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Author: metro Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 6881  
Subject: Re: Extreme Undervaluation??? Date: 4/9/1997 2:46 AM
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On Tue, 08 Apr 97 18:59:04 -0600, tomjoad wrote:
<<

There is a classic arbitrage situation that exists in the stock market

at this time. A company that came public last week, The Enstar Group

(ESGR) on the Nasdaq Bulletin Board, is being offered at $9.88/share.

The company, which is essentially a 'shell' company, owns 853,423 shares

of First Union Corp. (FTU) stock. FTU, for the uninitiated, is the 6th

largest bank in the U.S. FTU is currently quoted at $84.25/share on the

NYSE. There are 4,750,534 shares of Enstar Group stock outstanding. If

you multiply Enstar's FTU holdings by the current market price, and

divide that figure by the number of Enstar shares outstanding, you

arrive at a value of $15.09/share. Therefore, you can purchase Enstar

shares at $5.21/share less than they are actually worth just based on

their assets. This is a discount of 34.5%. I bought 500 shares

last Friday. The recent selloff in this market has produced

opportunities. Do your homework.

>>
This seems a bit odd to me, and seeing that it is spammed in almost every folder, I'm seriously questioning the validity of it. If this is remotely accurate/true would someone explain it to me? I'd really appreciate it.

Metro
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Author: tomjoad Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9 of 6881
Subject: Re: Extreme Undervaluation??? Date: 4/9/1997 5:48 PM
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On Wed, 09 Apr 97 02:46:59 -0600, metro wrote:
<<On Tue, 08 Apr 97 18:59:04 -0600, tomjoad wrote:

<<



There is a classic arbitrage situation that exists in the stock market



at this time. A company that came public last week, The Enstar Group



(ESGR) on the Nasdaq Bulletin Board, is being offered at $9.88/share.



The company, which is essentially a 'shell' company, owns 853,423 shares



of First Union Corp. (FTU) stock. FTU, for the uninitiated, is the 6th



largest bank in the U.S. FTU is currently quoted at $84.25/share on the



NYSE. There are 4,750,534 shares of Enstar Group stock outstanding. If



you multiply Enstar's FTU holdings by the current market price, and



divide that figure by the number of Enstar shares outstanding, you



arrive at a value of $15.09/share. Therefore, you can purchase Enstar



shares at $5.21/share less than they are actually worth just based on



their assets. This is a discount of 34.5%. I bought 500 shares



last Friday. The recent selloff in this market has produced



opportunities. Do your homework.



>>

This seems a bit odd to me, and seeing that it is spammed in almost every folder, I'm seriously questioning the validity of it. If this is remotely accurate/true would someone explain it to me? I'd really appreciate it.



Metro

>>
I take exception to your characterizing my posts as "spams". I posted to
about half a dozen groups that I thought were appropriate, and BTW, it is valid.


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Author: metro Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10 of 6881
Subject: Re: Extreme Undervaluation??? Date: 4/9/1997 11:45 PM
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On Wed, 09 Apr 97 17:48:29 -0600, tomjoad wrote:
<<
On Wed, 09 Apr 97 02:46:59 -0600, metro wrote:
<<On Tue, 08 Apr 97 18:59:04 -0600, tomjoad wrote:
<<
There is a classic arbitrage situation that exists in the stock market at this time. A company that came public last week, The Enstar Group (ESGR) on the Nasdaq Bulletin Board, is being offered at $9.88/share. The company, which is essentially a 'shell' company, owns 853,423 sharesof First Union Corp. (FTU) stock. FTU, for the uninitiated, is the 6th largest bank in the U.S. FTU is currently quoted at $84.25/share on the NYSE. There are 4,750,534 shares of Enstar Group stock outstanding. If you multiply Enstar's FTU holdings by the current market price, and divide that figure by the number of Enstar shares outstanding, you
arrive at a value of $15.09/share. Therefore, you can purchase Enstar shares at $5.21/share less than they are actually worth just based on their assets. This is a discount of 34.5%. I bought 500 shares last Friday. The recent selloff in this market has produced
opportunities. Do your homework.
>>


This seems a bit odd to me, and seeing that it is spammed in almost every folder, I'm seriously questioning the validity of it. If this is remotely accurate/true would someone explain it to me? I'd really appreciate it.

Metro
>>

I take exception to your characterizing my posts as 'spams'. I posted to about half a dozen groups that I thought were appropriate, and BTW, it is valid.
>>

I apologize for calling them "spams", I'm just used to disregarding anything that I see posted more than once, It's from reading too many newsgroups.

I don't understand the concept of the "shell" company. Do they do anything? Or are they just a company that holds stock in another company? It just seemed odd to me that you could buy one at a discount and get the other. To me it's kinda like buying a pepsi when you want a coke, only to find that the pepsi is on sale, and is really filled with coke. I guess I didn't word my question very well the first time.

Metro

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Author: tomjoad Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11 of 6881
Subject: Re: Extreme Undervaluation??? Date: 4/11/1997 1:23 PM
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On Wed, 09 Apr 97 23:45:00 -0600, metro wrote:
<<On Wed, 09 Apr 97 17:48:29 -0600, tomjoad wrote:

<<

On Wed, 09 Apr 97 02:46:59 -0600, metro wrote:

<<On Tue, 08 Apr 97 18:59:04 -0600, tomjoad wrote:

<<

There is a classic arbitrage situation that exists in the stock market at this time. A company that came public last week, The Enstar Group (ESGR) on the Nasdaq Bulletin Board, is being offered at $9.88/share. The company, which is essentially a 'shell' company, owns 853,423 sharesof First Union Corp. (FTU) stock. FTU, for the uninitiated, is the 6th largest bank in the U.S. FTU is currently quoted at $84.25/share on the NYSE. There are 4,750,534 shares of Enstar Group stock outstanding. If you multipl

y Enstar's FTU holdings by the current market price, and divide that figure by the number of Enstar shares outstanding, you

arrive at a value of $15.09/share. Therefore, you can purchase Enstar shares at $5.21/share less than they are actually worth just based on their assets. This is a discount of 34.5%. I bought 500 shares last Friday. The recent selloff in this market has produced

opportunities. Do your homework.

>>





This seems a bit odd to me, and seeing that it is spammed in almost every folder, I'm seriously questioning the validity of it. If this is remotely accurate/true would someone explain it to me? I'd really appreciate it.



Metro

>>



I take exception to your characterizing my posts as 'spams'. I posted to about half a dozen groups that I thought were appropriate, and BTW, it is valid.

>>



I apologize for calling them 'spams', I'm just used to disregarding anything that I see posted more than once, It's from reading too many newsgroups.



I don't understand the concept of the 'shell' company. Do they do anything? Or are they just a company that holds stock in another company? It just seemed odd to me that you could buy one at a discount and get the other. To me it's kinda like buying a pepsi when you want a coke, only to find that the pepsi is on sale, and is really filled with coke. I guess I didn't word my question very well the first time.



Metro

My understanding is that Enstar is what emerged from a bankruptcy reorganization. They plan to buy a business at some point, but in the mean time, it is purely an asset play. BTW, the current management is not the one that was involved with the company's prior difficulties. I know it seems strange that you're getting more than a dollar's worth of value for a dollar, but virtually no one knows about this company. It's too small for institutional ownership and it's traded on the OTC Bulletin Board (they've applied for NASDAQ listing), so it's obscure, to say the least.

It doesn't seem to make sense that some closed-end funds trade at discounts to net asset value, but this happens regularly. Go figure.

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Author: LurkyLurky Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6875 of 6881
Subject: Re: Extreme Undervaluation??? Date: 6/24/2007 5:44 PM
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My understanding is that Enstar is what emerged from a bankruptcy reorganization. They plan to buy a business at some point, but in the mean time, it is purely an asset play. BTW, the current management is not the one that was involved with the company's prior difficulties. I know it seems strange that you're getting more than a dollar's worth of value for a dollar, but virtually no one knows about this company. It's too small for institutional ownership and it's traded on the OTC Bulletin Board (they've applied for NASDAQ listing), so it's obscure, to say the least.

It doesn't seem to make sense that some closed-end funds trade at discounts to net asset value, but this happens regularly. Go figure.


Congratulations: 10 years later, ESGR is a 10-bagger!

I ran across your posts when trying to find out a little bit more about ESGR. I actually own a few shares--this is another case of my "buy stock, research stock" strategy. I see that Bill Mann owns it, too, so that is some comfort. I'm curious as to why it's so thinly traded.

Anyway, kudos to you for spotting it early. I wonder how you found out about it. Got any other tips? ;-)

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