Payment Protection Program -- P.P.P. (Yeah You Know Me)

PPP Remix:

Harm me with harmony
Dave drop a load on 'em
PPP, how can I explain it
I'll take you frame by frame it

To have why'all jumpin' shall we singin' it
P is for Payment, P is for Protection scratchin' temple
The last P...well...that's not that simple (uhh Program)

Who’s down with PPP, well it seems like everyone. Almost a month ago I wrote about the first stimulus package that was released.  In that package $350 BILLION was laid out for small businesses. So I turned up Naughty By Nature O.P.P. and started filling out the application. But to my surprise, my regional bank wrote back a few days later telling me all the funds in the program were gone and I’d have to wait and see if the program would ever be renewed. The question at the top of my mind is how in the hell did $350 Billion run out that quick. This is for small businesses, the backbone of our country, and it’s only covering two months of salary, rent, utilities, etc. Well I found out these snakes may be the reason (Company, Millions of Dollars Loaned):

Ø  Shake Shack $10M

Ø  Ruth Chris $20M

Ø  Fiesta Restaurant $10M

Ø  Quantum Corp. $10M

Ø  Potbelly $10M

Ø  J. Alexander’s Holdings $15.1M

Ø  Hallador Energy $10M

Ø  ZAGG $9.4M

 The interesting thing about the list here is I am only calling out the publicly traded companies on stock market exchanges. I’m not knocking these companies for taking advantage of a good situation BUT seriously if you’re stock trades publicly your kinda a big deal. And it means you have access to funds in ways I DO NOT. You can issue stock, access lines of credit, chat with private equity funds, etc. But wait there’s more -- there are over 75 public companies that decided to stiff it to small businesses. I seriously can’t support these companies in the future because in a time where everyone is hurting if you can't avoid gaming the system for once…then damn that more gangsta then my boys from the Sopranos or the Wire. Thanks to Morgan Stanley for searching thru public company filing records and compiling a list. And this means we don’t even know how many non-public companies of similar size are doing the same thing.   Here is a bigger list of inconsiderate #$*#*@:

Source: Morgan Stanley, public company records

Small businesses trying to stay afloat keep your head up. If you are an independent contractor, sole proprietor or true small business (LLC, S Corp, Corp, Partnership) head to the SBA website and sign up.

SBA Loan Program: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

Keep On Pushing - Q2 Market Outlook Amid Coronavirus Pandemic

With Quarter 1 2020 in the books, I wanted to capture a few of the headlines coming across my screen that I'm paying close attention too:

What you Should Know:

1. Unemployment numbers are on the rise
2. The Federal Reserve is printing money an unprecedented levels - rates have lowered as they help unfreeze the mortgage markets
3. Shelter-In Place is sparking a rise in internet companies
4. Deals are being lost but the big ones are going through
5. SBA Loan Details

Jobs Number:
- A record 3.3 million Americans applied for unemployment benefits last week (Labor Department).  Last week saw the biggest jump in new jobless claims in history, surpassing the record of 695,000 set in 1982. Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April.

Interest Rates:

- 30 Year Mortgage are at lowest levels of: 3.4%

- Mortgage Applications up 15.3% 

- Refinance up 26%

Note: One company said they received 8K refinance requests day

Investment Themes:

Invest in Internet Related Companies:

- Match Group disclosed that Tinder interactions are up. But it is not resulting in a large number of  new customer adds just yet

- Zoom Media (NASDAQ: ZM) is winning the marketing war. Everyone thinks Zoom and Slack (NYSE: WORK) are the only telework software out there. There are many but Microsoft Teams (Microsoft: MSFT), Go To Meeting, are go to collaboration and communication tools.

- Also cyber security software is in high demand. To help my client with the Coronavirus crisis, I manned the call support line and took calls from all over the world for the first time in my life. Every major client was working remote and more importantly I listened to the name of the software being used: Zscaler and many remote authentication and identity management tools are needed NOW more than ever.

Deal or No Deal

Madison Square Garden (NYSE: MSG)  – The owner of the NY Knicks just recently spun off their restaurants business. Hmmm I think someone may be separating the good assets from the bad assets.

Xerox (NYSE: X) – Some Mergers are no longer being pursued. HP is no longer being courted by Xerox.

Sprint (now merged under T-Mobile TMUS) - Some Mergers were pushed through. One of my biggest wins was Sprint and this deal closed today!!! T-Mobile required their 16 banking partners to come through with the funding --- Deal Closed

Helicopter Money - The last line of defense for the capital system under stress is to bail everyone out. I sh!t you not in economics its called the helicopter money strategy. Well for anyone looking to get a Small Business Loan, I captured some of the details here:

SBA Loan Details:

• Small Business Administration (SBA) Loans are available beginning Friday
• All existing SBA-certified lenders are eligible
• All FDIC-insured banks and Credit Unions are eligible
• The SBA is developing a portal for borrowers without existing relationships to find local lenders

      SBA Loan Terms:

• 0.5 interest rate with 2- year term
• Payments are being deferred for 6 months
• Partial or full loan forgiveness avail depending on layoffs (not happening) and certain qualified expenses
• The loans are 100% guaranteed by SBA
• The loans are administered by individual lenders