Tiptree Inc. hoped in March that an IPO of The Fortegra Group Inc. would unlock value in the subsidiary that was not reflected in Tiptree’s share price.
The strategy worked for a while anyway.
Fortegra, a Jacksonville-based specialty insurance company, is the largest operating subsidiary of New York-based Tiptree. The company was purchased for $ 218 million in 2014.
Fortegra publicly announced its IPO on March 15th and proposed terms for its sale on April 20th. He was hoping to sell 8.3 million shares at $ 15-17 each.
The April 20 filing stated that Tiptree would hold 48.46 million Fortegra shares after going public. If the stocks were sold in the middle of their $ 16 range, that would translate Tiptree’s stake of about $ 775 million.
Tiptree has 32.55 million shares outstanding of its own stock. If his Fortegra stake was worth $ 775 million, the stake would be $ 23.81 per Tiptree share well above its trading price.
Tiptree closed at $ 6.51 on March 15 before Fortegra’s IPO filing was released.
After that, the stock started rising, reaching $ 10 on April 19, before the proposed IPO terms were filed. Conditions pushed the stock even higher on April 26, to a high of $ 15.48. Tiptree’s strategy of adding value by going public on Fortegra seemed to be working.
However, Tiptree abruptly canceled its IPO on April 29, the day Fortegra shares are expected to start trading on the New York Stock Exchange.
Tiptree’s stock, which had fallen from its high three days earlier, fell $ 4.51 to $ 8.04 on April 29.
The stock fell 33% last week, making it the fifth-biggest loser in US markets, according to investment website Seeking Alpha.
Tiptree said in a filing by the Securities and Exchange Commission it has withdrawn its IPO due to market conditions and the “high value” it attaches to Fortegra. This indicates that Wall Street was not seeing the same value and the company was not able to get the IPO price it wanted.
Prior to going public, Tiptree said in a filing with the Securities and Exchange Commission that Fortegra’s adjusted earnings rose 46% to $ 12.8 million for the first quarter.
This followed adjusted earnings growth of 32% to $ 43.4 million in 2020, according to Fortegra’s IPO filings.
“Tiptree continues to strive to support Fortegra in the continuation of its growth path and regards the specialty insurer as a central operating business in the Tiptree corporate family,” said Tiptree in its filing of the withdrawal.
Stein Mart share will be canceled
Stein Mart Inc. went public in 1992 when initial public offerings were not that common.
The Stein Mart era as a public company officially came to an end last week when the fashion retailer’s Chapter 11 bankruptcy plan went into effect on April 28th.
Stein Mart filed with the SEC notices stating, as of the Effective Date, “All common stock in the company and all outstanding options to purchase common stock will be canceled.”
Stein Mart closed the last of its stores in October, when it was essentially going out of business.
The steinmart.com website has been restarted by Retail Ecommerce Ventures, which acquired Stein Mart’s intellectual property in bankruptcy court. This online business is not affiliated with the former Jacksonville-based company.
Panhandle growth is helping St. Joe
The St. Joe Co. saw a sharp increase in first-quarter sales last week. The property developer said it was benefiting from the growth of the Florida Panhandle.
St. Joe was a longtime Jacksonville-based conglomerate involved in various industries and owned large lots in the panhandle.
The company sold its industrial operations to focus on developing that country and relocated its headquarters to the region in 2010. The head office is now in its own office park in Panama City Beach.
St. Joe more than doubled its revenue in the first quarter to $ 41.3 million and posted earnings of $ 3.2 million, or 5 cents per share, which made up for a loss in the first quarter of 2020.
In a press release, CEO Jorge Gonzalez said revenue growth was significant as the winter quarter is typically the slowest time of the year.
“We believe this is an indication that northwest Florida is becoming less seasonal, more of a year-round vacation destination, and that the number of residents who choose to live here all day is increasing,” Gonzalez said.
“We believe these trends will continue and we have positioned the company accordingly,” he said.
The book profit increases the FRP result
FRP Holdings Inc. saw a sharp increase in earnings for the first quarter due to a gain related to a real estate partnership project in Washington, DC
As a result of this gain, Jacksonville-based FRP posted earnings of $ 28.4 million, or $ 3.03 per share, compared to earnings of $ 1.6 million, or 16 cents per share, last year.
The gain related to accounting for his ownership interest in a project called The Maren, one of two mixed-use riverside projects developed by FRP near Nationals Park, home of the Washington Nationals baseball team.
According to FRP, leasing has been strong on the two projects despite the COVID-19 pandemic and a return to normal activity is expected to support business at the sites.
“The fact that baseball started again with fans in attendance should only further increase interest in our properties and increase revenue for our retail tenants,” the company said in a press release on April 3.
Institutional investors buy shares in the GEE Group
GEE Group Inc. did not report any major institutional investors prior to the sale of the secondary shares last month.
After selling 83.3 million shares, which significantly increased the number of shares outstanding, five companies filed SEC filings indicating significant investments in the Jacksonville-based human resources company.
One of these companies has already made a profit on its investment. FiveT Investment Management Ltd. reported buying 10 million shares at 60 cents each as part of the April 18 offer and then selling 5.04 million of these shares at prices a little over 60 cents.
The sale reduced FiveT’s stake in GEE Group to 4.7%, which is below the 5% threshold required by companies to file their ownership interests with the SEC.
The GEE Group used the proceeds from the sale of shares to repay debts.
“Following our recent successful successor share offering, the repayment of these debts represents another important milestone and significantly improves the company’s current financial position and balance sheet. It will also benefit GEE’s future financial results,” said Derek Dewan, CEO of GEE Group. in a press release.
Kraft Heinz coffee sales are falling
Kraft Heinz Co. reported that coffee sales fell 23.6% to $ 210 million in the first quarter, according to the SEC’s quarterly filing.
However, the food conglomerate didn’t address the coffee business at all in its quarterly presentations to analysts last week.
Kraft Heinz’s primary coffee brand is Maxwell House, and the only remaining U.S. Maxwell House facility is the downtown Jacksonville facility at 735 E. Bay St.
Financial news has said for more than two years that Kraft Heinz would like to sell the Maxwell House business as it is restructuring its operations, but those in charge of the company have never spoken about it publicly.
Kraft Heinz’s total revenue rose 3.9% to $ 6.39 billion in the first quarter and earnings rose 14 cents per share to 72 cents.