Private Equity Stock Review, Wednesday, 8/11/2010.
Los Angeles, CA 59...74F Sunny.
Chicago, IL 75..90F Sunny.
Delray Beach, FL 79..99 Sunny.
Port Jefferson, NY 68...88F Rain.
1. Fortress (FIG) to Buy AIG (AIG) Unit.
2. Another Wild Day at Liquidmetal (LQMT) $0.99.
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Has anyone bothered to take note of the above local temperatures, where we have an office or representation ? Look at LA. While the rest of the country is scorching and sweating TBO's, it has trouble breaking 75 degrees. That's barely swimming weather.
1. Fortress (FIG) to Buy AIG (AIG) Unit.
We haven't talked much about the group -- because (asides from when we started the list during the dark days of 2009) they should in general perform "greater" than the market -- and we have been sort of fence sitting with our enthusiasm for the broader market -- though some days we think "this is the start" of a big run and some days we "think this is the start" of a return to Dow 7000.
In any event, you (we think) will make more money in these companies in a bull market and lose more in a bear market -- as compared to the market.
Back to Fortress (FIG) -- while we have done very well in these stocks (greatly outperforming the market), we're guessing the street has lost interest, because the deal that Fortress just announced (we think) should have sent the stock up a $1.00.
Not so much on "the deal" itself but because they are being handed the keys to the bar (and maybe many more bars) -- when no one else is prepared to take over, regardless of the price.
Institutional investors question how they will fund the loans on an ongoing basis. We think since everyone else is getting out of the consumer loan business, that this will become an 800 pound Shylock, the Great White of loan sharks, the lender of last resort -- who always get paid.
To put it in nicer terms, "This will be the golden era for consumer finance non-banks," Wes Edens, the founder of Fortress, told the Financial Times.
No real protection here kids: http://www.nytimes.com/2010/02/25/opinion/25thur2.html
Maybe the days of 80% are gone, but 30% is here to stay --and if you can't make money lending at 30%...
We don't think it was ever in the Fortress play book, to buy ridiculously distressed assets after a massive bear market, because when they went public, no one was predicting Armageddon.
But here we have it (or had it) and here we have Fortress ready, willing and prepared to pick up the AIG small loan customers (via American General Finance -- who financed the windows on our old Victorian).
This is how great fortunes are built. 10 years from now this will look like pre-meditated genius, but in reality -- it's just another case of being in the right place at the right time. Kind of like how we showed up to the Private Equity group in 2009, after they fell 80 plus percent !
Rumored purchase price (80% stake), $100 million. AIG valued it at $2.4 billion last week.
Fortress for the record IPO'd at $18.50 and then jumped to $35 (the first of trading) in early 2007 and then tumbled to $2.25, where we added it to the Watch List in January of 2009.
LT Chart: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=fig...
Och-Ziff (OZM) $13.90 up 122%
Rodman & Renshaw (RODM) $2.16 up 118%
Fortress Investment (FIG) $4.03 up 79%
GLG Partners (GLG) $4.40 up 77%
MVC Capital (MVC) $12.32 up 54%
KKR Financial (KFN) $8.52 up 36%
The Blackstone Group (BX) $10.57 up 36%
Ares Capital (ARCC) $14.30 up 6%
(Oh my, perfect batting average.)
Reuters explains it best:
NY Times take:
Financial Times take:
About American General Finance
American General Finance (AGF) is a leading provider of consumer credit based in Evansville, Indiana. AGF finances mortgages, secured and unsecured personal loans and secured retail sales finance products. In addition to its lending activities, AGF offers credit and non-credit insurance. AGF has over one million customers and originates loans through its more than 1,100 branches located across the U.S., Puerto Rico and the Virgin Islands. For more information, visit www.agfinance.com
2. Another Wild Day at Liquidmetal (LQMT) $0.99.
Well, well, well...
Charts says it all. What a hoot.
Opened at $0.93,
plunged to $0.75,
spurted to $0.85 (the type of return most would like in a year),
back down to under $0.80,
a run to $0.90
flat for two hours at $0.85 as traders digest their donuts
then a run to $1.05 as the sugar rush kicks in,
and then "oh no" back down to $0.85 as blood sugar levels drops
and then a nice march to a nose under $1.00 at the close.
Then -- OMG news (8k) after the close. Follow this bouncing ball:
"On August 5, 2010, the Company repaid in full all of its outstanding 8% Senior Secured Convertible Notes (the �Secured Notes�) in the amount of $8.2 million, all secured debt to HANA Financial in the amount of $0.3 million, and its unsecured debt to Ricardo Salas and Norden LLC in the aggregate amount of $2.4 million. The foregoing obligations were paid with proceeds from the previously announced strategic licensing transaction with Apple Inc. Upon the payment of the Secured Notes and the HANA Financial indebtedness, all security interests in Company assets securing such obligations were released and terminated."
REPAID $8.2 million dollars ??? REPAID with proceeds from Apple ??? WTF.
Full 8K: http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7099047
Also noted, deal of the century:
Specifically, 692,857 restricted shares were issued to Bobb Biehl for approximately $97,000 in director and consulting fees owing to him as of January 2, 1010.
Nice return Bobby ! Where you parking your boat ?
Disclaimer: FIG Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts, but instead represent only the Company's beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that such events may differ, possibly materially, from these forward-looking statements, and any such differences could cause future events to differ materially from the results expressed or implied by these forward-looking statements. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. The Company can give no assurance that the expectations of any forward-looking statement will be obtained. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Disclaimer: LQMT. This press release may contain "forward-looking
statements" that involve risks and uncertainties, including statements
regarding our plans, future events, objectives, expectations, forecasts,
or assumptions. Any statement in this press release that is not a
statement of historical fact is a forward-looking statement, and in some
cases, words such as "believe," "estimate," "project," "expect," "intend,"
"may," "anticipate," "plans," "seeks," and similar expressions identify
forward-looking statements. These statements involve risks and
uncertainties that could cause actual outcomes and results to differ
materially from the anticipated outcomes or result, and undue reliance
should not be placed on these statements. These risks and uncertainties
may include: our limited operating history in developing and manufacturing
products from bulk amorphous alloys; the adoption of our alloys by
customers; the commercial success of our customer's products; our ability
to identify, develop, and commercialize new applications for our alloys;
competition with suppliers of incumbent materials; the development of new
materials that render our alloys obsolete; the ability to manage our
anticipated growth; our limited direct experience in manufacturing bulk
alloy products; scaling-up our manufacturing facilities; protecting our
intellectual property; problems associated with manufacturing and selling
our alloys outside of the United States; and other risks and uncertainties
discussed in filings made with the Securities and Exchange Commission
(including risks described in subsequent reports on Form 10-Q, Form 10-K,
Form 8-K, and other filings). Liquidmetal Technologies disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise. Not a client.
Going Concern Statements.
We would like to point out that the majority of companies listed on the
OTC Bulletin Board have factors which create an
uncertainty about the their ability to continue as a going concern. These
concerns are typically related to financing (or lack of), competitive
environments, lack of operating history and operating at loss levels which
is typical of most start-ups.
These statement can usually be found in their most recent 10Q filings and
typically you don't have to dig to far down past the financial tables. We
like to use http://www.pinksheets.com for quick and easy access to SEC
filings. We think it would be wise for most investors to assume that all
companies listed on the OTC Bulletin Board (and many on NASDAQ) have going
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