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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: TRIIBoy who wrote (3113)	9/18/1998 8:09:00 PM
From: John Rowton	Respond to of 18998

It was a very profitable mini-squeeze, the question is; Did he cover at 15 dollar area and everyone else rode it back up?

To: TRIIBoy who wrote (3113)	9/19/1998 7:04:00 AM
From: Mr. Pink	Read Replies (2) \| Respond to of 18998

Everyone makes mistakes--even Mr. Pink. Nothing is guaranteed, even a T5 short dog like FP. Remember the risks here: PVN has an cheap currency--it's own stock trades at 10X book value. A case can be made that there are significant synergies between the PVN's credit card business and and FP's mortgage as proceeds from FP's lending activities are often used to repay higher interest and non-tax deductible credit card debt. PVN has a direct mail business but no television marketing expertise. Those are the bull cases. However, how much would PVN's management really pay for the above synergies. Remember FP's book is around 13 bucks a share. It also holds about 13 bucks a share of radioactive interest only strips whose prepay assumptions and credit loss assumptions are way too liberal. At a minimum the portfolio should be marked down 20% leaving you with 10 bucks of adjusted book value. As for earnings, the company is dependent on pernicious "gain on sale" accounting. Woe unto companies utilizing this hocus pocus to boost their create earnings out of thin air, like magic. Have you seen what has happened to SFC since it stopped its gain on sale bogusness? It is practically bankrupt and its high yield debt trades around 35 cents on the dollar. Nope PVN management is too smart and cares about its shareholders too much to acquire FP. Imagine how the stock would tank if they went thru with the ill conceived bid. As for the other rumored bidders GE is a notorious bottom fisher and famous for using "bate and switch" in its business dealings; they would not doubt like to buy the company--at 8 or 9 dollars a share. All of the above are Mr. Pink's opinions. Remember, short selling is risky and volatile and will give you ulcers. Nevertheless all the pain and aggravation is worth it on those days when for a moment reality reigns, panic sets in and one's short position plummets to fair value. On such days while analysts scratch their heads in their natural state of confusion, longs are punished for their greed and gullibility, management's manipulations are exposed and their companies are ruined, Mr. Pink and His affiliates, soldiers, operatives, minions, lemmings, associates and others who heeded His advice can may crack an imperceptible smile knowing that justice has been done and that their iconoclatic views for which they were scorned, criticized and villified were proven right in the end. Such sweet victory was His in FPAM, REXI, CLCX, MEDA, GFI, MRVC, ABTE, CCSI, TWTI, SYQT and many others. He suspects that within a month, the market's cruel justice will be meted out on all involved in the FP debacle as well. Only time will tell and only God knows the outcome. Mr. Pink Mr. Pink