Blue Horseshoe Loves Steel Partners Holdings LPDecember 8, 2014 | By: Sean Murray
Blue Horseshoe loves
Anacott Steel Partners Holdings L.P.
In the next two weeks both Lending Club and OnDeck will both be listed on the New York Stock Exchange. Industry insiders have been talking about it for months and some folks are even getting in on the IPO stock.
But there might just be another way to get in through a little known publicly traded metal materials holdings company named Steel Partners L.P. (SPLP).
SPLP owns WebBank, the Utah state-chartered industrial bank that is integral to companies such as Lending Club, CAN Capital, Prosper, AvantCredit and PayPal to make loans. All five of those companies are soaring. CAN Capital is already rumored to be working on an IPO of their own and AvantCredit just announced a capital raise of $225 million last week.
In order for today’s big technology lenders to work around outside state lending laws, they usually require a partnership with a chartered bank in order to export interest rate caps and laws. To accommodate this, WebBank issues the loans and then sells them to Lending Club (or Prosper etc.) two to five days later.
Lending Club has generated $6 billion in loans since inception, Prosper has generated more than $2 billion, and CAN more than $4 billion.
WebBank stands to gain from increased fees as the alternative lending market heats up.
But there’s a catch. WebBank only makes up little more than 4% of SPLP’s total consolidated revenue. Listed in their nine month 2014 P&L under Financial Services, WebBank brought in nearly $24.3 million in revenue.
The Financial Services designation and WebBank percentage were verified through a 10-k filing that stated such.
SPLP’s wholly owned subsidiary, WebFinancial Holding Corporation, conducts financial operations through its wholly-owned subsidiary, WebBank (“WebBank”). WebBank is part of our Financial Services segment. For the years ended December 31, 2013 , 2012 and 2011 the Financial Services segment had revenues of $28,185,000, $21,155,000 and $14,921,000 respectively, which comprised 4%, 3% and 2% of SPLP’s consolidated revenues, respectively.
A red herring?
WebBank not only has the highest profit margin out of all the consolidated company’s sectors, but is also the second most profitable business by dollars that SPLP is in.
Energy by contrast made up 21.3% of SPLP’s revenues for the first nine months but yielded less profit than WebBank.
SPLP might be comprised of steel, energy, and a wide array of other diversified products, but WebBank is a special gem. On $30.3 million in profit, WebBank was responsible for half of that.
All was quiet in Steel land until November 4th, two days before the last earnings report when the stock made a rapid ascent.
Is Steel Partners Holdings L.P. in play??????? You didn’t hear it from me…
Note: I do not own SPLP stock.
Sean Murray is the founder of deBanked, a 10-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.