How did the Exchanges do in the Financial Crisis of 2008?

The companies that operate exchanges for securities, commodities and other financial instruments robust institutions. These companies are extremely profitable, with operating margins usually in the high teens. Extreme market turbulence has been caused by the coronavirus. As a result, stock markets globally have taken big hits since the beginning of the year. That the damage … Continue reading How did the Exchanges do in the Financial Crisis of 2008?

Embedded Optionality | FRMO Case Study

When people talk about the Quality of Earnings, what they usually mean is how well do current earnings predict future earnings. This is, literally, the textbook definition of earnings quality. The problem with this definition, however, is that it favours the stability of earnings above anything else.  What if, as an example, a future stream … Continue reading Embedded Optionality | FRMO Case Study

Overstock | A Special Situation

Overstock (OSTK) currently presents a Special Situation Investment Opportunity. As Overstock's founder has turned his focus on blockchain investments, the sale of the company's eCommerce operations is imminent. A review of recent M&A multiples in the eCommerce space suggests that at its current price, shares of Overstock are significantly undervalued. Overstock Decides to Sell Itself In 2014, … Continue reading Overstock | A Special Situation