Betting On Uber’s Success By Shorting Medallion Financial (NASDAQ:TAXI)

I’ve been very busy for a while now with a very exciting project.

I’m a co-author with Jay Hickman of a recent analysis that explores the rapid transformation of the For Hire Vehicle market from medallion taxis to ride sharing.

We’re betting on the success of Uber by shorting the stock of publicly traded Medallion Financial (NASDAQ:TAXI). We’re described in an article published on 1/5/14 titled:

Hedge fund bets on Uber, Lyft: Speculators take aim at medallion loans

Our analysis was profiled in depth in a Washington Post article titled:

Investors who can’t bet on Uber are betting instead on the death of taxi medallions
One hedge fund is warning of ‘financial ruin.’

By Emily Badger
Washington Post
December 19, 2014

The 23-page market report warns of “financial ruin” for Medallion Financial Corp., a 70-year-old company that has long lent money to drivers and investors in New York, Chicago and Boston looking to buy expensive taxi medallions. The coveted assets give owners the right to operate taxicabs, and for decades they have been the best investment in America, providing a steady business for a company that goes by the ticker symbol TAXI.

But the market report, released to the media on Thursday at a time when transportation companies Uber and Lyft are threatening established taxi markets across the globe, predicts a much darker future. “Medallion Financial,” it reads, “has left itself and its shareholders exposed to an economic reckoning rarely observed in free-market economies – the collapse of an asset class propped up by decades of government-sponsored, monopolistic entry barriers with the sudden, unconstrained introduction of new supply.”

The remainder of the article can be read here.

The complete 23-page report has been published in Seeking Alpha:

The Downside For Medallion Financial Only Just Beginning

For those of you who love robust discussions, the comments will offer you an endless supply!!

 

 

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