ALLY FINANCIAL aka GMAC aka DITECH aka TURD SANDWICH GOES PUBLIC

17 comments

Posted on 10th April 2014 by Administrator in Economy |Politics |Social Issues

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You know we are near or at a market top when shit stains like Ally Financial are brought public by fellow shit stains – Citi, Goldman, and Morgan Stanley. You’d have to be brain dead or an Ivy League trained economist to buy this turd sandwich at $25 per share. You’d have to be retarded shit eating muppet to buy this worthless government manipulated joke of a company. This is the company that has been doling out billions in subprime auto loans to the Free Shit Army for the last three years in order to prop up General Motors auto sales. They have been doing this because Obama and his minions instructed them to do so. Now that they are loaded with hundreds of billions in loans that will never be repaid, Obama is dumping this piece of shit on the public market where the Wall Street shysters will try to convince you to buy it. Jim Cramer thinks it’s the bomb.

I decided to go to their last SEC filing to get the real scoop about this joke. Here is the link:

http://www.ally.com/about/investor/earnings-releases/

Here are my pithy observations:

  • You need to go to page 27 & 28 of their 29 page PR presentation to find out they LOST $190 million in the 4th quarter and $910 million for all of FY13.
  • This is a fabulous improvement over the $1.6 billion they LOST in FY12.
  • These government cronies have increased their auto loans outstanding by 100% since 2009 to $108 BILLION.
  • Page 14 of the presentation is the smoking gun. They had $843 million of delinquent auto loans in the 1st quarter of 2013. By the 4th quarter of 2013 delinquent loans had risen to $1.325 BILLION. That is a 57% increase in one year. SHOCKING!!! Considering they have been making loans to deadbeats who can barely scratch an X on the loan document. Do you think this trend is going to reverse in the 1st quarter of 2014? Do you understand why they are doing the IPO now, before reporting 1st quarter results?
  • They don’t even show their balance sheet in the main presentation. You need to go to the supplemental info. It’s a doozy.
    • They have over $100 billion in loans with only a $1 billion loan loss reserve. Yeah that should work out real well.
    • They have $14 billion of equity and only $77 billion of debt. Sounds like a fantastic once in a lifetime investment opportunity.

What do you think is going to happen when the $54 billion of subprime auto loans they’ve doled out over the last four years start to really go south? What do you think will happen as interest rates on their debt ratchet upwards? If they are already losing almost a billion per year, the future will be epic.

They originally filed to go public in March 2011. I wonder what took so long. I guess they wanted to get their loss under $1 billion before allowing the masses to buy into their success story.

But I’m probably wrong. Facts don’t matter. This is a fantastic investment opportunity for the muppets. Step right up and buy some Ally Financial. You bailed them out once, why not do it again?

ally-ipo-614xa

Ally Financial Inc. (ALLY) priced its initial public offering at $25 a share after markets closed on Wednesday. The IPO price was at the low end of the expected range. The company sold 95 million shares Thursday morning for gross proceeds of $2.38 billion.

The low-end pricing of the stock is just another poke in the eye to U.S. taxpayers. All the proceeds will be used to pay back the U.S. Treasury’s $17 billion bailout of the company known as GMAC back in 2008 when the financial crisis hit. Thursday’s sale reduces the federal government stake in the company from about 38% to around 14%.

Underwriters are Citigroup, Goldman Sachs, Morgan Stanley and Barclays Capital, which have an overallotment option on an additional 14.25 million shares.

One analyst at BTIG has already put a Buy recommendation on the bank’s stock with a price target of $31 a share, according to a report at TheStreet.com. That is arguable given that Ally failed its most recent Federal Reserve stress test and has set up a subsidiary on which the bank intends to shed all its bad loans.

Ally also has about $79 billion in remaining debt that the bank has to roll over constantly as the principal payments come due. From Ally’s point of view, if interest rates never rise about 0.25%, it is all right with the bank.

Shares opened down 3% at $24.25 and have since picked up slightly to $24.57.

17 Comments
  1. Stucky says:

    “I decided to go to their last SEC filing to get the real scoop about this joke ……….. Here are my pithy observations:” ———- Admin

    Phew! Ms Freud was just now emptying out her savings account to invest in this company.

    Seriously, making the time and effort to keep us Monkeys informed ………. you ARE THE BEST.

    10th April 2014 at 11:19 am

  2. Bostonbob says:

    Admin,
    Great analysis. It just goes to show how ignorant the average investor is and how pathologically greedy the large investment banks are. Great combination, they deserve each other. Unfortunately your average working stiff who just wants to get by with an honest days pay for an honest days work always gets squeezed and will be screwed in the end. That’s my analysis.
    Bob.

    10th April 2014 at 11:20 am

  3. Stucky says:

    ally-bank-sucks.jpg

    10th April 2014 at 11:22 am

  4. Bostonbob says:

    It’s a good thing GM still has the Chevy Volt to rely on.

    GM Has Sold Only 58,000 Chevy Volts in Three Years
    Print article Send a Tip
    by Warner Todd Huston 9 Apr 2014 post a comment
    Desperate to amp up sales of its Chevy Volt, General Motors is lowering prices and planning to offer a cheaper model that doesn’t go as far on a single charge as the existing model.

    Featuring a smaller, cheaper battery system, the new model Chevy Volt is going into production in Detroit in 2015.

    The Volt has sold a mere 58,158 units since it first went on sale just over three years ago. Despite price cuts, cash-back deals, and heavy promotion from President Obama and environmentalists, sales have been anemic. In comparison, the Ford F-series pickup truck, sold more than 70,000 units last month. Ford sold 763,402 F-series vehicles in 2013 alone.

    As Reuters reported, “Volt sales last year were flat, at 23,094. In the first three months this year, Volt sales dropped 15 percent to 3,606.”

    GM has shut down production of the Volt many times because sales have not justified keeping the manufacturing lines open.

    Volt sales have been so bad that its government-supported battery manufacturer struggled to stay afloat despite $151 million in Obama stimulus funding. It was later discovered that the battery manufacturer wasted millions in those tax dollar stimulus finds.

    Worse for the Volt, a long list of vehicle fires plagued its early production models.

    In 2010, President Obama toured the Holland, Michigan Volt plant in an effort to push the unpopular car on the country, claiming he would put “one million” electric cars on American roads by 2015.

    10th April 2014 at 11:23 am

  5. Bostonbob says:

    It looks like they plan on making the car crappier to improve sales. That’s a great idea. I wonder how they will market that.

    “BUY THE NEW EVEN SHITTIER CHEVY VOLT. GUARANTEED TO ALMOST MAKE IT HOME FROM THE DEALER PARKING LOT. HURRY WHILE SUPPLIES LAST.”

    I can’t wait.
    Bob.

    10th April 2014 at 11:27 am

  6. TeresaE says:

    Within 5 miles of my home and shop are dozens and dozens and dozens of empty factories.

    Over the winter the number of them being occupied by brand new, shiny, offerings from Ford and GM has increased dramatically.

    This does not bode well for Ally’s continued “profitability.”

    How is it that the reality of dotcom has already been forgotten? It hasn’t even been a generation yet.

    “Investing” in a non-profitable organization with no real plan to profitability and sustainability is not investing, it is gambling.

    And with the market roaring over fiat cash and dwindling consumers, you just have to question how much longer will this keep afloat?

    With the way things are lining up not much longer. Throw in the planetary warnings (and yes Stuck, they are screaming now and not just for the Jews and their eclipses), and this year is going to get interesting, fast.

    I think soon will be Groundhog’s Day ’08 revisited. Right before Revolution French ’89 style.

    Wowza.

    10th April 2014 at 11:35 am

  7. chicago999444 says:

    Better the “muppet” investors buy it than the taxpayers.

    All I care is, get the taxpayers out- what happens to the investors is going to happen no matter what they buy.

    10th April 2014 at 11:43 am

  8. AWD says:

    How dare you. Student loans and subprime auto loans are the only thing keeping our economy from imploding. And $75 billion a year in SNAP, and $1 trillion of year for the FSA, and $450 billion a year for disability.

    What’s a better investment than Ally? It’s backed by the full faith and cash of taxpayers. It will be bailed out forever and ever. The government wouldn’t cheat investors would it?

    The Ally IPO is way below the offering price, so I say, BUY THE FUCKING DIP!

    adf3198d2a80.gif~original

    10th April 2014 at 11:47 am

  9. Welshman says:

    I just bought 1000 Shares of Ally, and a 1000 Shares of LaQuita, when they reach 100 a share by the end of 2014, then I will cash out and move to Puerto Rico.

    10th April 2014 at 11:52 am

  10. Bostonbob says:

    Welshman,
    The trick is to move to Puerto Rico first.
    Bob.

    10th April 2014 at 11:59 am

  11. Tommy says:

    Same deal, different day. This fucking joke of a public firm will still have access to public/gubmint money with access to the fed window or such that nobody else can. Losses won’t matter, no matter how much this pump leaks they’ll flood it with enough fiat to compensate until they can’t…..when this fucker goes – it’ll all be hanging on one linch pin so don’t be underneath it.

    10th April 2014 at 12:05 pm

  12. Administrator says:

    Tops In! La Quinta And Ditech Are Back

    by David Stockman • April 10, 2014

    This Wall Street Journal headline surely speaks of a market top:

    U.S. IPO Market Expects Busiest Week Since 2007

    The next sentence virtually identifies the current IPO craze as right in line with the last top in November 2007:

    A total of 14 U.S.-listed IPOs are scheduled to price through Thursday night. If they all get done, that would mark the biggest weekly tally since the week ended Nov. 16, 2007, according to Dealogic.

    But that’s not all. We then find out what’s in the pending pipeline, and the story becomes really clear:

    The initial public offering engine looks to continue running on overdrive this week, with lender Ally Financial Inc and hotel chain La Quinta Holdings Inc. headlining the busiest week for listed debuts since 2007.

    Ally Financial used to be the disaster known as GMAC—dual fountain of sub-prime housing (e.g. Ditech!) and auto loans—which went down in flames during the financial crisis and lived to tell aboutit only due to upwards of $30 billion in wholly unjustified taxpayer subsidies and guarantees. So now its all cleaned-up and ready for retail shareholders to embark on a prosperous ride. Right!

    And then there’s La Quinta, which is an uninspired mish-mash of about 800 hotels that are impaled in the still vastly over-built mid-market lodging sector. More importantly, the company has been owned by Blackstone since 2006—most of which time it has tottered on the verge of bankruptcy after being battered by the financial crisis and Great Recession.

    Now just in time for interest rates to wend their way toward normalization, La Quinta presents itself as a ”growth” story. Yet the reported growth happened only because of Blackstone’s ingenuity in getting ”investors”— gorging on cheap debt from the Fed— to build new hotel rooms, and then sign up for stiff front-end fees and long-term franchising arrangements.

    So now the public is being invited to purchase shares at nosebleed multiples for a financial engineering operation that will surely suffer a sharp diminution in net income next time the US economy hits the skids. Indeed, at the indicated IPO range, the enterprise value would be in the range of $5 billion compared to LTM EBITDA of about $260 million.

    So there you have it—nearly 19X cash flow for a company that has been floundering for years; which had LTM revenues of $850 million or just barely above the level of 2008; which incurred a net loss of $70 million in its most recent LTM reporting; and which has no obvious competitive advantage—just another big flashing hotel marque among the dozens built along the leveraged corridors of suburbia.

    Yes, when they trot out La Quinta and the Son of Ditech it might be safely assumed that the top is in.

    10th April 2014 at 12:54 pm

  13. Welshman says:

    Has anybody stayed at LaQuinta, I did ONCE, such shitholes.

    10th April 2014 at 2:15 pm

  14. Tommy says:

    @awd, where do I have to go to get that looped people/lemmings clip, I laugh every time I see it.

    10th April 2014 at 2:22 pm

  15. Bullock says:

    Have a good friend in the auto repo business. He did say things are getting busy.

    Now there is where I need to invest some money.

    10th April 2014 at 5:49 pm

  16. Iska Waran says:

    Doh! Lost another loan to Ditech! (remember that guy in the ads?). yeah, they were real up & comers.

    10th April 2014 at 7:04 pm

  17. spinolator says:

    Okay admin…Tell us how you REALLY feel about this ipo…really, it’s not very clear.

    11th April 2014 at 3:52 pm

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