ShahKhezri Posted June 26, 2013 Share Posted June 26, 2013 FWIW, I've met a number of analysts/brokers who used to work at Jeffries but are now are larger shops... All of them said something along the lines of 'Chandler is outstanding/incredible'. The conflict is concerning, however, I do trust they have thought this through. I remember Bruce Berkowitz said before that JEF's leaders are the best Investment Bankers, but I couldn't find the source anymore. Do you see any chance JEF would grow to be the same size as GS, or at least MS? IMO, there's no such thing as best ibankers. I'm positive that every decent sized ibank pitches the very same debt/equity/spinoff/etc idea. It's just a matter of whether you're MD went to school with so and so company's CEO or decision maker or your existing relationship and how entrenched it is with the Company. Ibanking is glorified arts & crafts. That's why league tables rarely change, rarely does a "star" or "genius" ibanker go to a no name place and get to the top of the tables. Syndicate/Ibanking positions are high turnover positions because the work/life balance is nonexistent your first 10-15 years. Those that stay either a) absolutely love it, b) think they are impacting the world in a positive way (and there are a lot who think that), c) live a lifestyle that demands the $. With that said, balance sheet is key and there is a first mover advantage in coverage of an industry/sector that is either shunned or deemed risky. Financials are one of the most commoditized businesses out there. The key is, will JEF be able to successfully avoid going crazy at the top to keep from selling the family jewels at the bottom. If Handler is able to do that, everything else is blind faith; the balance sheets are subject to a lot of assumptions. If you don’t think Handler is Fuld or Prince, this investment will work out fine. No position in LUK. Link to comment Share on other sites More sharing options...
muscleman Posted June 27, 2013 Share Posted June 27, 2013 There is no doubt LUK is in the "recharging the elephant gun phase". It's ROE is pitiful at the moment. It is trading slightly below tangible book. It has sold and liquidated many of its public investments and owns a few large private businesses. Therefore, the thing to watch is what they are going to do with their resources in the next little while both at investing HQ and at Jefferies HQ. With 10 billion in equity, to achieve a 20% ROE which is what would lead to a 20% growth in book value, they must produce $2 billion per year of gains and/or income. They are nowhere close to that...I would say that the current "complex" can produce - in a stretch , no better than 1 billion per year, so the other billion must come from new investments. Is it trading already below tangible book? From the latest 10-Q, the tangible book is about $7.6 bn. The current market cap is 9.11 bn. Regarding Rich Handler, I remember Bruce mentioned somewhere before that he thinks Rich is the best investment banker on Wall Street, but I can't find the source anymore. Anyone? Note that top IBs like GS is currently trading at about 10% above tangible book, while LUK is currently at 19% above book. I thinkI heard him say that recently on a panel at a conference, maybe Ira Sohn I can't find any source. Link? This is what I found from the SEC filings: http://www.sec.gov/Archives/edgar/data/96223/000093041313000410/c71828_424b3.htm Page 72, Sum-of-the-Parts Analysis. In performing the sum-of-the-parts analysis Citi also performed a sensitivity analysis of the valuation of certain of Leucadia’s assets, based on discussions with Leucadia management and as described above, that applied low and high range valuations to the applicable book values or net present values of such assets provided or reported by Leucadia. Based on this analysis and the assumptions and methodologies described above, Citi derived an implied range of equity values of Leucadia common shares of $20.68-$26.84 per share, as compared to the Leucadia Adjusted Pre-Announcement Share Price of $20.99. Page 75, Pro forma analysis This analysis indicated that the pro forma book value and tangible book value of Leucadia at June 30, 2012 would be $24.51 and $20.07 per share, respectively (compared to the Leucadia book value and tangible book value (adjusted to account for the estimated impact of the redemption of certain securities and divestiture of certain assets held by Leucadia during the second half of 2012) as of June 30, 2012 provided to Citi of $26.31 and $22.82 per share, respectively), which, following application of the exchange ratio of 0.81x. What do you think? :) Link to comment Share on other sites More sharing options...
WhoIsWarren Posted June 27, 2013 Share Posted June 27, 2013 And now for something completely different...... From the 2006 Leucadia shareholder letter: "We have a two-pronged approach to our succession problem -- merge or acquire a large company not dependent on our investment skills and/or/also find and nurture talented investment types who have good deal skills -- whether inside or outside the Company." I'm just reflecting on the tie-up with Jefferies: did they end up in the first camp or the second (or maybe a combination of both)? My initial thinking was that, yeah Handler was instrumental in the Fortescue, he's an investment banker / deal maker, so clearly they've gone for the second camp. But reading the 2012 letter, digesting Leucadia's pretty wild history, the wide and varied deals they got involved in, it's obvious that C&S were truly amazing investors. Is it clear that 'new' Leucadia has good deal skills? Did Handler cherry pick the Fortescue investment opportunity for C&S, or perhaps he was firing them over deals willy nilly, hoping that something would pique their interest. [After all, Jefferies gets paid on volume, not quality.] So in that context, perhaps C&S settled on the first camp? That's to say, they've merged with a large company (and probably a good one at that) not dependent on their investment skills, and the 'old' Leucadia will over time become the stub, as they harvest current investments and do not have the necessary skill set to find replacements? Oh, perhaps it doesn't matter. Just some rambling thoughts really......don't mind me..... :-X Link to comment Share on other sites More sharing options...
scorpioncapital Posted June 27, 2013 Share Posted June 27, 2013 I think as long as Steinberg is still Chairman there is a good prospect of cultivating existing investments and making new "good" ones. When it's his turn to retire, we will have more information on what the "young guys" have been doing. I'm going to give it a five year horizon to see what happens. It's too soon to tell anything. However, I am cautioned and made optimistic by two other companies and their evolution. Brookfield - the young Mr. Flatt has really done very well when he took over from the older generation who ran the conglomerate. It feels like Handler is like a peer of Flatt, although Handler is about 10 years older. Loews - this is the cautionary tale. When the parents gave control to the 4 sons, the sons didn't do anything special and the stock has , in my opinion, gone nowhere and done very poorly. More in management mode than entrepreneurial mode. I can't help feeling that C&S see something of their relationship in Handler and Friedman. I hope they are right. Link to comment Share on other sites More sharing options...
Pensionguy Posted June 28, 2013 Share Posted June 28, 2013 Annual Report out. Nice summary history, and then end of an era to be sure. However, the letter surely left me craving any information about how the underlying business units are doing. I assume the analyst days will enlighten us as to how the new mgmt team want to communicate with shareholders going forward. Link to comment Share on other sites More sharing options...
giofranchi Posted July 20, 2013 Share Posted July 20, 2013 A recent article. giofranchileucadia-poised-to-continue-strong-long-term-returns.pdf Link to comment Share on other sites More sharing options...
Saidal Posted July 25, 2013 Share Posted July 25, 2013 Did anyone attend the Leucadia AGM today? Below is the link to the presentation. http://www.sec.gov/Archives/edgar/data/96223/000119312513301497/d573558dex991.htm Link to comment Share on other sites More sharing options...
jay21 Posted July 25, 2013 Share Posted July 25, 2013 Did anyone attend the Leucadia AGM today? Below is the link to the presentation. http://www.sec.gov/Archives/edgar/data/96223/000119312513301497/d573558dex991.htm Interesting. Thanks for posting. The business that I learned more about was Garcadia. I thought it was just going to be a buyer of distressed dealerships that popped up in the recession, but it seems like they might be more ambitious then that. Link to comment Share on other sites More sharing options...
scorpioncapital Posted July 26, 2013 Share Posted July 26, 2013 If Leucadia goes where nobody else likes to go, then a used car salesman makes perfect sense :) Link to comment Share on other sites More sharing options...
Grenville Posted July 26, 2013 Share Posted July 26, 2013 Here are some thorough notes from the AGM: http://brooklyninvestor.blogspot.com/2013/07/leucadia-national-annual-meeting-2013.html Link to comment Share on other sites More sharing options...
Guest ajc Posted July 26, 2013 Share Posted July 26, 2013 Here are some thorough notes from the AGM: http://brooklyninvestor.blogspot.com/2013/07/leucadia-national-annual-meeting-2013.html Thanks. Link to comment Share on other sites More sharing options...
fareastwarriors Posted August 1, 2013 Share Posted August 1, 2013 http://www.latimes.com/business/money/la-fi-mo-ground-beef-sold-recall-20130731,0,6268520.story 50,000 pounds of ground beef is recalled, may be tainted by E. coli Link to comment Share on other sites More sharing options...
Parsad Posted August 1, 2013 Share Posted August 1, 2013 http://www.latimes.com/business/money/la-fi-mo-ground-beef-sold-recall-20130731,0,6268520.story 50,000 pounds of ground beef is recalled, may be tainted by E. coli That's nothing...probably a week's worth of deliveries to Walmart. If it was 50,000 tonnes, then I would have been worried! ;D Cheers! Link to comment Share on other sites More sharing options...
Grenville Posted August 6, 2013 Share Posted August 6, 2013 LUK Q2 results and 10Q out: http://www.leucadia.com/10q_docs/luk_2013q2.pdf Link to comment Share on other sites More sharing options...
no_free_lunch Posted August 23, 2013 Share Posted August 23, 2013 Anyone have a sense for how Leucadia's options work? I am seeing some strange pricing which must mean that the options aren't trading 100% against the stock. E.g. Jan 2015 $20 calls have bid/ask spread of $2.7/3.00 on a stock that is over $25. How can this be? Link to comment Share on other sites More sharing options...
gfp Posted August 23, 2013 Share Posted August 23, 2013 I believe it got adjusted for the Crimson wine spin-off. So some LUK options are for 95% (95) shares of LUK after the split if I am understanding it correctly. The math seems to support the 95 number as well. Link to comment Share on other sites More sharing options...
no_free_lunch Posted August 23, 2013 Share Posted August 23, 2013 Global, I am trying to figure out how it works still. My brokerage says it is for 81 shares, so okay. So does that mean when I pay say $1.25 for the $25 call, that it will be $1.25*100 = $1250 for 81 shares? Link to comment Share on other sites More sharing options...
gfp Posted August 23, 2013 Share Posted August 23, 2013 That sounds correct - sorry for posting an incorrect number above. If your broker says it's 81 shares per contract, use that number. Link to comment Share on other sites More sharing options...
Grenville Posted August 23, 2013 Share Posted August 23, 2013 LUK just released an amendment to their retention agreement with Tom Mara, Justin Wheeler and Joe Orlando. The timing is a bit funny so I hope none of them are thinking about leaving. from the filing: http://www.sec.gov/Archives/edgar/data/96223/000090951813000203/mm08-2313_8k.htm As a result of the transaction with Jefferies Group LLC and Richard B. Handler becoming Chief Executive Officer of the Company, each executive had the right under the agreements to receive the Payment were he to terminate his employment within six months of March 1, 2013. That would put the last date for payment at September 1, 2013. Why one would amend it on Aug 21 is a bit curious, but I'm sure I'm missing something and hoping its nothing. Link to comment Share on other sites More sharing options...
Parsad Posted August 23, 2013 Share Posted August 23, 2013 LUK just released an amendment to their retention agreement with Tom Mara, Justin Wheeler and Joe Orlando. The timing is a bit funny so I hope none of them are thinking about leaving. from the filing: http://www.sec.gov/Archives/edgar/data/96223/000090951813000203/mm08-2313_8k.htm As a result of the transaction with Jefferies Group LLC and Richard B. Handler becoming Chief Executive Officer of the Company, each executive had the right under the agreements to receive the Payment were he to terminate his employment within six months of March 1, 2013. That would put the last date for payment at September 1, 2013. Why one would amend it on Aug 21 is a bit curious, but I'm sure I'm missing something and hoping its nothing. That is very weird and unusual! It's almost like a repricing of options, just on the compensation agreement. If any leave before September 1st, I would not be surprised to see some outcry from shareholders. Cheers! Link to comment Share on other sites More sharing options...
twacowfca Posted August 23, 2013 Share Posted August 23, 2013 LUK just released an amendment to their retention agreement with Tom Mara, Justin Wheeler and Joe Orlando. The timing is a bit funny so I hope none of them are thinking about leaving. from the filing: http://www.sec.gov/Archives/edgar/data/96223/000090951813000203/mm08-2313_8k.htm As a result of the transaction with Jefferies Group LLC and Richard B. Handler becoming Chief Executive Officer of the Company, each executive had the right under the agreements to receive the Payment were he to terminate his employment within six months of March 1, 2013. That would put the last date for payment at September 1, 2013. Why one would amend it on Aug 21 is a bit curious, but I'm sure I'm missing something and hoping its nothing. That is very weird and unusual! It's almost like a repricing of options, just on the compensation agreement. If any leave before September 1st, I would not be surprised to see some outcry from shareholders. Cheers! It may simply be that they are merely eliminating a perverse incentive for them to leave. Link to comment Share on other sites More sharing options...
Parsad Posted August 23, 2013 Share Posted August 23, 2013 Sorry, I think Twa is correct...it says "had" the right, not "has" the right. They are removing the clause. Thanks Twa...that's what you get paid the big bucks for! Cheers! Link to comment Share on other sites More sharing options...
twacowfca Posted August 23, 2013 Share Posted August 23, 2013 Sorry, I think Twa is correct...it says "had" the right, not "has" the right. They are removing the clause. Thanks Twa...that's what you get paid the big bucks for! Cheers! Thanks for the compliment, Sanjeev. Please send your extra supermarket coupons to Tim. He'll forward them to my sweetheart to add to our growing treasure chest. She's the reason for our success. :) Link to comment Share on other sites More sharing options...
Grenville Posted September 4, 2013 Share Posted September 4, 2013 New signage around 520 Madison, JEF HQ. If someone could confirm or share some pictures for us non NYers that would be great. "The Jefferies name is now all over 520 Madison Avenue" http://hereisthecity.com/2013/09/03/why-and-not-why-the-jefferies-name-is-now-all-over-520-madison-a/ Here's an email sent over the long holiday weekend to all Jefferies employees / partners by CEO Richard Handler and President Freidman: 'For those of us coming to work this week in our New York Global Headquarters, you will notice something new on OUR building. Here are some thoughts from the two of us. ..... Link to comment Share on other sites More sharing options...
dcollon Posted September 17, 2013 Share Posted September 17, 2013 Jefferies Profit Tumbles 83% on Plunge in Bond Trading http://www.bloomberg.com/news/2013-09-17/jefferies-profit-tumbles-83-as-bond-trading-revenue-plunges.html Link to comment Share on other sites More sharing options...
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