23 thoughts on “Ladenburg Thalmann Announces Earnings”

  1. So about that LTSH,,,anyone fishing at a 25% discount? Or wait for say a possible 40-50% discount like AFSI bonds had?

  2. So what happens to the preferreds and baby bonds post merger? I don’t think Advisor is listed so do these becomes orphaned and possibly de-listed? Doesn’t seem like the merger is credit positive for either company although the combined company will be much larger and diversified than LTS. No position but curious to see what happens as I’ve been bearish on these prefs/bonds and am yearning to be proven right. 🙂

    1. Landlord, Havent seen details, and no SEC filing has occurred yet. One usually gets definitive answers in the details. Since the 8% preferreds were roughly 50% of capitalization prior to announced merger price if would seem unlikely they would “cut the check” for that amount. Yet if they have access to capital one would think they would access it to redeem these. As poor rated B preferreds going to market can get lower yields than this outfit could.
      They do not have to be delisted necessarily. I havent checked LTS-A provision for this, but usually a company can. And many times they do since they are private and no compelling need to pay also the onerous fees entailed in reporting and staying exchange compliant.
      And nothing may happen for quite a while. Or they could quietly delist a year or so later….In other words anything can happen. Now what would pique my interest in an aggressive play would be if they announce delistment. That almost guaranteed would drop it and maybe quite a bit. Even rock sold MB Financial dropped $2 when they got delisted. That was an easy $2 trade for me when that happened earlier this year.
      I wouldnt hang around for the end of the party but if they dropped half as much as Amtrust preferreds did (which have doubled off the lows and still pay) I would buy off a crater and sell after the panic was over. These have a cumulative feature to them so they wont stress nearly as much as Amtrusts did though, I am reasonably sure.

      1. Great analysis, Grid. I would also buy the LTS bonds on a big drop from delisting. Have done well with my Amtrust bonds and still holding. What I like about the LTS ones is they are not jr. subs but sr. unsubs and they don’t have a maturity date decades out like some baby bonds.

    2. LTS filed an 8k this morning that all baby bonds will likely be delisted, see below from the 8k:

      “The Merger Agreement requires the Company, upon Advisor Group’s request, to use reasonable best efforts prior to closing to enable the surviving corporation in the Merger to delist and deregister the Debt Securities (to the extent listed or registered) and Preferred Shares as promptly as practicable after the Effective Time.”

  3. LTS-A is my longest held and steadiest performing QDI preferred. Always overweight and leveraged to boot. Living in the independent B/D industry for decades and knowing the trends has made this one of my most stress-free holdings.

    I truly enjoy all the negative comments after every solid reporting quarter. They are as reliable as rain…as is my response based on my actual results!

    1. Bravo, Quick! I’m with you. These LTSH/LTS-A hold steady in the face on relentless pressure. Always paid me as regular as rain and another ex-date coming up for LTS-A shortly. I’ll hold LTS-A thru the ex-date to collect the divvy but did just liquidate LTSH (only because I want SACC instead for a flip)… I do post this for those who haven’t mentioned it:

      Upon the occurrence of a change of control the company will have the option within 120 days to redeem the preferred shares at $25 per share plus accrued and unpaid dividends. If the company has exercised their redemption right, the holders will NOT have the following conversion right. Upon the occurrence of a change of control, and the company has NOT provided notice that they intend to redeem the preferred shares, the holder will have the right to convert the preferred shares into common shares under certain circumstances (see the prospectus for details).

  4. From Barron’s:
    Advisor Group Reportedly in Talks to Buy Ladenburg

    Nov. 1, 2019 5:03 pm ET

    It looks like Ladenburg Thalmann could become part of Advisor Group.

    Advisor Group, an independent broker-dealer network purchased earlier this year by private-equity shop Reverence Capital Partners , is in exclusive talks to buy Ladenburg, Bloomberg reported Friday afternoon, citing anonymous sources familiar with the situation.

    A final decision has yet to be made, and the negotiations could still fall apart, according to the news outlet. Spokespeople for Ladenburg Thalmann and Advisor Group didn’t immediately respond to requests for comment, Bloomberg said.

    Earlier this week, Bloomberg had reported that Ladenburg Thalmann, a network of IBDs with about 4,400 financial advisors, was working with an advisor to explore potential offers. Barron’slater confirmed the Miami-based company had hired investment bank Jefferies to explore a possible sale.

    The news comes after private-equity firms have revealed a hearty appetite for IBDs over the past year and a half. The Reverence purchase of Advisor Group took place in May. In February, Warburg Pincus acquired a majority stake in Kestra Financial. And last summer, Genstar bought Cetera Financial Group.

    1. From Advisor Group’s about page…seems like a good fit.

      “Advisor Group is one of the largest networks of independent wealth management firms in the United States. The four individual firms that comprise Advisor Group — FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial, and Woodbury Financial Services — foster the spirit of entrepreneurship and independence that our more than 7,000 advisors exemplify.”

    1. Max,
      I own both LTS-A and LTSH and have them in the “speculative” camp of my battlefield. Smaller positions just juicing yield. Many here dislike anything to do with them but I’ve found them to be doing the job if kept within that camp of mine.

        1. Max, Grid and I have done extensive work on Ladenburg’s balance sheet (I spent 24 years on Wall Street) over the last few years. In my humble opinion, it is truly a house of cards and the alleged merger will just be to coverup managements issues that will not go away and knowledge of certain future events…
          Please do your own deep due diligence and never trust someone that is on the internet posting their opinions and recommendations if they have a vested “interest” in you buying a certain security.
          Time flies over us but leaves it’s shadow behind, Nomad

          1. I, too, have passed on LTS baby bonds in the past, but the talks of being bought out, had me wondering whether or not there was the possibility of a better credit type company ending up assuming the notes… Looking into Advisor Group and Reverence, I see where it’s a moot point if they are the acquirers because Advisor Group’s senior SECURED is rated B+ by S&P and is on credit watch NEGATIVE due to the Reverence Capital Partners acquisition of them. With LTS notes being unsecured, even if they were assumed they’d be B- at best even before any action due to the negative credit watch.

            1. Guys, the 3rd rate wealth management business is in a state of decline. This is why its consolidating to survive. Money under management is assets are what matters. And the big boys are making the business more cut throat every day. The fat fees for everybody gorging at the same trough is disappearing fast.

              1. LTS, just this moment announced a merger https://finance.yahoo.com/news/advisor-group-ladenburg-thalmann-announce-003500138.html
                Grid, my records only go back for LTS to 2015 and they have not earned a penny in any of these last 5 years.
                Net income available to common shareholders:
                2015 LOSS -$39+ Million
                2016 LOSS -$52+ Million
                2017 LOSS -$24+ Million
                2018 LOSS -$300 Thousand
                2019 LOSS -$4+ Million YTD
                Run don’t walk away from this horrendous “broke”r…

                1. Hmmmmmmm, so it looks like this B1 secured rated company that’s just taken on 2 1/2 times its existing debt level because of its leveraged buyout by Reverence is now going to finance probably with almost all borrowed funds an over $500 million cash purchase of LTS. From S&P commenting BEFORE KNOWING ABOUT THE LTS deal writes, “The affirmation on Advisor Group reflects that we believe the firm’s increased earnings and operational improvements should allow it to shoulder the 2.5x increase in debt from Reverence Capital Partners’ leveraged buyout of the firm. We estimate that the firm’s interest and debt amortization expenses will approximate $110 million to $120 million per year.” Throw on probably another $30 mil annually in interest and debt amortization from this cash deal and gee, what could possibly go wrong when a leveraged buyout buys out yet another firm immediately? Debt service? Who’s afraid of a little debt service…. Everything’s gonna be hunky dory forever…. LTS shareholders ought to be willing to vote multiple times each to get this done and be out….

                  1. 2whiteroses, thank you so much for your astute information.
                    I have so many things in my analytical head to say…
                    I’m reminded of a story many years ago (I think about 1995) my Dad and I took a flight to see Johnny Cash as my father was meeting with him that weekend to see if he would like to be a spokesman for my Dad’s cellular company. At the concert I heard a lady behind me say “Johnny can’t hit the high notes anymore (did Johnny ever hit a high note?) and the band doesn’t sound like they use to”; being a HUGE Cash fan I’d didn’t know if I should explain to her that he’s in his mid 60’s or just scream at her to shut up. This LTS is about the same; the brokerage industry is dying a slow death as the majors are all doing trades for free (there are no longer “high” notes, most internet/electronic brokers are taking billions each day from “old” brokerage firms and just how can independent brokers compete for an ever shrinking full service industry or and their valued clients being offered free trading (impossible to compete with free).
                    Enormous never ending debt, lack of liquidity and being over leveraged basically killed the banking and brokerage industry in 2008/2009 and Uncle Sam flooded the world with more fiat greenbacks. The lifeline that Advisor is giving Ladenburg should be a sign to run away from the old brokerages. I don’t think the likes of Ladenburg and Advisor Group will stop the intense leverage until the public refuses to lend them more dollars.
                    Debt kills the best of corporations, Nomad

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