March 3, 2021

Podding with Dan Nathan, Guy Adami and Danny Moses

It was a lot of fun reconnecting with Dan and Guy this week, recording an episode of their On The Tape podcast and reminiscing about the classic days of CNBC’s Fast Money. We talked about the current boom in SPACs and collectibles, trading with “the house’s money, and my origin story in the brokerage biz. Danny Moses – you might know him as one of the lead protagonists of the book and film ‘T...

The post Podding with Dan Nathan, Guy Adami and Danny Moses appeared first on The Reformed Broker.

What If Interest Rates Don’t Matter as Much as We Think?

Following the Great Depression, Wall Street was a barren wasteland. No one wanted to work in finance. The stock market was dead money for years. Volume had all but dried up on the exchange. This was not a place up-and-comers wanted to work. That all changed after the WWII boom that carried over into the 1950s. By the time the 1960s rolled around an entire crop of new investors who weren’t around for the carnage of 1...

The Ohio Art Company – Reverse Split (Squeeze Out) $OART

Ohio Art (OART) sent out a notice regarding a 1:2,300 reverse split (squeese out) that will cash out smaller shareholders at $10.05. The announcement says that controlling shareholders (the Killgallon family) control enough stock to push it through. 

The announcement does not have 2020 financial statements, and OART reports only annually. Given the lack of disclosure and the price where the stock was trading prior to the announcement, we consider this split potentially abusive.

One investor reaction on Twitter:

Ohio Art Reverse Split Notice of Meeting by Nate Tobik on Scribd

Fidelity D & D Bancorp, Inc. $FDBC to Acquire Landmark Bancorp, Inc. $LDKB

A tiny bank acquisition in Pennsylvania announced on Friday:
Based on the financial results as of December 31, 2020, the combined company would have pro forma total assets of approximately $2.05 billion, total deposits of approximately $1.8 billion, and loans of approximately $1.4 billion.

Once the merger is complete, Fidelity will have 25 retail community banking offices in Northeast and Eastern Pennsylvania, offering a complete range of consumer and business products, including wealth management. Its Customer Care Center is open 7 days a week for the convenience of its clients. Additionally, Fidelity Bank offers the ability for its clients to apply for consumer deposits, real estate loans, and personal loans through its robust online application processes.

Landmark shareholders will receive 0.272 shares of Fidelity common stock and $3.26 in cash for each share of Landmark common stock that they own as of the closing date.

Based on Fidelity’s 10-day average closing price at February 25, 2021 of $55.00, the transaction is valued at $43.4 million or $18.22 per share. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes.

As of December 31, 2020, Landmark had total assets of $354 million, total deposits of $287 million and total loans of $280 million.

Acquirer FDBC is paying mostly stock with some cash, valued at $42 million with acquirer stock down 6% on Friday. That is 1.17x the year-end 2020 book value of target LDKB, which earned 4% on equity last year and had assets of $354 million. 

Both banks are in the Scranton area.

Target stock was offered on Friday at a 1.7% deal spread.

This Week on TRB

With my best friend, just trying to fight our way through the end of corona winter. I keep telling him it’s almost over… Thanks for all the birthday wishes this week. I appreciate it, really means a lot to me.  And thanks for the big response to this weekend’s podcast. It’s an incredible and shocking story that I really felt needed to be told and I was fortunate to get one of the foremost authori...

The post This Week on TRB appeared first on The Reformed Broker.

The Best Time to Give Back

One of my favorite Curb Your Enthusiasm episodes of all-time is the Anonymous Donor: Subscribe to The Compound here. Further Reading: How Spending Money Affects Your Happiness Now here’s what I’ve been reading lately: Levered work, balanced sheets (Ryan Krueger) What is NBA Top Shot? (Irrelevant Investor) Substack vertigo (Reformed Broker) Clapping through it (Justin Paterno) The burning of black Wall Street...

Stocks do very well during periods of rising rates. Facts, not opinions.

We don’t know how high is too high. But is it likely that 1.5% treasury bond yields are going to be an insurmountable absolute level for the stock market? No it isn’t. And if history is any guide, we should be welcoming rising rates that are rising in response to higher growth expectations. This chart looks exactly like it should for a growing economy coming out of an emergency. Yes, valuations for most expen...

The post Stocks do very well during periods of rising rates. Facts, not opinions. appeared first on The Reformed Broker.

Talk Your Book: Investing in Moonshots

Today’s Animal Spirits: Talk Your Book is presented by Direxion. We spoke with Dave Mazza, head of product at Direxion about the Direxion Moonshot Innovators ETF. We discuss: Finding early-stage innovative companies in the public markets How to measure innovation in smaller stocks Some unknown disruptive growth companies Adding complimentary ETFs to your portfolio What sort of growth are we seeing in tiny growth comp...