Seeking Alpha

Insider sale at Medallion Financial

  • It was raining hard in Frisco ... TAXI tumbles 6.8% with an open market sale of 20.3K shares of stock by Chairman and CEO Alvin Murstein one bit of notable news floating about.
  • Longer term of interest to Medallion Financial investors would be the threat to its business model posed by Uber (which just raised $1.2B at a $17B valuation), Lyft, and Sidecar.
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Comments (16)
  • vaisfordoglovers
    , contributor
    Comments (56) | Send Message
     
    Your threat from UBER comment is incorrect. There is no threat to TAXI. The recent selling is highly overdone. This selling is irrational and it should correct itself in short order. Anyone thinking they are selling a taxi business because there is some threat from Uber is sadly misinformed. Yes, a large subsidiary of Medallion Finance is its bank which does lend a large portion of its portfolio against Taxi Medallions. However, as stated by its president in the last conference call: ""The taxi industry remains extremely strong in New York and in all of the markets we service, as does our medallion loan portfolio, which has an average loan-to-value ratio under 40%. " The most important part of that statement is how well over collateralized these loans are, i.e. the value of the medallions collateralizing the loans is more than 2.5 times the debt! TAXI is under no threat to its business from the ups and downs of the taxi business itself. It is a well run and collateralized lender which is also expanding into other areas of lending. One should do some actual research before betting against this stock thinking that somehow it is an UBER competitor. That is very foolish thinking.
    16 Jun 2014, 03:30 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    So are you a buyer at these levels ?
    17 Jun 2014, 09:38 AM Reply Like
  • vaisfordoglovers
    , contributor
    Comments (56) | Send Message
     
    Yes, very much so.
    20 Jun 2014, 03:11 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    Position size? Average price ?
    20 Jun 2014, 03:13 PM Reply Like
  • BDHPlayer
    , contributor
    Comments (165) | Send Message
     
    Did you have one more fare to make your day?
    16 Jun 2014, 04:29 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    Travis Bickle says "You talkin' to ME ?"
    17 Jun 2014, 09:40 AM Reply Like
  • alarriva
    , contributor
    Comments (10) | Send Message
     
    I really would be curious to see how much incomes are down for Taxi drivers. It seems like we're seeing some people saying that they make as much on Uber as they did driving a cab, but that they like Uber better because it's more flexible in terms of shift length, breaks, ability to do work while waiting for a fare, ect.

     

    Taxi is at risk to rising interest rates because Medallions are a fixed income asset of sorts. But, they also aren't really too much at risk because of their LTV's and the ability to liquidate loans if prices drop.

     

    So, who owns a Taxi company ... and what is going on there? Are lease rates for cabs going up or down or? Uber is pretty big in San Francisco, but they only have .17% of fares in New York City. So, maybe if they triple it's only going to be 5%? If there are cabs waiting for you, why would you want to use Uber -- it will be too slow. But, if you live in the middle of nowhere -- why not use Uber. They are going to send someone out after you either way.

     

    Maybe Medallions drop 20%, but the reality is that a line of cabs where you can just get into one is the most efficient way to go.
    16 Jun 2014, 06:22 PM Reply Like
  • Jon Moser
    , contributor
    Comments (2) | Send Message
     
    If Uber and similar enterprises have the safety and liability issues worked out, watch out!

     

    This new way of doing business appears to be less expensive and more convenient for many who need on demand door to door transportation, while providing a better income for the drivers.

     

    Really, why does one need bloated cab operators clogging up the middle? This is just another example of how the growth of the internet, along with increasingly available and sophisticated tech devices, will likely disrupt another industry.

     

    By the way, I currently own shares of TAXI with no plans to sell and don’t think their business will be damaged in the near term.

     

    But looking out a few years, all bets are off.
    16 Jun 2014, 06:49 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    More wild rides on Uber:

     

    "The fight is roiling communities across the United States, too. Regulators are often complicit in protecting a system that is congenial to taxi companies but inconvenient for customers; rules in cities such as Austin, Miami and Orlando don’t allow for Uber. Recently Virginia state officials sent cease-and-desist letters to Uber and Lyft, a similar service. Uber is fighting back, asking its users to complain to Gov. Terry McAuliffe (D) and other officials. The District has so far avoided an innovation-stifling regulatory crackdown, but the issue is still a live one in the city. "
    18 Jun 2014, 10:53 AM Reply Like
  • 12415751
    , contributor
    Comments (2) | Send Message
     
    When the Uber-x, Sidecar, and Lyft get the bills for commercial insurance, have to have late model cars, get vehicle inspections by deranged nazis, pay ground taxes and a plethora of fines, get chauffeuer licenses with drug drops and physicals all they will be is cheap limos. There profit margins will stink. They will be shaken out on slow days. Then when the taxi "syndicate" gloms their app technology and successfully applies it the bloom will come off the rose for the new arrivals.
    20 Jun 2014, 03:52 AM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    "When... "

     

    The only difference between a genius and a fool is timing.
    20 Jun 2014, 06:41 AM Reply Like
  • 12415751
    , contributor
    Comments (2) | Send Message
     
    Read (House Bills) HB4075 and HB5331 Illinois.
    20 Jun 2014, 01:59 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    A link would be helpful, a synopsis by a reputable source would be marvelous.
    20 Jun 2014, 03:16 PM Reply Like
  • Me 2333
    , contributor
    Comments (3) | Send Message
     
    For the GOOGLE- challenged, here is a link to HB4075 Illinois. :)
    12 Jul 2014, 09:54 AM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    Me 2333

     

    Two weeks later ... a great deal has transpired in the interim.

     

    The syntax and the emoticon convey much more than the link.
    12 Jul 2014, 12:08 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    The below from my hometown. I attended the meeting and it was a blast !!

     

    -----------------Uber battle goes to heart of Cambridge------------

     

    -----Tech boom pits innovators against locals concerned about quality of life----

     

    To the new set that dominates Kendall Square, Uber Technologies Inc. represents the ultimate marriage of technology and utility, a smartphone app for a private car service that is emblematic of the hacker spirit that pulses through the city’s many startups.

     

    But the other Cambridge, with legions of neighborhood activists and public officials who favor government oversight, worries that left unchecked Uber is a threat to public safety as well as to the livelihoods of hard-working cabbies.

     

    The latest chapter in this battle played out Tuesday night, when the Cambridge License Commission proposed subjecting Uber and other so-called ride-sharing services to same regulations as taxi cabs, and other restrictions that would be likely to limit its service and possibly drive up costs of a trip.

     

    The proposal enraged Uber’s fans, many of whom were dumbfounded that a city they identify as a cradle of innovation would dare to bring so bold an innovator as Uber to heel, and they naturally turned to Twitter to make their point.

     

    “A red light for Uber would make Cambridge the laughingstock of the tech world. Tech sustains our local jobs and future,” tweeted Russ Wilcox, a well-known local entrepreneur who co-founded E-Ink and now runs a startup in Kendall Square.

     

    But veterans of Cambridge politics said they were not surprised at how the Uber battle has exposed the rift between the tech types who have shaped Cambridge’s image to the outside world, and the locals who fear that runaway development, fueled by the tech boom, threatens to make their city unlivable and unaffordable.

     

    “They see each other as separate and competing entities, and they only rarely cooperate when they feel mutually threatened,” said Bob Simha, a former director of planning for the Massachusetts Institute of Technology who oversaw the school’s development plans in Kendall Square.

     

    And those differences are only growing more pronounced as the technology industry dominates Cambridge’s economy.

     

    “You have a whole new population that is quite comfortable with not only innovation, but a whole way of living that doesn’t have a whole lot of concern for the traditional view for how Cambridge should work,” said Simha.

     

    There have been other flashpoints between the two worlds within Cambridge. In 2012, residents mobilized when Google Inc. proposed an expansion of its Kendall Square campus that would cut into a rooftop garden used by the public. Many complained the tech giant was ruining a valuable community asset with little regard for the people of Cambridge.

     

    Those voices lost out and Google got its rooftop expansion. Similar battles have played out many times throughout the city’s history.

     

    When the Kendall Square area around MIT was being redeveloped in the 1970s, local activists and city officials argued it should become a place where “blue collar jobs” were plentiful. One resident at the time lambasted development officials for wanting to turn Kendall into a “prosperous metropolitan city for students, professionals and the jet set.”

     

    Those words now seem prophetic. Today Cambridge has some of the most expensive real estate prices in the Boston area and in many ways, Kendall Square is now a neighborhood of the elite and highly educated.

     

    Ironically, Cambridge is undertaking yet another major review of proposed expansion in Kendall Square, which could trigger more new development of the kind that residents fear would change their neighborhoods for the worse.

     

    “When I moved to Cambridge in 1993, Kendall Square was MIT and a bunch of parking lots,” said Jan Devereux, president of the Fresh Pond Residents Alliance. The group recently formed to confront the rapid development also taking place in that part of the city.

     

    Now, Devereux said Cambridge is “this gleaming new place where the buildings are all new. It makes us feel like we are more of an extension of Boston.”

     

    The challenge for Cambridge as it undergoes this building boom, she added, is how to maintain the quality of life that “drew people to the city over the years.”

     

    But some Uber supporters contend that city’s proposed regulations are not part of some larger debate over the quality of life in Cambridge, but rather more simply an effort to protect a single business interest: the taxi industry.

     

    “There clearly is a faction in the Cambridge city government who is opposed to Uber and trying to protect the entrenched taxi incumbents,” said Joel Fleming, who first came to Cambridge to attend Harvard University and decided to stay because of its progressive and liberal nature.

     

    Fleming was so incensed by the city’s proposal that he joined an angry crowd of Uber users and supporters who crowded into a small basement meeting room at a municipal building Tuesday night where the License Commission held its hearing.

     

    The Commission proposed that Uber and its drivers obtain licenses to operate in the city, which requires background checks and regular inspections. Private drivers such as black cars or limousines would have to charge a minimum of $50 — well above Uber’s $7 base fee. The regulations would also ban the practice used by Uber called “demand response booking,” where drivers pick up passengers without knowing their destination in advance.

     

    After a huge outcry, the licensing board backed away from its initial recommendations and said it will hold more meetings before deciding on new rules.

     

    The general manager of Uber’s local operations, Meghan Verena Joyce , told Cambridge authorities the company would cooperate in the review but is wary of being subjected to additional regulations.

     

    Uber has become a lightning rod in most communities where it has set up shop.

     

    Cabbies complain the company is operating a shadow taxi service without having to pay the same business costs they face. For example taxi medallions in Boston and Cambridge can run into the hundreds of thousands of dollars. Cabbies in London and Paris recently staged rallies to protest Uber.

     

    Meanwhile many municipal authorities say that without the same regulations and insurance requirements as the taxi industry, riders won’t have the same safety protections. Some states and municipalities have even warned customers to be careful about using Uber. Virginia recently ordered Uber to stop operating in the state because it wasn’t licensed to operate there.

     

    While Uber has grown rapidly over the past four years, its fate in Cambridge could be decided by an official who admitted he has never taken a ride in an Uber car.

     

    Fire Chief Gerald Reardon, who is also a member of the city License Commission, said he isn’t swayed by the argument that government regulations will blunt innovation.

     

    “We want to make sure that everyone is safe,” Reardon said. “Making people do the right thing is not always a popular position.”
    21 Jun 2014, 05:16 AM Reply Like
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