First Marblehead Surges on Securitization News

Wow! When I wrote my most recent piece on First Marblehead's (FMD) upcoming securitization of student loans of an estimated $1.84 billion, the stock was at $52.35. While I expected it to go up, it has already blown past my most optimistic hopes. As I write this (on Friday, September 15, the day the company announced the deal), the stock has just passed through 60, up over 15%.

I am still bullish on the company, but in the short term, caution is probably in order. The stock is likely to make a significant move once the deal closes and final numbers are in, and while I believe it will be to the upside, given Friday's gains, short-term expectations may be too high. That said, I expect to add to my position on any pullback.

FMD 1-year chart:

By Neal Shanske, Contributor - Inelegant Investor

Neal Shanske holds a position in FMD stock.