February 17 by Spekulatius

[Sweet]

Volatility is just crazy on these, worse than oil and gas and that’s saying something.

 

I think if there is a play here is Hertz warrants.  

No position and none likely, but still watching, if it gets very low there may be a way to play it.

[Sweet]

37 minutes ago, Spekulatius said:

Consensus forecast. Looks like consensus is for a loss in Q1, which is much weaker than last year.

Part of the issue is with increased vehicle depreciation expenses due to used car prices becoming weaker apparently.

 

I am surprised by the violent stock reaction and didn’t expect it just reading the earnings release.

The high price second hand car market was helping their earnings since they were getting higher prices for their rental cars.  That’s likely gone and not coming back.  They should have paid down debt.

[Spekulatius]

18 minutes ago, Sweet said:

Volatility is just crazy on these, worse than oil and gas and that’s saying something.

 

I think if there is a play here is Hertz warrants.  

No position and none likely, but still watching, if it gets very low there may be a way to play it.

The Hertz warrants are $4.37 while the stock is $7.37. I think the warrants are a very long dated call at a $13.8 strike with a 2051 date. I don’t think it’s that attractive unless you are very bullish about HTZ stock price.

[Eldad]

On 1/27/2024 at 9:49 AM, gfp said:

I don't know about land / farm prices being "cheap" in America.  We have a family farm in Indiana (USA) and my Uncle is currently managing it.  He told me a "medium quality farm in Indiana near our farm sold for $13,400 / acre recently."  Now that price doesn't make sense to me for raw farmland at all.  I see the financials, I know what the farm produces on average over time.  There is tax.  It just doesn't seem undervalued to me at all.  Maybe somewhere else there is productive ag land that is much cheaper but $13,400/acre for Indiana farmland is just strange.  I think @boilermaker75 has a similar farm in his family.  Maybe he can chime in and tell me $13k is way off the mark and my uncle is smoking crack.

Average in Indiana is 8k so that’s probably right. It is kind of like sports franchises, it will never makes sense from a yield perspective, but it continues to outperform for other reasons. 
 

I don’t like that it is so heavily subsidized by the US government. When our country finally has to pay the piper financially, that could all go away. I think super long-term Canadian land has upside. Longer days, global warming, growing population, etc. 

 

My family does timberland in the US South and if bought right can be had for $1000-1200 or so cut over. Not a world beater investment but has recreational uses and other strange upsides you would never predict when buying. We have been approached for solar, oil/gas, lithium, RE development, etc. through the years. 

[ValueArb]

2 hours ago, Eldad said:

Average in Indiana is 8k so that’s probably right. It is kind of like sports franchises, it will never makes sense from a yield perspective, but it continues to outperform for other reasons. 
 

I don’t like that it is so heavily subsidized by the US government. When our country finally has to pay the piper financially, that could all go away. I think super long-term Canadian land has upside. Longer days, global warming, growing population, etc. 

 

What subsidies are you referring to, did you mean agricultural subsidies?

[Eldad]

1 hour ago, ValueArb said:

 

What subsidies are you referring to, did you mean agricultural subsidies?

Yes agricultural, loans, very favorable tax code, etc. 

[Saluki]

 

Very interesting video on Pinduoduo by the Financial Times. 

[boilermaker75]

On 1/27/2024 at 10:49 AM, gfp said:

I don't know about land / farm prices being "cheap" in America.  We have a family farm in Indiana (USA) and my Uncle is currently managing it.  He told me a "medium quality farm in Indiana near our farm sold for $13,400 / acre recently."  Now that price doesn't make sense to me for raw farmland at all.  I see the financials, I know what the farm produces on average over time.  There is tax.  It just doesn't seem undervalued to me at all.  Maybe somewhere else there is productive ag land that is much cheaper but $13,400/acre for Indiana farmland is just strange.  I think @boilermaker75 has a similar farm in his family.  Maybe he can chime in and tell me $13k is way off the mark and my uncle is smoking crack.

 

Sorry, I have had a hectic semester and didn't see this post earlier.

 

Yes good farm land in Indiana is going for $13-14k an acre.

[KJP]

Ashford Inc. go private transaction via 1 for 10,000 reverse split:  https://ashfordinc.q4ir.com/news-events/press-releases/news-details/2024/ASHFORD-INC.S-BOARD-OF-DIRECTORS-APPROVES-PLAN-TO-TERMINATE-REGISTRATION-OF-ITS-COMMON-STOCK/default.aspx

 

Stock price has been volatile this morning, but IRR would be good if deal closes on time.  According to the press release, they don't appear to be aggregating across accounts either.  So, if you're comfortable with the deal, you could put a decent amount of money into this.  Subject to shareholder vote with targeted closing in summer 2024. 
"

[gfp]

9 minutes ago, KJP said:

Ashford Inc. go private transaction via 1 for 10,000 reverse split:  https://ashfordinc.q4ir.com/news-events/press-releases/news-details/2024/ASHFORD-INC.S-BOARD-OF-DIRECTORS-APPROVES-PLAN-TO-TERMINATE-REGISTRATION-OF-ITS-COMMON-STOCK/default.aspx

 

Stock price has been volatile this morning, but IRR would be good if deal closes on time.  According to the press release, they don't appear to be aggregating across accounts either.  So, if you're comfortable with the deal, you could put a decent amount of money into this.  Subject to shareholder vote with targeted closing in summer 2024. 
"

 

Thanks for posting - regarding this statement, "Ashford estimates that approximately 1.1 million shares (representing approximately 31% of the shares of common stock currently outstanding) would be cashed out in the Proposed Transaction and the aggregate cost to the Company of the Proposed Transaction would be approximately $5.5 million, plus transaction expenses, which are estimated to be approximately $6.7 million. Ashford intends to fund such costs using cash-on-hand."

 

Isn't there a decent chance that shares transfer to a bunch of 9.9k share owners / baby arbs and the company doesn't have the cash to redeem the much higher than projected number of shares? 

[KJP]

1 hour ago, gfp said:

 

Thanks for posting - regarding this statement, "Ashford estimates that approximately 1.1 million shares (representing approximately 31% of the shares of common stock currently outstanding) would be cashed out in the Proposed Transaction and the aggregate cost to the Company of the Proposed Transaction would be approximately $5.5 million, plus transaction expenses, which are estimated to be approximately $6.7 million. Ashford intends to fund such costs using cash-on-hand."

 

Isn't there a decent chance that shares transfer to a bunch of 9.9k share owners / baby arbs and the company doesn't have the cash to redeem the much higher than projected number of shares? 

 

That is possible.  But take a look at insider ownership.  The structure suggests to me that they want to cash out as many as possible.

 

EDIT:  It's enough of an issue that I wouldn't buy this at, say, $4.80 today.  I bought pre-market and my limit sell order already hit for most of those shares.  I'm going to keep an eye on it and see if the spread widens out again.

Edited April 2 by KJP

[gfp]

5 hours ago, KJP said:

 

That is possible.  But take a look at insider ownership.  The structure suggests to me that they want to cash out as many as possible.

 

EDIT:  It's enough of an issue that I wouldn't buy this at, say, $4.80 today.  I bought pre-market and my limit sell order already hit for most of those shares.  I'm going to keep an eye on it and see if the spread widens out again.

 

I see your added edit now and I was thinking the same thing.  I was a very happy buyer at 4.36 and kept buying below 4.50 but I feel like a seller at 4.81 here.  Maybe we won't get another swing at it but I appreciate you highlighting the opportunity - I wouldn't have seen it otherwise.  I owe you a few thousand beers if we ever meet.  Cheers!

[pricingpower]

On 4/2/2024 at 10:19 AM, KJP said:

Ashford Inc. go private transaction via 1 for 10,000 reverse split

One aspect I'm not clear on is if shares need to be moved out of street name to be sure to get the cash out treatment... seems like will need to register them pre the record date for the reverse split / subsequent split.  Anyone looked into whether the transfer agent has any unexpected fees?  Googling a bit seems most brokers are 0-$100 for using the direct registration system but transfer agents also sometimes have additional fees. 

 

I feel for the middle office guy somewhere who's about to get a tsunami of 9,999 share registration requests.

[Saluki]

There's a video on CNBC now of Einhorn pitching his stock Solvay at the Sohn Conference.  When I checked the prices, the shares in Brussels are up 4% and the OTC  US shares are up 12%.  And markets are efficient? 

[KJP]

4 hours ago, pricingpower said:

One aspect I'm not clear on is if shares need to be moved out of street name to be sure to get the cash out treatment... seems like will need to register them pre the record date for the reverse split / subsequent split.  Anyone looked into whether the transfer agent has any unexpected fees?  Googling a bit seems most brokers are 0-$100 for using the direct registration system but transfer agents also sometimes have additional fees. 

 

I feel for the middle office guy somewhere who's about to get a tsunami of 9,999 share registration requests.

 

The release says:  "

If consummated, the Proposed Transaction would apply directly to record holders of the Company’s common stock. Persons who hold shares of common stock in “street name” are encouraged to contact their bank, broker or other nominee for information on how the Proposed Transaction may affect any shares of the Company’s common stock held for their account. If you hold in “street name” fewer than 10,000 shares in any one account, the Proposed Transaction may apply indirectly to your shares as described in the proxy statement to be filed in connection with this Proposed Transaction.

 

Normally this is not an issue and the reverse split occurs at the individual account level, not at the aggregated broker level.  But the disclaimer is interesting.  If I was going to hold through the transaction, I'd look at the proxy statement and then contact my broker.

[gfp]

15 minutes ago, Saluki said:

There's a video on CNBC now of Einhorn pitching his stock Solvay at the Sohn Conference.  When I checked the prices, the shares in Brussels are up 4% and the OTC  US shares are up 12%.  And markets are efficient? 

 

Presumably the Brussels market is closed and the OTC market in the US is open when he spoke about the stock

[bizaro86]

4 hours ago, pricingpower said:

One aspect I'm not clear on is if shares need to be moved out of street name to be sure to get the cash out treatment... seems like will need to register them pre the record date for the reverse split / subsequent split.  Anyone looked into whether the transfer agent has any unexpected fees?  Googling a bit seems most brokers are 0-$100 for using the direct registration system but transfer agents also sometimes have additional fees. 

 

I feel for the middle office guy somewhere who's about to get a tsunami of 9,999 share registration requests.

 

I think it's unlikely that they will need to be directly registered. They estimated they'll buy back 31% of outstanding, and there's no way that % of stock is held directly. 

[pricingpower]

18 hours ago, bizaro86 said:

They estimated they'll buy back 31% of outstanding, and there's no way that % of stock is held directly. 

Are corporates able to see through to beneficial owners for street name shares?  I don't think they have any visibility outside of 13G/13D filers.

 

Running through the math only aggregating at the registered shares level a 31% buyback does seem high but is plausible, anything look off?

 

They have 3.6mm shares outstanding across 510 registered holders on 25Mar24 (per 2023 10K)

 

Top 5 holders are like 1.6mm shares so 2mm are spread across remaining 505 registered accounts.  That's average of 3.2k shares per account if they were evenly spread (they won't be as some of those accounts are brokers though)

 

A 31% reduction means they expect to buy back 1mm shares which is ~2k shares per registered account.  To de-list they'd need to fully take out a minimum of 210 accounts to get below the 300 record holder threshold that retains governance protections.

 

Seems like it's in zone of possible

[gfp]

On 4/2/2024 at 10:59 AM, KJP said:

 

That is possible.  But take a look at insider ownership.  The structure suggests to me that they want to cash out as many as possible.

 

EDIT:  It's enough of an issue that I wouldn't buy this at, say, $4.80 today.  I bought pre-market and my limit sell order already hit for most of those shares.  I'm going to keep an eye on it and see if the spread widens out again.

 

Man, even thought this tightened up to around a ten cent daily range you can still take $900 per swing out of this range each trip.  I for one have been enjoying the beer money

[Sweet]

 

[Sweet]

Interesting new ETF called Destiny Tech100 debuted last week.  It holds only private companies.  SpaceX is 35% of its holding.  One big problem though, there is a 2.5% management fee!  Another big problem is it is closed end fund, it’s opened at $8 two weeks ago and is already at $56!

[backtothebeach]

1 hour ago, Sweet said:

Interesting new ETF called Destiny Tech100 debuted last week.  It holds only private companies.  SpaceX is 35% of its holding.  One big problem though, there is a 2.5% management fee!  Another big problem is it is closed end fund, it’s opened at $8 two weeks ago and is already at $56!

 

Fascinating. Net assets of 52.6M, current market cap 644M. An easy 10x. People probably don't even know what they are buying, paying for 1000% future growth upfront.

 

As of December 31, 2023:
https://www.sec.gov/Archives/edgar/data/1843974/000139834424005739/fp0087134-2_ncsr.htm
 

Net Asset Value Per Share
Net assets applicable to Common Shareholders		$	52,623,533
Common Shares of beneficial interest outstanding, at $0.00001 par value; 500,000,000 shares authorized, 10,879,905 shares issued and outstanding			10,879,905
Net Asset Value Per Share applicable to Common Shareholders		$	4.84

[gfp]

Oh wow - yeah that's $4.84 per share vs $75 per share at one point on Friday.  Yikes!

[gfp]

This Destiny Tech100 closed end fund is wild!  Lots of entertainment

Edited April 8 by gfp