DeepResearch707 Outed Jayme Stanley As MFIN Tout. Congratulations!

Jayme Stanley posted extensively on threads following articles about Medallion Financial (NASDAQ:MFIN), the leading provider of taxi medallion loans.

She used the screen name “stanleyjayme” to post comments on Seeking Alpha and “jayme” on the Yahoo Finance Conversations message board for MFIN.

As of November 17, 2016 she had posted 52 comments on Seeking Alpha and 44 comments on Yahoo Finance.

Jayme Stanley was outed on November 16, 2016 as working for Sarah Frigo, Head of Investor Relations for Medallion Financial Corporation (NASDAQ;MFIN). The discovery was made by “DeepResearch707” in the post below on Seeking Alpha:

DeepResearch707, Contributor
Seeking Alpha 16 Nov 2016, 04:35 PM
Connecting the dots:
Jayme Stanley –> girlfriend of Craig Frigo
Craig Frigo –> brother of Sarah Rabby Frigo
Sarah Rabby Frigo –> Investor Relations for Medallion Financial
Is it is safe to assume StanleyJayme’s comments are being written by Andrew Murstein?
Is it acceptable (and/or legal) for management of a public company to be ANONYMOUSLY pumping their own stock?

See: http://seekingalpha.com/article/4023562-medallion-financial-chicago-loans-default-cross-default-liquidity-crunch-imminent-bankruptcy#comment-73632260

More information and comments by DeepResearch707 on Seeking Alpha here:
http://seekingalpha.com/author/deepresearch707/comments

Using the tip from DeepResearch707, I posted more information in my Sharing Opinions blog on November 18, 2016 See:

Jayme Stanley Outed As MFIN Tout

https://bostonlyftdiaries.wordpress.com/2016/11/18/jayme-stanley-outed-as-mfin-tout/

Jayme Stanley’s last post before being outed as working for MFIN’s investor relations follows.

“The most recent SeekingAlpha article, referred to below, like all of the other ones published under the anonymous writer, ValueSquared, has been written with the unjustified intention to short sell MFIN and to severely manipulate the stock price downward with the support of short sellers whose [short position] has dramatically increased over the past several months. MFIN refrains from commenting on these matters and the anonymous authors’ influence on stock price because all of their company information is publicly disclosed as it stands and one would think that if there was something dire going on that the company would issue a press release addressing it. It’s understandable that the company is not involved in the business of responding to anonymous blogger claims regarding and supporting short attacks…likely because it has not ever found it essential to do so. In pre-UBER times MFIN was likely never vulnerable to an attack such as this.

I digress. The medallion market IS weaker than ever. And the point of Chicago medallion loans being currently in default may be true, but the matter of them going into cross-default—and so on and so forth—is unlikely. The owner of the loans made the mistake of not getting the company to guarantee management. Medallion originally started their business by dealing taxi medallions back in 1937…!! There is no other company that has that much experience in the space, seriously. FURTHERMORE, if one were to take a look at the history of MFIN they would find that the company was clearly ahead of the medallion bubble considering that their medallion portfolio began to shrink and the company began diversifying just when other lenders were coming into the market.

Similar to what happened in the real estate crisis not every bank went out of business and it’s the same with Medallion and other banks this time around but with taxi medallions. Banks like Capital One and Signature –who had been in business for years, started limiting their LTVs.

MFIN’s losses are less than 1% and the loan loss reserve is actually 6%.

There have been 75 basis points overall blended to date.

There is no point in comparing Medallion to Melrose Credit Union because Melrose got involved in medallion lending at the most inopportune time, with little to no experience in the space, whereas, like I stated above, MFIN has in the medallion business for almost 80 years. Most of their executives that handle the accounts are senior and a few have been with the company since the beginning! The company’s key problem could be that it sort of still runs itself as a family company and not a public one.

[Later that day, jayme posted a correction: “Melrose Credit Union has been in the taxi medallion lending space since the 1950’s. The newbies are Cap One and Signature, who were largely responsible for selling bad products like interest only loans to this market. MFIN and melrose resisted making those types of loans and lost significant business as a result. But, those decisions look pretty prescient now.”]

ValueSquared, Gordon, LSP, Tavit8, etc., I ask you: what is your past experience in the space? Who are you to say that these loans won’t be extended and not cross-defaulted on after all? Why all of a sudden should Medallion have a bad relationship with the bank they used to fund the Medallion loans? On the flipside, what if the bank offered to pay off the lender, less money to pay the loans down, and the other bank saying screw the lender and offering MB a waiver of default? This article is loaded with projections and heavy with false information which is backed here and there by actual statements from the latest earnings report.

A lot of what is claimed in ValueSquared’s article stems from the instance of MFIN not de-regulating, however, the company fully discloses its ongoing consideration of that decision. De-regulating should be considered beneficial to shareholders if only for the fact that it will be a big boost to shareholders’ 2017 cash flow. Additionally, the company will be likely be able to lower taxes since it will be filing a consolidated tax return post-de-regulation. To me it looks like they’re doing exactly what they’re saying they’re doing and heading straight for de-regulation. It’s the only logical decision especially when you consider that they recently sold their ABL division.

–and regarding debt markets being “closed”; Medallion Bank received an A+ rating by a highly accredited rating agency earlier this year (with the parent company receiving an ‘A’ rating). Wouldn’t these recent ratings and since-continued profit margins, all of which were publicly disclosed, make it easy for the company to have access to debt markets?

Also it should be noted that other companies with even LOWER profit margins and earnings are still currently issuing debt. Medallion Bank has to be under regulation by the FDIC, the SEC, and Utah Dept. of Financial Institutions, under which the bank sailed right on through investigation, approved—again–and came out with the best rating possible.

To put things even more so in perspective, most banks have a capital ratio of 6%, an inverse ratio of 17:1. Medallion Bank has a capital ratio of 15% and the leveraged inverse of that is 6.7:1. This ratio is less than half of what most banks hold. For example, look at Signature Bank; because they have a medallion portfolio they took a huge hit last quarter but they rolled down their medallions and their stock went up 20%. That’s 15x’s or more at multiple of book. I don’t forsee MFIN having any problems with raising debt capital nor do I see the debt market as necessarily being closed. That being said, the company issued a bond offering this year and could always do so again in the future. Why not factor that in as well as everything else?

AND FINALLY–MFIN’s disclosure of regulators reviewing them in this 10-Q and the company not disclosing this information in prior SEC filings from past quarters likely has to do with the failure of Montauk Credit Union last year. In the wake of this and in the wake of UBER’s takeover and its effect on the value of the taxi medallion, regulators have no doubt heightened their examination and scrutiny of any medallion lender if only to feel comfortable about the lenders’ portfolios. Because of recent current events it would be viewed as a new disclosure, obviously, for Medallion as well. The regulators are looking at MFIN in the same way they’re looking at all other banks, under a matter of good corporate governance, factoring in a risk factor to prove to people that their focus is on medallion loans at the moment.

In conclusion, I believe MFIN is as profitable and as safe of an investment as it has ever been.”

 

 

 

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