Financial Services

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Measuring Square

Square (NYSE: SQ) is coming public as a $1B revenue company with quite a few moving parts. There’s the negative margin Starbucks business which is going away, plus the “ratchet” provision whereby prior investors will have their number of shares adjusted based on the IPO price to preserve their prospective returns. We suspect it will…

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The Problem with PayPal

There’s a big gap between the PayPal (PYPL) story/investor slide deck and market reality. As an investor we like it – hits all the right notes and management has all the right answers. But as a user we scratch our head and wonder where all the innovation is. (PayPal was very innovative in the early…

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Everyone wants into LendingClub

LendingClub (LC) is one of the most anticipated public offerings of the year and is expected to price Wednesday night to trade on Thursday. They just raised the range to $12-14 from the prior $10-12. The market is acting poorly going into the planned pricing which could help keep the shares from running away from…

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Sidoti Search for Growth and Profit

In the spirit of full disclosure from 1995 to 2004 I was an equity analyst, research manager and director of equity research at two different “boutique” brokers. My experience there, particularly with the last one at Adams Harkness in Boston (which was acquired by Canaccord Genuity), greatly informs my analysis with this type of business….

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Ally Financial is another consumer finance powerhouse

Ally Financial (ALLY) came public on April 10, 2014 with a bottom-of-the-range pricing of $25. That still puts the market capitalization at close to $12B. The shares have been flat and are now trading at $24. Ally is in the same general space as Santander Consumer (SC) which came public in January of 2014. Similarly…

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Santander Consumer USA (SC) is a New Consumer Finance Powerhouse

Santander Consumer USA Holdings (SC) is now planned for pricing late Wednesday, January 22nd, after getting a very strong reception from institutional investors. The management team has built a remarkable firm over nearly 20 years and now stands as a leader in the subprime lending space. The deal is being led by Citigroup and JP Morgan…

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Why you might want to own Artisan Partners

Artisan Partners (APAM $27-$29) is a fund manager with $75B of funds under management. Of course they have a story and a strategy and some good performance but they are still a fairly conventional fund manager. Having said that they have proposed a transaction that has some attractive features: First and foremost is the quarterly…

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XOOM IPO could go BOOM

XOOM, scheduled to price this week, looks like another IPO poised to do very well as a public company. The last one that looked this promising was ExOne (XONE) which priced above the range at $18 and quickly traded up to a high of $32. ExOne has benefited well from the hype around 3D printing….

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Performant Financial IPO Roadshow Briefing Sheet

Deal: 11.54MM shares (17% primary) at a mid-point of $13 = $150M IPO. NASDAQ: PFMT plan is to price on August 10. Books: Morgan Stanley, Goldman, Credit Suisse, Wells Fargo with Co-Managers: SunTrust and Blair. Company provides “technology-enabled solutions in recovery of financial assets.” Different than PRAA which acquires distressed assets. Focus is on student…

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WageWorks – A quiet IPO success

WageWorks (WAGE) priced on May 10, 2012 at $9 which was just below the filed range of $10-12.  Since then however the shares have been under accumulation and are now changing hands at $15. WAGE is an example of the type of solid IPO that slips between the cracks of the IPO system. The deal…

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