Tom Brady Loses at least 70% on Crypto, Disney hits 5-Year Lows
Celebrities are getting burned on crypto. Stable value stocks like Disney are in the bargain bin.
Apparently, Tom Brady and Gisele Bundchen put nearly $600 million into FTX crypto. Here’s Tom showing us his investment thesis on the ponzi scheme.
How’s FTX doing? Not well. If this is any indication of the investment performance, Tom has just lost at least $400 million of his fortune with a 70% loss.
But, the real question is… will the Bucs win this weekend? The Buccaneers are 4 - 5 this season. At 45, this has to be his final season, unless he is okay with being a back-up and making the league minimum. (He might need the cash.)
Is Disney a value stock again?
Disney (DIS) shares just dropped to near a 5-year low where the stock crashed during the March 2020 COVID scare. With a trailing PE over 50, it looks like it might fall a lot more. However, this is a business with considerable brand power. No fund manager would get fired buying the dip here.
I wouldn’t be surprised if Disney sold ESPN and other units that really don’t line up with their historic brand. There’s value to unlock here. Someone will figure it out.
Here’s a great graphic found on Twitter. Brands like Hulu and ESPN are not growing as quickly as Disney+. That makes them dead weight and they would make excellent spin-offs.
Angel Oak Reports Loss
In mortgage news, Angel Oak (AOMR) just reported a net loss for the most recent quarter. The CEO’s comments explain a big portion of this.
Sreeniwas Prabhu, Chief Executive Officer and President of the Company, commented, “Third quarter results are demonstrative of the continued dislocation of the fixed income market characterized by historic spread-widening and limited capital market activity coupled with an aggressive Federal Reserve increasing the Fed Funds target rate two times during the quarter. As such, AOMR focused on managing liquidity and protecting its capital structure. Unrealized losses associated with our mark-to-market assets were the key driver of our GAAP net loss and book value decline; however, it is important to note that the credit performance of these assets remains strong, and we believe that they are ultimately expected to pay off at par, offsetting the mark-to-market losses. In order to preserve additional capital and to right-size our dividend yield at the current book value, we have made the decision to reduce the quarterly dividend to $0.32 per share of common stock. Sticking to our core business model, we will remain disciplined while prudently accessing the securitization market to reduce interest rate risk, allowing us to create long term value for our shareholders.”
As we all know, the recent string of Fed rate hikes has been devastating bond market prices. As rates go up, bond prices drop. The same happens with a mortgage originated at a fixed rate, when mortgage rates are rising. NonQM lenders that continued to make mortgages during the past few quarters booked mark-to-market losses and some are sitting on assets they cannot securitize.
If rates reverse course and begin to drop, these assets will go back up in value and these mark-to-market losses will reverse. Angel Oak is near the bottom of it’s 52-week range at $9/share.