Friday File: PW Maxes Out, NVDA and BOMN Report, and more…

Latest thoughts and musings from the Real Money Portfolio (and beyond)

No real buying or selling this week… a peaceful few days of zen-ful “don’t just do something, sit there!” as we head into the holiday weekend. But I do, of course, have some updated thoughts and news items to share.

Boston Omaha (BOMN)

Boston Omaha’s (BOMN) earnings finally got restated and released, with adjustments being made to properly include Yellowstone Acquisition (YSAC) (the SPAC they sponsored) under new SEC SPAC reporting guidelines, and there’s no big surprise or scary skeleton in there that I see… the surety business shrunk dramatically from a year ago, as we knew it would, mostly because they stopped writing renters security policies with the pandemic, the broadband acquisitions came in with a decent chunk of revenue, and the core billboard rentals business this quarter came in pretty much exactly flat from last year’s first quarter. All quite boring and tranquil compared to the tail risk worries I had about BOMN’s business a year ago.

Most of the impact on their numbers came from the IPO in the first quarter of Dream Finders Homes (DFH), the homebuilder they bought about 5% of a couple years ago — that re-rating of the value of their position generated almost all of the $104 million in unrealized gains that came in as reported income for the quarter, and added to the book value.

The Yellowstone re-accounting cut into book value slightly as of the end of last year, though that’s a temporary thing and was swamped by the DFH impact (the big news will be when they either make a deal with that YSAC capital, or fail and have to return it), and now the book value per share for BOMN stands at $17.09 as of March 31. The secondary offering came after the quarter was closed, so they got another $58 million in cash and added 2.345 million shares to the company, which means they have a total share base of 28.5 million now. They have about $340 million in cash and investments following the offering (including DFH shares), assuming they haven’t bought anything else, so that’s a big chunk of the book value of $520 million or so… and what you’re mostly buying is the optionality of that big chunk of cash and tradable investments in the hands of two young investors who are trying to build a strong and cash-flowing investment conglomerate. I ...

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