You know the reverse world of Superman comics? Where the world is shaped like a cube and these clownish “superheroes” screw everything up. Welcome to the world of Motley Fool “analyst” Jordan Wathen.
Seriously, the kid’s clueless “analysis” of the taxi medallion financial industry is so flawed, he would fail any basic college economics class.
And yet, the Motley Fool seems content to let him besmirch their brand.
In Jordan Wathen’s latest nonsensical manifesto, published at the Motley Fool, he makes a claim that a taxi medallion foreclosure transaction represents the “true market value” of a NYC taxi medallion.
On what planet does Jordan Wathen reside?
On what planet does a foreclosure transaction represent the true market value of any asset?
Jordan Wathen provides no information regarding the foreclosure sale. For starters, my sources are telling me this is a partial sale, not for 100% of the value of the medallion. Additionally, some sales are done with liens attached. Thus, if a taxi was in an accident, it is possible the taxi medallion buyer is assuming that liability.
“Some medallions are what are called “dirty”, meaning that the buyer assumes certain liabilities, such as damage from prior accidents. Thus, they can sell for below market prices.”
So Clown Car Driver Jordan Wathen wants us to believe that 50% ownership in a damaged taxi that sells below the market price of every other taxi medallion is the “true market value” of 100% ownership in an undamaged taxi?
I mean, Jordan Wathen literally posted a chart of taxi medallion financial transactions, of which one was a foreclosure and a handful of others went out at more than double the foreclosure price…but the foreclosure price represents “true market value”?
There’s a very simple analogy that demonstrates how wrong BizarroWorld King Jordan Wathen is on this issue. Let’s take a neighborhood where there are a limited number of housing layouts. It might be a development where all the houses are the same, or a neighborhood where a limited number of layouts were created by the developer.
Suppose each house was worth a million dollars in 2007. During the housing crisis, the value of these homes fall to $750,000. One of them goes into foreclosure and sells for $400,000, because the bank – as many banks did – sold these houses in bulk to distressed asset purchasers.
Suddenly the “true market value” of every other house is $400,000?
No, it isn’t.
The same applies to the taxi medallion financial industry.
Jordan Wathen is short the taxi medallion financial stocks. The short sellers like him, James Hickman, and Gordon Gossage, have been lying their way across the internet for almost a year. They make up data. They take existing data and spin it to fit their narrative.
In the meantime, the taxi medallion financial industry reports strong earnings with modest delinquencies.