Urbana Corporation – massive discount!

Urbana Corporation was previously discussed on this site (here).

This week URB announced a Share buyback plan to buyback up to 10% of all publicly traded shares and confirmed that they bought back 99% of the previously approved buyback program.  In 2 years, they may have purchased over 20% of the available shares!  That is an incredible buyback.

I hear you thinking : why?  If you check the net asset value of URB, you will find out that they publish weekly updates on their net asset value here.  URB is a corporation acting like a fund.  They have no proper business except investing in other businesses.  They actually own major exchanges shares like NYSE.  They also own private exchanges shares not available to the public.

If you calculate the value per share of the net assets you will find that they have :

1.27$ in publicly traded shares at market value
0.54$ in private placements (private markets)
(0.18)$ in debt (leverage)
0.01$ in other assets

What is the current market price for Urbana Corporation ? 1$

You get a discount (9%) on net asset value, even excluding private equity placements and including debt.  If you include private equity you get a gigantic discount of 63%!!!  I cannot properly value those private placements so I’ll include them at 50% estimated value (it is tough to sell).  With that calculation you get a 36% discount at the current price.  Urbana management is well placed to value the current private equity values and probably find that a 36 to 63% discount is hell of a deal!

Oh, and by the way, the manager (Thomas Caldwell) owns 43% of the voting shares.  He’s in with us for at least 4.3M $!

Author has a position in URB and URB.A.

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Posted in URB
3 comments on “Urbana Corporation – massive discount!
  1. EmpCod says:

    I’ve initiated a small position @ 0.89 (an even deeper discount !!). A closed-end fund way under NAV with a share buyback kicker… Sounded too good to pass.

    Seems like a no brainer for someone looking for exposure to shares of global stock exchanges. Not only you get the deep discount on the shares themselves because the market is depressed, but you get them at an extra 50% discount…

    Thank you Mr. Market…

    • Dominic Nadeau says:

      I’ve tried to increase my position but didn’t hit at .89. I’ll try again! 🙂

  2. […] Hopefully, URB reports net asset value per share weekly on their web site.  You may find them here.  While the share is currently undervalued by over 75%, this is not the objective of this article.  We’ve already built the case here. […]

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