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JEF - Jefferies Group


Liberty

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  • 3 weeks later...

Well, they do say that excluding a bad year data point does wonders for your track record  :)

 

However, I got the impression from the letter they are loading the gun, lots of cash to deploy and a few concentrated assets held long term. I'm just wondering if it's worth holding a full position for the new future investments over the next five years. The last five years have seen the sp500 trounce leucadia. Is the next five years likely to do the opposite or should one be more pro active? Views?

 

 

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Read the letter...glad to see they are keeping up the tradition, but wish there was more market and general commentary...also, they mentioned MLI was "sold where future value creation did not meet our return expectations"...I think it was sold as a block trade at $42 when the stock was trading at $48 and now its at $62...could be wrong, but seems like there was a chunk of value left on the table

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  • 3 weeks later...
Richard Handler’s Leucadia National Corp. (LUK) added $253 million to its investment in Philip Falcone’s Harbinger Group Inc., more than doubling a bet on the owner of businesses from consumer goods to insurance.

 

Leucadia agreed to buy 23 million preferred securities in Harbinger Group from Falcone’s hedge funds for $11 apiece, Harbinger Group said today in a statement. That adds to common stock Leucadia acquired last year, now valued at $244 million.

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"Upon acquisition of the Preferred Interest, together with the 18.6 million shares of HGI common stock acquired in September 2013 and previous purchases, we will beneficially own (including as a result of our right to sell the HGI Shares into which the Preferred Interest is exchangeable) 41.6 million common shares of HGI representing approximately 28.6% of HGI’s currently outstanding common stock and 20.1% of HGI’s common stock assuming the conversion of all of HGI’s outstanding Series A and Series A-2 Participating Preferred Stock. Upon the exchange of the Preferred Interest into the HGI Shares, our total net purchase price of the HGI Shares and the 18.6 million shares of HGI common stock purchased in September 2013 will be $406.5 million, or $9.77 per share."

 

 

 

from sec filing regarding the transaction:

http://www.sec.gov/Archives/edgar/data/96223/000090951814000126/mm03-1714_8k.htm

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"Leucadia Invests in Harley-Davidson Leasing Company"

http://www.digitaljournal.com/pr/1810621

 

Chrome Capital, the nation's leading lessor of pre-owned Harley-Davidson motorcycles, has completed a $20 million equity investment from Leucadia National Corporation, a publicly listed diversified holding company (NYSE: LUK). The investment, which was completed on March 10, 2014, may be increased to $86M to fund Chrome Capital's growth plans.
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Handler, Leucadia’s Chief, Takes Pay Cut in New Role

 

 

http://dealbook.nytimes.com/2014/04/02/handler-leucadias-new-chief-takes-pay-cut-in-new-role/?module=BlogPost-Title&version=Blog Main&contentCollection=Investment Banking&action=Click&pgtype=Blogs&region=Body

 

 

 

Mr. Handler, who became chief executive of Leucadia after the merger last year, earned $3.1 million in 2013, according to a regulatory filing on Wednesday. The previous year, his compensation totaled $19 million, higher than that of Jamie Dimon, the chief executive of JPMorgan Chase.

 

A primary driver of the lower pay was the disappointing performance of the Jefferies subsidiary, where Mr. Handler is still chief executive.

 

The performance of Jefferies fell short of a predetermined target but above a minimum threshold, producing a bonus for Mr. Handler of $1.8 million, the filing showed. If Jefferies had done better, Mr. Handler might have received up to $12 million.

 

As in past years, Mr. Handler took a base salary of $1 million for 2013. The rest of his compensation included items like a driver and the personal use of company aircraft.

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Leucadia National Corporation CFO to Retire for Health Reasons

 

 

http://www.reuters.com/article/2014/04/09/ny-leucadia-national-idUSnBw096273a+100+BSW20140409

 

 

 

Leucadia National Corporation (NYSE:LUK) today announced that Joseph A. Orlando, its Chief Financial Officer, intends to retire by August 31, 2014, due to orthopedic health issues that require his attention. A search is underway to recruit Mr. Orlando’s successor.
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Leucadia National Corporation CFO to Retire for Health Reasons

 

 

http://www.reuters.com/article/2014/04/09/ny-leucadia-national-idUSnBw096273a+100+BSW20140409

 

 

 

Leucadia National Corporation (NYSE:LUK) today announced that Joseph A. Orlando, its Chief Financial Officer, intends to retire by August 31, 2014, due to orthopedic health issues that require his attention. A search is underway to recruit Mr. Orlando’s successor.

 

Sad to see another member of the old guard depart.

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I think the options you are looking at are old Jefferies options that are now based on .81 of a LUK share [81 shares per contract], that's why the pricing looks odd.  LUK2 vs LUK.

 

http://www.cboe.com/publish/TTStockSM/13-086.pdf

 

http://www.ise.com/assets/documents/optionsExchange/productNotices/equity_corp_actions/2013/2013-026$Jefferies_Group_Inc_(JEF)_-_Merger_With_Leucadia_National_Corporation_(LUK)$20130228.pdf

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I can't say I'm impressed with the letter, on the contrary.

 

I miss quantification of results, evaluation criteria and evaluation itself.

 

I could not agree more. 

 

The fact that Premier Entertainment was sold for $250 million is meaningless without a recap of the cash flow that when into it. Just one example of many of what is missing from the letter.

 

Hopefully, Mr. Handler will gravitate toward the style of letters written by Mr. Cummings and Mr. Steinberg in years past before writing the 2014 letter.

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