Dhandho Holdings!

[peter1234]

So he spent 65M for Stonetrust and has another 85M for next acquisition(s).

;)

[no_thanks]

So this makes me wonder what the mechanics of the IPO will be.  We have a mutual insurance company, the most straightforward path is to demutualize, raise capital from policy holders and outside individuals.  This is something other insurance companies have done many times.  Or maybe they try to create a MHC structure where the holding company is public, but the insurance company is mutually owned.

 

If they demutualize the easiest way to buy into the IPO at a fair price is to get a policy with the company.

 

Really interesting idea.  From a first read, demutualizations seem to have a lot of possible outcomes.  Stock or cash payment...

I just we will just have to wait and see what they decide to do.  Have a good one. 

[CorpRaider]

http://www.insurancejournal.com/news/southcentral/2014/07/31/336332.htm

 

The $35 million cash acquisition will include Stonetrust Commercial Mutual Insurance Holding Company, Stonetrust Commercial Insurance Company, and Stonetrust Realty, LLC, as well as Stonetrust Management Services, LLC, the independently owned managing general agent.

 

Proceeds of the transaction will be paid to eligible policyholders.

 

 

Does the press account not indicate that the demutualization will be accomplished via cash payment to the policyholders?  Looking forward to following further developments.

[Evolveus]

So this makes me wonder what the mechanics of the IPO will be.  We have a mutual insurance company, the most straightforward path is to demutualize, raise capital from policy holders and outside individuals.  This is something other insurance companies have done many times.  Or maybe they try to create a MHC structure where the holding company is public, but the insurance company is mutually owned.

 

If they demutualize the easiest way to buy into the IPO at a fair price is to get a policy with the company.

 

 

Oddball - can you elaborate on the mechanics of your closing comment about "getting in on the ipo by buying a policy with them" (paraphrased)

[oddballstocks]

So this makes me wonder what the mechanics of the IPO will be.  We have a mutual insurance company, the most straightforward path is to demutualize, raise capital from policy holders and outside individuals.  This is something other insurance companies have done many times.  Or maybe they try to create a MHC structure where the holding company is public, but the insurance company is mutually owned.

 

If they demutualize the easiest way to buy into the IPO at a fair price is to get a policy with the company.

 

 

Oddball - can you elaborate on the mechanics of your closing comment about "getting in on the ipo by buying a policy with them" (paraphrased)

 

CorpRaider seems to be tuned into this more than myself.  It seems in this case here they're cashing out mutual shareholders with the purchase, I'm guessing the $35m is to cash them out.

 

A mutual company is owned by the policy holders, they are the true shareholders (hence mutual).  So if someone buys them it's the policy holders who are receiving cash for their shares, which they often didn't even know existed.  In many cases these mutuals will IPO, that is they'll raise cash and they give preference to current mutual unit holders.  So if you own a policy you suddenly have this opportunity to buy shares in an IPO, most don't and shares are offered to the public.

 

I'm on the outside here, there are clearly a number of other posters plugged into this much deeper than myself.  I'm just speaking from my experience with mutually held companies in general.  Maybe Dhandho is doing something a little off the beaten path, I'm not sure.  If I were him I'd cash out the policy holders and take control of the company, although all of that depends on state law and what the regulators think of things.  In general a mutually owned company is thought of as safer than a public company, the mutual company is in theory run for the interest of the policy holders, is more conservative and doesn't take undue risks.  In this case you have this conservative insurance company that's being taking over by a hedge fund.  Idle cash that previously was in Treasuries or corporates will be spread around in equity investments, some foreign.  From an optics view for a regulator this appears to be a very risky transaction.  Now if Pabrai can come to the table and show that he will somehow increase the capitalization (IPO perhaps) and won't take terrible risks then maybe that will grease the gears a bit.  I'm sure there are expensive lawyers who can figure all of this out without a problem.

[Evolveus]

Thanks for the feedback, Oddball!

[ERICOPOLY]

I won't be at the Dhandho meeting, so can somebody pickup a set of these paper cups for me?  He should be giving them out with "Dhandho" printed on them or something like that:

 

 

It looks like Pabrai holds the world in a paper cup.

http://www.forbes.com/sites/phildemuth/2013/09/23/how-mohnish-pabrai-crushed-the-market-by-1100-since-2000/

 

 

[elevensecsrt4]

Very interesting developments. I wish Monish luck with this new company!

[wbr]

Another Pabrai Lecture just appeared on Youtube:

 

Boston College, Oct. 9 2014

 

Edit: Video was removed from youtube

[investor-man]

Another Pabrai Lecture just appeared on Youtube:

 

Boston College, Oct. 9 2014

 

https://www.youtube.com/watch?v=A3VZhmas-uc

 

Look at that stache!

[muscleman]

How much does Pabrai charge in Dhandho holdings? Does he charge the typical 2/20?

[peter1234]

Another Pabrai Lecture just appeared on Youtube:

 

Boston College, Oct. 9 2014

 

https://www.youtube.com/watch?v=A3VZhmas-uc

 

Looks like it was removed?

???

[wbr]

Another Pabrai Lecture just appeared on Youtube:

 

Boston College, Oct. 9 2014

 

https://www.youtube.com/watch?v=A3VZhmas-uc

 

Looks like it was removed?

???

 

Indeed, maybe there was something wrong with the video. It will probably be uploaded again.

[wbr]

It's back online

 

[peter1234]

Great! Thanks!

:)

[OracleofCarolina]

any update on the Dhando Holdings IPO?

[wbr]

Mohnish Pabrai speaks at MDI Gurgaon Dec 2014

 

 

At 15:00 he starts talking about Dhandho Holdings.

[nikhil25]

Does anyone have any more info on the IPO? Thanks!

[ERICOPOLY]

Does anyone have any more info on the IPO? Thanks!

 

It was suggested to be 12 months roughly from the closing of the first acquisition.  So that would be roughly at year's end.

 

A new timeline hasn't been suggested as far as I know.

[nikhil25]

Does anyone have any more info on the IPO? Thanks!

 

It was suggested to be 12 months roughly from the closing of the first acquisition.  So that would be roughly at year's end.

 

A new timeline hasn't been suggested as far as I know.

 

Thanks Eric!

[Guest ajc]

 

Looks like Dhandho Holdings is recruiting.

 

http://jobview.monster.com/getjob.aspx?JobId=159155525&jvs=cf,can-16046,can,0&WT.mc_n=olm_sk_feed_NeuvooUS

 

 

 

[Scudbucket]

Thanks for sharing.  This is fishy to me, "an innovative new financial product."  What is he doing creating new products?  I'm not saying it can't work because I don't even know what it is...

[Picasso]

He mentioned before it was "smart" ETF's. Probably not too different than what FRMO is trying to do.  Personally I don't think it is that easy to start an ETF business.

[Packer16]

It looks like Dhando has launched its first ETF, Dhandho Junoon ETF under the symbol JUNE.  Here is a link to the etf site:

 

http://www.dhandhoetfs.com/

 

Lets see hoe this goes.

 

Packer

[Guest]

That's a pretty expensive etf at .75%

 

The etf market is pretty tough. A lot of it is based on price and liquidity (neither I'd bet this would do well on). There are etfs that somewhat do what's he's trying to do - though not in one package. ALFA tracks 13fs (has trailed SPY since inception, CSD for spinoffs (has moderately beaten SPY since inception) and PKW (buybacks and has done pretty well). I do wonder how well buybacks will do in the future since we're at/near all time highs from what I can see. Good luck to those involved.