BSexposer

First Marblehead: Miracles Do Happen

Don't be fooled by the length of this article. It's full of laughable assumptions and ridiculous conclusions.

"By my calculations, First Marblehead could drop down all of its short-term investments, worth about $100M and spend $100 million going out and acquiring a handful of smaller deposit based lending institutions out of New England. These transactions would boost the banks capital base to over $300M and give it the ability to support $3B in deposits and several billion dollars in student loans."

Huh? Where did these "calculations" come from. Since when can you acquire a "handful" of banks for $100MM? This doesn't even pass the laugh test.

"While there are regulatory risks to such an action, I strongly believe that the company could appease regulators by keeping a third of their loan portfolio in highly rated commercial loans."

It's great you "strongly believe" this - too bad the entire scenario is laughable to begin with. Let's move on.

"If the company were to undertake such a plan it is my opinion that the company would be worth somewhere north of $1 billion dollars after accounting for the bank at 2 times book value, First Marblehead’s remaining cash and cash equivalents and what is left of the company’s residuals."

Whoa, Nelly - 2 times book value? Please, get serious. Ain't going to happen.

"In addition, a fully leveraged bank of the size outlined above could potentially have annual earnings of 30-60M dollars. When this is coupled with the profits that First Marblehead could potentially generate from a return of the securitization business it is clear that the company is significantly undervalued."

Yeah, right, I believe that when I see it. BTW, securitization won't return (to clue you in). And finally for the coup de grace:

"If management were to build towards a depositary model, while still keeping its securitization capabilities I would not be surprised at all to see the company post earnings within five years that would approach 450-500M dollars on an annual basis. Such a figure, with dilution included, would support a stock price in excess of $75 dollars a share."

450-500 million dollars annually in earnings?????? WHAT???? Is the author on crack? Clearly, he must be JOKING, right? Give me a break.

Need for Student Loans Should Boost First Marblehead Stock

Even by the poor standards of SA, this "article" sucks. Note to readers - when the author doesn't even know the difference between "eminent" and "imminent" and can't spell the word "condescending" correctly, should you really be taking the person's investment advice? I don't think so. This "article" is typical of the trash that is posted on this website - uninformed, complete lack of fundamental analysis, bogus in the extreme (if you took the advice and bought, you'd now be down almost 50%), and the "author" even has the nerve to post snide replies to criticisms posted in response to the "article". Unbelievable.