my last post. . .back to the shadows
netp is firm; robby stephens says it will be one of the better deals this year. it would take a liquidity crisis like october to sidetrack it at this point.
the insurance company is not worth anything close to $29 per share, but that's ok, at least you guys are trying. this company changed its accounting last year so that changes in the market value of its equity holdings are run through the p/l as 'earnings.' this is not allowed in the us, but this is a jersey-domiciled company, and accounting can be pretty creative in offshore tax havens. . .
the problem with this sort of treatment is that it treats unrealized gains in marketable securities as if they are recurring. they aren't. and no buyer, financial or strategic, will pay more than 1x for them.
the way to get the true 'value' of this company is to figure out what the statutory cash flows coming out of the insurance sub are worth (of course no one in this forum has that number, but its out there), put some discounted value on the private equity holdings, figure out what the residual interest in BICC and SAI are worth, and go from there.
i find it interesting that no one here has brought up several fundamental issues with this company. do people here realize that LPGLY has bought back more than 10% of their stock over the last 12 months? how many 'internet' companies buy back stock or have the cash flow to do so? or that the cfo won't return calls (even to major institutions) because they don't want the stock up? or what jersey law is as it relates to management buy-outs? or that the chairman owns 25% of the stock?
or here's a more fundamental issue--LPGLY owns Berkley Capital. Berkley Capital manages a pool of venture capital funds, in which LPGLY is itself an investor. what is the standard economic model for a vc firm? the firm usually gets 200 basis points of assets plus a 20% carry (20% of the profits). . now, clearly the principals of BICC take home a big chunk of that cash, but there have to be some residual profits for the parent company. . .almost a form of double dipping.
good luck with this one, all. to compare it to pwcc and wcap is laughable. . .
and thanks for the info on packeteer and rampnet! (no joke)
back to the shadows. . .
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