First Marblehead (FMD)

HenryTo · Posted: Fri Feb 17, 2006 1:04 am Post subject: First Marblehead (FMD)

Interesting take on FMD from Bankstocks.com. I haven't kept track of it since it tanked in October:

http://www.bankstocks.com/article.asp?type=1&id=9880853

rffrydr · Posted: Thu Mar 26, 2009 9:16 am Post subject:

In a twisted change of tone, Mr. Brown has found his sacrificial elephant, Citi--brown man out???

http://seekingalpha.com/article/127705-pandit-s-letter-to-citi-shareholders-lame

Then while spitting venom at Krugman he downplays the PPIP with the same old bid/ask criticism:

http://seekingalpha.com/article/127708-ppif-a-step-in-the-right-direction-but-not-a-cure-all

This has stymied many better thinkers, and in the end may be valid--but few non-traders seem to understand the value of the govt's free "put" option. If trades at 30 will runoff at 80 a price guarantee will soon push that price to 50. Banks won't have the luxury of waiting for 80 (though many will) and will be packaging up if for no other reason that they're sitting on piles of govt. money.

Meanwhile behind the scenes these assets may be getting readied without touching the portfolio at all:

http://www.nypost.com/seven/03252009/business/double_dippers_161157.htm

Time will tell but "lucky" Tom Brown should be pulling hard here.
_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Wed May 28, 2008 1:56 am Post subject:

Prudent Speculations on First Marblehead's lifeline:

http://seekingalpha.com/article/78821-first-marblehead-fights-to-free-itself-from-credit-market-whims?source=side_bar_editors_picks

rffrydr · Posted: Wed Jan 02, 2008 10:33 pm Post subject:

Interactive map of College Borrowing with surprises: Princeton comes in low at $5K.

http://finance.yahoo.com/loans/article/104106/Teens-Gone-Wild-on-Debt
_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Fri Dec 21, 2007 8:48 am Post subject:

Goldman with a $260.5 million injection into FMD - and most notably, will provide a $1 billion warehouse facility for funding purposes. The terms of the latter are still unknown at this stage, however.
----------------------------------------------------------------------------------
First Marblehead Sells Stake in Company
Friday December 21, 9:39 am ET
First Marblehead Agrees to Sell Portion of Company to Goldman Sachs Unit for $260.5 Million

BOSTON (AP) -- Student-loan services provider First Marblehead Corp. said Friday it has reached an agreement to sell a 16.7 percent stake in the company for $260.5 million to GS Capital Partners, a unit of Goldman Sachs Group Inc.

GS Capital Partners will initially invest $59.8 million to acquire securities convertible to 5.3 million shares of common stock. The conversion price is $11.24 per share, the price at which First Marblehead closed at Thursday.

GS Capital Partners will then spend $200.7 million to acquire additional securities convertible for up to 13.4 million shares of common stock at a price of $15 per share. Once converted, the shares will represent 16.7 percent of First Marblehead's outstanding common stock, but GS Capital Partners will not hold more than 9.9 percent of the company's voting shares at any time.

First Marblehead will allow GS Capital Partners to nominate one member to the company's board of directors as part of the deal.

Goldman Sachs will also provide a $1 billion warehouse facility to allow First Marblehead to access a new source of funding.

Shares of First Marblehead rose $4.76, or 42.4 percent, to $16 after the opening bell. Shares have traded between $11.01 and $57.56 during the past year.

rffrydr · Posted: Sun Dec 09, 2007 8:08 pm Post subject:

That analysis leaves out the non plus ultra of the student loan business: "till death do you part."
_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Sun Dec 09, 2007 2:27 pm Post subject:

The Motley Fool on FMD:

http://www.fool.com/investing/general/2007/12/06/first-marblehead-showing-cracks.aspx?source=iflfollnk0000003

rffrydr · Posted: Thu Dec 06, 2007 8:57 am Post subject:

Tom Brown's fund is down 50%.

http://www.forbes.com/reuters/feeds/reuters/2007/11/30/2007-11-30T212220Z_01_N30286575_RTRIDST_0_HEDGEFUNDS-NOVEMBER.html
_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Wed Dec 05, 2007 9:22 pm Post subject:

Another downgrade for FMD, as analysts question its entire business model in the midst of the current credit crunch:
----------------------------------------------------------------------------------
First Marblehead Fall on Downgrade
Wednesday December 5, 6:36 pm ET
First Marblehead Shares Sink on Downgrade, Rising Concerns Over Ability to Securitize Loans

NEW YORK (AP) -- Shares of First Marblehead Corp. sank Wednesday after an analyst downgraded the stock on rising concern over the student lender's ability to securitize loans in December and beyond.
Shares plunged $5.05, or 20.2 percent, to $19.93 in Wednesday trading, a 52-week low. Shares have traded between $24.98 and $57.56 in the past 12 months.

Sandler O'Neill & Partners analyst Michael Taiano downgraded the stock to "Hold" from "Buy," saying that recent credit concerns raised by the rating agencies reduce the potential upside for the shares.

On Tuesday, Moody's said it is reviewing 16 tranches of First Marblehead deals for possible downgrade. Analysts believe the company may forego the securitization of loans in the second quarter.

First Marblehead helps banks like Bank of America Corp. and JPMorgan Chase & Co. package students loans into pools and sell them as bonds. The company charges fees for advising on the deals and helping funnel the payments to the bondholders. Virtually all the company's revenue is generated from these period securitizations.

"We are concerned whether First Marblehead's current structure can be sustained through a prolonged liquidity crunch and that its alternatives are limited and less economically attractive," Taiano said.

Taiano cut his fiscal 2008 earnings-per-share estimate to $3.56 from $4.40 and his 2009 estimate to $3.90 from $5. Analysts polled by Thomson Financial, on average, anticipate 2008 earnings of $4.37 per share and 2009 earnings of $4.95 per share.

Analysts at Bear Stearns & Co. and JPMorgan Securities also reduced their earnings estimates.

Bear, Stearns analyst David Hochstim cut his fiscal 2008 estimate to $3.23 per share from $4.56 per share.

"This ratings action places even more pressure on First Marblehead in an already difficult securitization market as potential buyers for the company's subordinate notes would require more compensation for risk than they would have in previous periods," Hochstim said. "Without access to securitizations, earnings in future periods will likely deteriorate even further than we currently estimate."

Hochstim said he expects the company to securitize loans in the March quarter and recoup some of the volume lost in December.

George A. Sacco Jr. of JPMorgan Securities reduced his full-year earnings estimate to $3.57 per share from $4.55 per share.

Sacco said he is encouraged by the company's proactive steps to improve credit performance, such as contacting delinquent borrowers after 60 days instead of 90 days and implementing tighter underwriting standards.

"First Marblehead can manage through a quarter or two of volatility and limited liquidity primarily by using its option to have lenders hold loans until conditions improve," Sacco said. "However, the longer-term viability of First Marblehead's business model would likely start to be questioned if the company cannot access the securitization market for three to four quarters or longer."

Sacco anticipates the asset-backed securitization market to remain challenging through at least the first calendar quarter of 2008.

rffrydr · Posted: Wed Nov 28, 2007 11:36 pm Post subject:

Mr. Brown comes out from shadows:

http://seekingalpha.com/article/55549-fbr-s-latest-first-marblehead-downgrade-makes-no-sense
_________________
Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Tue Apr 24, 2007 9:13 am Post subject:

Shakeout in "subprime" education, DeVry noted prominently:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1dp22_bhJJc&refer=home
_________________
Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Mon Apr 16, 2007 9:29 pm Post subject:

rffrydr · Posted: Mon Apr 16, 2007 10:15 am Post subject:

Everybody wants to buy today.

FTSE beat it's old highs last night and DAX on the oil stocks/currency looks likes it's launching--only one problem, the XLE.

Euro now rules global bond issuence.
_________________
Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2164

Time to buy may have past ... at 10 am EDT? If it draws a bullish candle today there may still be "bounce" left in it? Not for me, but maybe an opportunity ...
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

HenryTo · Posted: Mon Apr 16, 2007 9:39 am Post subject:

FMD tanks 25% in light of the buyout news - as investors speculate that FMD will lose its two biggest clients (JPM and BAC) since they were a part of this buyout deal as well. Together, JPM and BAC make up more than 40% of FMD's total revenue.

rffrydr · Posted: Mon Apr 16, 2007 9:11 am Post subject:

At the same time SallieMae gets taken private!

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070416-000227-0757

25 Billion. Democrats will be thinking about this next weekend.