RE:RE:FTN - what's the back story hereThank guys, fantastic insights... i guess i must have ignored ftn because of US bank exposure years ago, did not remember it was US bank heavy. top 3 holdings are US end of may.
I have done very well with brompton. buying a lot at bottoms in 08/09 and 2020. I trimmed a lot early 22, and am planning to go the covered call + leverage route to dip back in and diversify away from split shares, but the 17% today is here despite the share price destruction.
I did some digging into the nov 2018 / 1 for 2.5 consildation. This is new to me, i'm discovering this other risk about split shares i hadn`t really realized...
the trigger of the RS was after a retraction offer (is that the only way to trigger?), where the number of pref shares and A shares repurchased aren't the same. Did they HAVE to do it? Were they trying to avoid trading under $5 and fear people would bail before they cut the distribution vs Bromptons A shares going onto the 3s and 2s in 2020, even lower in 09.
At that time (mid 2020-end 2020) i was buying bromptons hand over fist LCS, LBS SBC, and those navs went up 1-2X from there 8 months later. FTN holders did NOT participate in any way, although both large US and CAN banks went vertical... and pushed way beyond all time highs in october 21
From May 20 to JAN 22, just based on price, LBS was up 177%, SBC 131%, ZEB 73%, TD 72%, WFC 103%, JPM 53%, FTN a paltry 18% --- Can anyone explain this?? It doesn't make any sense... On a 5 yr basis FTN -65% vs ZEB up 12%, JPM up 24%.
It`s a great mystery why this constant capital erosion here, and why anyone would want to hold it?
I just can't understand the appeal here. on a 10 year chart, SBC hit an ATH Jan 22 and + 74% vs JUN 2013, while FTN was -41% over the same period, and -57% as of today. On the distribution side, there is 28% more paid out by ftn today 10c vs 12.8c/month, but that`s post split. Pre-split the 12.8 cents is only equal to 5.12 cents/month for pre split A shares.
not sure what i'm missing...looks like a bad story from every angle??? the underlying port does not explain the massive price decline
thanks
from nov 2020
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The reorganization is required in order to maintain an equal number of Class A shares and Preferred Shares outstanding at all material times. More Preferred shares were tendered for retraction than Class A shares pursuant to the special retraction right offered to shareholders in connection with the extension of the termination date of the Company.
also
The closing trading price of the pre-consolidation Class A shares on December 16, 2020 of $4.14 translates to a price of $10.35 post-consolidation. There is no change to the aggregate intrinsic value of Class A shareholders’ holdings as a result of the consolidation.