RE: JDM- A Power repost # 29049003
I have not taken the time to review the simplified prospectus of JDM funds or historic returns. My take is (and anyone can correct me if I'm wrong) the partnerships are formed through the sale of $10k units. THe partnership holds multiple investments (all flow through of course).
I'm not sure what the redemption restrictions are while it sits as a partnership. My assumption it is restricted and does not become liquid until converted to a fund.
Because they have a basket approach to holdings I would suspect they have a target return rate which could be in the range of 8 - 10%. I dont want to downplay the investment return but I think its fair to say investors receiving a 40% plus marginal tax benefit plus 10% return on the investment would be satisfied.
To summarize. I think JDM needs to show a return to assist in attracting and retaining investors but I think the primary benefit is tax related. Volume is needed to sell positions to meet liquidity needs. The warrants are an interesting scenario if held in the partnership. my guess is the partnership would be fully invested so they would need to sell shares to excercise the warrants if they are in the money. a two cent gain generates a double digit return for JDM at current levels
I think more concerning and contributor to stock price surpression is the pumpers and penny flippers. Long investors seem to be getting frustrated in my opinion and are moving on.
DWEK plus Day Traders = big uphill battle for share price appreciation in my opinion. MGT needs to diversify funding sources!