The problem is, his Networth is based on those paper "gains/losses." His billionaire status does not translate into a billion in cash. It is a summation of all his assets (current + long term) minus his abilities. If the loss did not translate dollar for dollar, that just means he was levered, which makes it even worse. If you read the quote from Hooroo on page one of the thread, it notes that Les bought his shares at a much higher price point than current levels, which means the hit he took is really as real as they get.
For those who care, Les lost another $15,000,000.00 or so again today... Give that a minute or two to sink in. But at least he owns the Houston Rockets! Right? Merry Christmas, Les!
Company Description The First Marblehead Corporation, together with its subsidiaries, provides outsourcing services for private education lending in the United States. Announced 2Q EPS $0.85 vs. $1.16 and 6 mos. EPS $2.34 vs. $1.09. S&P STARS SELL ** EPS 2009 EPS Estimate $4.51 2008 EPS Estimate $3.07 Telephone 800-895-4283 Web http://www.firstmarblehead.com Investment Premise 12/07/07 11:41 am EST... UPDATE - S&P DOWNGRADES SHARES OF FIRST MARBLEHEAD TO SELL FROM HOLD (FMD 16.4**): FMD cuts its quarterly dividend by 56% to $0.12 per share. At current price levels the stock is yielding 2.9%. Separately, we are reducing our FY 08 (June) EPS estimate by $0.59 to $2.97. Our 12-month target price remains $13, 4.4X that estimate. This is a significant discount to historical levels to reflect the possibility that FMD will not be able to securitize student loans in future quarters. PerformanceShare Earnings 3 Mo Sep ($) 1.80/1.49 Last 12 Mos ($) 4.23 P/E 2.90 5-Yr Growth % +66 Dividends Rt&Yd 0.48 3.96% Last Div Q 0.120 Ex-Date 12/13/2007 Paydate 12/21/2007 Market Action 07 Rng ($) 57.56-11.69 Avg Vol 3061359 Beta 2.16 Inst Holdings 78% Balance Sheet Cur Ratio LT Dt(M) 10 Shs(M) 93.40 Rpt. of 06/30/2007 Yr High ($) Low ($) P/E Range Div Jun EPS ($) Rev(M) Net(M) BV/SH 2006 55.25 20.96 22.6 8.6 .38 2007 3.92 871.3 371.3 8.95 2005 48.84 13.92 30.7 8.8 .16 2006 2.45 563.5 235.9 6.03 2004 39.70 14.45 50.3 18.3 2005 1.59 417.9 159.6 4.27 2003 16.86 10.66 49.6 31.4 2004 .79 199.2 75.2 2.83 Earnings Estimate: FV 5C+ ASE,CBOE,Ph:Cycle 3 3-for-2,'06 Mean Estimates Current Previous High Low Number of Estimates Current Quarter (Q2-2008) Street -0.14 0.02 -0.03 -0.28 6 S&P -0.29 -0.29 Current Year (2008) Street 3.52 3.66 3.68 3.07 7 S&P 3.07 2.97 Next Year (2009) Street 4.36 4.46 5.00 3.90 5 S&P 4.51 5.26 Street Guidance Buy Buy/Hold Hold Hold/Sell Sell Relative Strength Opinions 5 1 2 Next Expected EPS Report Date: Late January Est. 5 Year Earnings Growth 52% ROE 47.30% S&P Stars 2 (Sell) S&P Quality Ranking NR ROS 42.60% Fair Value Rank 5+ This is a standard S&P research report I get from work. The FMD chart looks like a roller coaster. In Apr 05 it was trading at around 50 and dipped down to about 13 and then went back up to 58 in Jan 07. It has never been down to 11.24, which it closed at today. S&P just switched it to sell from hold on the 7th. He must believe in the company if he is still a large owner.
I hope the team is not up for sale. So many teams just cruise year to year; I'm confident that Les pursues championships.
Subprime Les has slickly packaged this bundle of losers and fickle would be superstars into a bright shiny CDO, securitized for our mental and emotional capital. He got Hollinger's rating agency to rate this turkey AAA, when instead it was a bunch of junk-grade crap, and he compounded it by getting rid of his prime asset, valuable East Coast property and replaces it with some investment in something more "phoenix like". Then this season the deal has collapsed, the defaults are rolling in and the losses keep piling up, we're a quarter of the season in, and at best we've got some BBB junk, let the writedowns begin! MERRY CHRISTMAS HAPPY HANUKAH LESLIE
I am so happy for Les today...yes capital infusion, but then he could have shorted the market since this past Feb. and made himself a ton of dinero...The man deserves his wealth!!! http://biz.yahoo.com/iw/071221/0342912.html
You have my vote for the new Riddle-King of the BBS. Clever. The "valuable East Coast property" is looking pretty good right now. It had much more value than we all realized. I hate to admit it, but probably should have not sold it.
maybe this is why les took away all the food he used to provide for the players in the locker room and on the road...i heard they are none to happy about the perceived slight
That probably has more to do with the agreement with the food service providers than Les' personal finances. I heard they recently renewed with their concessionare which brought some changes.Plus, Les isn't going to go into the minutia of the expenses of one of his business operations to offset the performance of another. And he's going to keep the Rockets at least until he doesn't have a Chinese center anymore. It's turning out to be a pretty cost-effective way for him to market Anta shoes to China.
Glad the share price now reflects the absurdity in the share price fall from the previous 14 days (continuous I might add). I was a holder of this stock until today, out at 18.11, I think the deal is a short term fix, very dilutive, eliminating of dividend, and the 18-20% (writeoff) buried at the bottom of the press release and during the cc towards the end ("uh one more thing, we have an 18-20% writeoff") alarmed me. GS once again walks away paying a very low price, and being the black box that they are, this obviously has something to do with triple witching (options expiration) today. They had the 10's, 12.5, 15's, and 17.5 to leverage their end of the year numbers. Again, I don't think this is a bad business at all, but holding shares through the weekend, right after options expirations and 70% upward explosion is not my type of long term horizon investing. I could go on and on about the dynamics of this sector (privatized school loans), but these type of businesses WILL survive. So good luck to all the longs and hopefully more gains. On SLM, their forward contracts are just disturbing, the amount of loans they can offer is also limited by the federal government. I usually read the transcript of cc's, but luckily I tuned into the SLM one. S.K.
