ONDK - On Deck Capital

[Guest Schwab711]

The more I think about it, the more I think these guys are a big ZERO.

 

They have $137 M in cash. Funding Debt is non-recourse, as far as I can tell. So even if 100% of current loans go bad, they would have $100 M in cash.

 

I am going to suggest that if you think that is REALLY the case...you should buy every share you can!

 

Perhaps management might spend some of that $100M on marketing, rent, payroll, and maybe, just maybe bonuses?

 

Also, if 100% of the loans go bad, what kind of reputation will this company have?  Regulators won't be looking into it?

 

If these loans are at something like 40% interest, and 20% of them eventually go bad...this company should be EASILY self fundable...

 

What about prepayments

[txfan2424]

I am going to suggest that if you think that is REALLY the case...you should buy every share you can!

 

Current market cap is $344 M so that would still be a 70% loss from here.

 

My point was that, if you haven't even bothered to look at the balance sheet, it is hard to take your opinions seriously.

 

The covenants on those loans require that ONDK still spend to service these loans. Like I said, that is expensive (like 30% of loan balances each year). It's not like they can just stop servicing the loans if some of them stop paying them back. I think they have to keep trying like 6-12 months before they can count the loan as a loss (and no longer have to service the loan).