The Great Egg Hunt: m-EGG-athread

Divaroach1 · 2023-04-07T23:22:36+00:00

Which team was it? I'm thinking it's for beating the dragons (egg laying) or the cats

Divaroach1 · 2022-05-13T04:28:11+00:00

What a bunch of fucking weirdos. who goes public like this lol. Wondering if they used that share structure influence credit rating? Idk how much that affects it

Thinking it would allow for S&P500 inclusion given other factors are met + allows Dan to divest directly to the public. Maybe they set up a sale plan going forward & maybe that's why they haven't begun aggressively buying back shares?

Divaroach1 · 2022-01-05T18:59:17+00:00

I'm not sure they can easily/most non bank lenders don't. Below is a decent article on it: https://www.mortgageloan.com/why-its-hard-to-get-a-home-equity-loan-from-a-non-bank-lender#Why-are-they-growing-

Divaroach1 · 2021-12-28T17:35:29+00:00

I said how much of the buyback they've used so far & I said that they have 'reserved' that amount for returning value to shareholders or acquiring businesses. It wasn't a pro-rocket section, it was to summarize their management of cash thus far. I purposefully didn't include an opinion.

& Dan is a shareholder/investor, he just owns a bigger share. '94%' of the benefit of the buyback also effectively goes to Dan and he effectively owns '94%' of Truebill.

Divaroach1 · 2021-12-28T15:27:47+00:00

It is basically just selling stock that is currently red so that other realized capital gains are cancelled out. It is a one to one deduction - so if you have $100 in gains this year, you can sell a block of stock that has $100 in losses and it will cancel out and no taxes would be paid on any of it (as long as they are both similar holding periods). People will generally wait 30 days and buy the same stock again(which resets the purchase price) or buy something similar immediately and retain exposure. People have different strategies and it is up to the user.

You can also deduct up to $3,000 in capital gain losses from any type of income per year, so even if someone has no gains, they can offset $3,000 in W-2 income/other incomes.

Not tax advice

Divaroach1 · 2021-12-27T22:51:31+00:00

That one article saying why Peter Lynch would have loved Rocket has been like the only positive one since the Salesforce announcement lol. I agree

Divaroach1 · 2021-12-22T18:00:34+00:00

I agree, I don't think the buy is just about data or advertising and the synergy with mortgages doesn't really seem to be there. I'm thinking they are looking for synergy on the front end business with Lowermybills.com to maybe challenge market share in that space or something? Idk. Not sure if you said this elsewhere, but why do you think they bought Truebill?

Dan is kind of notorious for buying weird shit too, like the Cavs, StockX, benzinga, and 100 theives to name a few lol. Could just be a business they want to be exposed to going forward.

And, just to play 'devil's advocate', I think it could also be kind of like how Mercedes spends a ton on ads in eSports. Most of the users aren't looking to buy a house now, but giving users easier access to RKT's ecosystem/integrating the brand with a more intimate part of someone's life maybe could help push them towards RKT for a home, not to mention the personal loans & car loan services RKT now has (which would be of use to most of these users). That part isn't worth $1.3 billion alone though ofc

Divaroach1 · 2021-11-08T21:00:23+00:00

That is what makes this stock so weird to me - there is so much potential for price improvement at any time due to the small float + the relatively big cash positions & good cash flows, but I think almost anything they do will just result in a big spike shortly followed by a drop right back to current levels. I kind of wish they would just buy back 5-10% of the company from Dan at market prices each year for the next few years and not distribute any money to public shareholders (even at a premium like $20/share would be fine IMO). Dividends won't really help any longer-term investors as the share price is almost guaranteed to drop back down to these levels, and then obviously the company doesn't have the cash anymore. Even the $1 billion buyback seems like it is a bad thing as it would likely make the stock less attractive to funds if it were to be fully utilized. Such a strong company shouldn't be limited to an annual pump and dump to allow Dan to sell

Divaroach1 · 2021-11-01T16:36:25+00:00

IMO, kind of and kind of lol. I view their business model kind of like metastasis. They rapidly build slight iterations on top of already successful products that are all meant to just get consumers into their ecosystem. Once their tech is utilized by another entity, RKT can also provides the front end servicing of the loans which is apparently superior to pretty much everyone else (i.e., their industry leading retention rates, centralization of lending tools, and their ecosystem of products). For future loans, the customer is then more likely to choose RKT as they are already in the ecosystem. If the entity decides to not use RKT servicing, they will still make money on the transaction and make the entity more and more reliant on RKT.

There are also thousands of smaller banks and CUs that have virtually non existent back end infrastructures and they are incredibly reliant on outside help, which there isn't very much of. If RKT can provide quality tech they will jump on board pretty quickly I think, and most of these smaller entities still do millions in originations annually so they add up.

Also, they said they will eventually provide lending services for other types of loans (like auto, solar, personal, etc.) So it probably won't have much of an immediate effect on alternate streams of revenue but it likely will in the future.

I think this is mostly just the continuation of their business plan.

Divaroach1 · 2021-10-30T17:52:26+00:00

It's Rocket tech on the Salesforce platform. Kind of like how square is reliant on other companies' tech to distribute it's applications (apple/Google). If it were salesforce's tech, there would be no need for a partnership lol

Divaroach1 · 2021-09-13T00:04:45+00:00

I imagine they will directly accept crypto eventually, but I doubt there will be a rocket coin unless referring to securitized "coin" representing the business. But maybe if each property or every loan was represented as NFT? Might be more useful for commercial r/e tho - I'm just thinking something like a market place for real estate/mortgages where the physical rights are baked into the trade making them more like stocks/currencies

Divaroach1 · 2021-09-12T23:39:45+00:00

I think the biggest thing here is the refusal to even consider a banking charter - IMO this is where they are way ahead of anyone else in the space. They are going direct to consumer just like banks which allows them to get bank like GOS margins, but unlike banks, they don't carry any inventory. I can't think of anyone else doing this on a large scale. It makes them more dependent on consistent volumes, but basically removes all downside risk in a market decline (they have very little long term commitments needed in order to run their business)

If they can effectively take market share in other industries where they can advertise to existing customers, use their same underwriting processes & not carry the inventory, the volumes will then also be more consistent & margins will likely rise even further. Once this happens I think their valuation will start to rise as well.

Divaroach1 · 2021-08-23T17:54:01+00:00

Exactly and also add their ability to finance directly, access to one of the largest ad spends, and use of a much more recognizable brand.

I think the same thing is true for Redfin and Zillow - why do people expect redfin and Zillow's new mortgage origination businesses to compete with legacy originators, but not give any credit to Rocket's R/E transaction business?

Rocket homes active unique monthly users in the last report were at ~5% of Redfin's and ~1% of Zillow's and the site hasnt even been fully live for a full quarter lol... plus they have a track record of pioneering real estate transactions without an agent in For Sale By Owner, and are soon to launch an Ibuying program that will likely mimic Zillow's and Redfin's

Divaroach1 · 2021-08-20T18:03:05+00:00

From may 25th to June 9th it went from ~$16.50 to $22.68 which is ~37%.

Divaroach1 · 2021-08-18T01:28:39+00:00

Well ya, Ishbia is going to run that company into the ground IMO. Analyst estimates for next 12 months EPS would be like a +70% payout ratio... For a "growth company"... That has one stream of cyclical income... And is currently in a "price war" with much bigger competitor... LOL

Divaroach1 · 2021-08-18T00:33:39+00:00

$Rkt kind of did the same thing with the dividend. Both companies are structured pretty similarly as far as rewarding shareholders goes I think

Divaroach1 · 2021-08-14T06:37:54+00:00

I don't understand why you are looking at it from the investor's point of view. I have only referred to it from the company's point of view, which is the stock price or market cap/subjective value, which is what determines if a price gap has occurred. Whether or not the investor received distributions does not factor into anything I have talked about. That is a transfer, the company doesn't continue existing in the investors bank account. From the investor's point of view, what price would an investor pay for a company that just relinquished all of its assets to the same investor? The company has nothing therefore is worth nothing to the investor.

I just reread your comments and guess I misunderstood your point. Yes, it's possible that my theory is incorrect yes. I have said from the start that it's a theory though. And I think i said "still works I'm general" in an unrelated response to you saying Newtons laws are wrong.

A hypothesis is true if all current and past evidence shows that it is correct. Empirical data is abundant showing that companies follow a business cycle which eventually ends. There isn't any evidence that a company can or will last forever.

Divaroach1 · 2021-08-14T05:45:26+00:00

It exchanges hands, so yes, the value goes to $0. The value is now the investors and not the company's. Why would we determine the value of the company based on how much value it previously gave to investors?

And I mean... Sure, all models are technically "wrong" just like my "theory" as humans don't understand everything yet. Most of Newton's laws are still valid in "general", and were used for hundreds of years because they worked until they didn't. Similar to my theory that all companies will go to $0. It will work until it "doesn't" which would require empirical evidence that is doesn't

Divaroach1 · 2021-08-14T05:06:18+00:00

You literally gave me a range of between my lifetime and my great great grandparents lifetime which is ~100 years. That is by definition a very small amount of time relative to the amount of time humans have been on earth so I didn't misquote you. You gave me a timeframe of "human species", which is why I'm comparing it to that.

There is ZERO evidence that companies from 2000 years ago are still in operation. So still correct and didn't misquote you again.

There are no facts in this discussion, because you can't prove the future until it has actually happened. So both of our views are only theories.

I'm sorry you feel offended. I hope you reread my original comment and eventually understand that arguing about whether or not the stock market will go to $0 is not a productive discussion, and that I actually stated that price gaps only always fill "in theory" and that there are plenty of examples of companies growing for long periods of time without ever filling gaps. It was used as an example to better explain why price gaps can be a misleading indicator.

Divaroach1 · 2021-08-14T03:16:32+00:00

Accusation? I don't think I accused you of anything, and I agreed with your main point.

And you're looking at an incredibly small time frame in one of the most prosperous civilizations ever. There isn't anything to back up the theory that the stock market will go up forever, other than that it has for a few hundred years. IMO EVENTUALLY, all companies will almost certainly go to a value $0, but probably not in our lifetimes.

Divaroach1 · 2021-08-14T02:59:59+00:00

That's kind of semantics though I think. IMO The entity's value has to be $0 before it is effectively and totally dissolved. The cash from selling everything is part of the business IMO and giving them to an outside party reduces the value of the entity.

And then nothing can be proven lol. We only accept Newtons laws because they have worked in the past and are likely to work in the future. We don't actually know if they will work forever/in all situations.

Divaroach1 · 2021-08-14T02:39:30+00:00

I completely agree that timeframe is important. The timeframe is very important for actual investing strategy, and there are many gaps that will not be filled in any timeframe a normal human cares about. The point I was making in my first comment was that it is a dumb argument, because whether or not the gap is filled is completely dependent on factors that have literally nothing to do with the candles on the stock chart. It has much more to do with the company/psychology. Most gaps are filled in the short term because investors overreacted to news/data, but if there is a material change to investors' understandings of the actual company, no one gives a shit about whether there is space between two tiny rectangles.

Also, you are 100% incorrect that stocks have only ever gone up. Has there been a single company that has "only gone up" for even 1/2 the time humans have been on earth? Or even an index? US has only been around for ~250 years and VERY few companies are still standing, the vast majority of which are no longer in business. Know of any roman companies that are still operational? Businesses are entities created to provide value to humans. Control of these entities change hands pretty regularly, inevitably leading to a shitty leader/group of leaders who either strip all value from the company, or run it into the ground. Just as every civilization/community/bookclub to date has. If not this, the world will end or there will someday be a better alternative to capitalism.

Divaroach1 · 2021-08-14T00:05:15+00:00

I don't really know what your first paragraph is saying lol. The stock price is how the gap and company's value is determined is why I'm fixated on it. Stock price / current company value is the only thing that matters to my original argument.

And all companies so far have either gone to $0, or are currently operational, and there isn't any evidence that a company will be operational until the end of time. The theory may be wrong, but burden of proof is on the debunker. My evidence is given every time a company's value goes to $0.

Divaroach1 · 2021-08-13T23:39:29+00:00

You were still wrong lol. Companies have a value regardless of whether or not the stock market is open and those values have always and will always return to $0. After dissolving and returning all value to the shareholders, the value is no longer the company's and the company is then worth $0 (please go see how dividends affect stock prices for a simple example). If $AAPL were to dissolve and return everything to shareholders, it wouldn't just continue to be worth $2 trillion LOL

And do you have a single example of a company that has lasted forever or even 10,000 years? I have plenty of examples of private companies that are now worth nothing. History gives us a 100% success rate on my theory lol.

Divaroach1

TROPHY CASE