1. The company carries on the balance sheet $33mn in contract liabilities. You may want to add this to EV.
2. I do not believe there is an off-balance sheet liability.
For one in sec filings management never discusses any obligations or liabilities in regards to their profit sharing agreement.
On the latest earning call CFO said, "As a reminder, profit share revenues comprises the expected earned premiums less the expected claims to be paid over the life of the contracts unless the expense is attributable to the program. The net profit share to us is 72%, and any losses in the net profit share are accrued and carried forward for future profit share calculations."
This means that profit share is accounted for by vintage, AND that losses can not exceed the cost of profit share for the vintage going to 0. That would be the maximum possible loss booked. I see no off balance sheet liability there.
The latest earnings call is very helpful, I recommend anyone interested read it.
Great work, man! Thoughts on management owning practically 0 stock?
Two updates:
1. The company carries on the balance sheet $33mn in contract liabilities. You may want to add this to EV.
2. I do not believe there is an off-balance sheet liability.
For one in sec filings management never discusses any obligations or liabilities in regards to their profit sharing agreement.
On the latest earning call CFO said, "As a reminder, profit share revenues comprises the expected earned premiums less the expected claims to be paid over the life of the contracts unless the expense is attributable to the program. The net profit share to us is 72%, and any losses in the net profit share are accrued and carried forward for future profit share calculations."
This means that profit share is accounted for by vintage, AND that losses can not exceed the cost of profit share for the vintage going to 0. That would be the maximum possible loss booked. I see no off balance sheet liability there.
The latest earnings call is very helpful, I recommend anyone interested read it.
Well former founder/ceo retired in Jan. He has a lot of stock. 3M shares.
CFO is interim so who knows what he is thinking.
And as I wrote, new CEO has stock option plan worth 4M shares.
Im not super concerned about it. That all seems reasonable.
Bought at a cost basis of 1.50, sold at cost basis of 2.04. 36% return.
You can also read this one on seeking alpha: https://seekingalpha.com/article/4780299-open-lending-recently-oversold-on-big-earnings-miss-now-priced-as-an-asymmetric-bet
I have closed out of this position. Net a 66% return.
i didnt comment correctly. See my reply to Andrews comments for some more important information on this stock