From what I have gleaned, they will have a book value of about $14 after they close the sale of their clearing operations to Fiserv. I guess this number is a guestimate since they will have to pay significant taxes on the sale. Their remaining NITE position is subject to lock up, but understand they can be partially,artificially hedged. I don't know how this is done, they can't buy puts on restricted shares, maybe they short other similar stocks? Maybe an investment bank creates a private synthetic put?
So in any event, in a few weeks they will have a huge cash hord, and the question becomes, what's next. Of course online brokerage sounds sexy, but with so many entrants in the field, how do they compete with the likes of Ameritrade, eTrade, and Schwab? They are currently a low end full service firm. I don't quite see what will drive this stock. Maybe they keep buying up little brokerage offices around the country. I don't see that driving the stock in the short term.
I would like to see a business strategy that will get me excited about the long term prospects of this company. Right now they are an invisible entity. No one in the business has heard of them. So far, management has done an incredible job of unlocking value and building shareholder equity. Much of that was by selling assets and having a huge score with NITE. But what is next? Someone, please answer me that!
Thanks,
Goolie |
