Most investors are aware the initial PPP passed in 2020. Consequently, they were well-positioned to help Hispanic business owners and entrepreneurs who had been financially harmed by the results of the Covid-19 pandemic. The 2021 PPP and CRSSĪs noted, CFP is a CDFI which supports Hispanic homeownership. I believe shares are still undervalued because of the one-time benefit to CRSS as a leading participant in assisting people in need to receive (mostly forgivable) loans through the 2021 PPP, as I will discuss below. As of the close on Wednesday, May 19, shares were valued at $45.98. Since that time, CRSS shares shot from sub-$10/share to a high of $58.30/share. This is important to know because in early April, the Federal Small Business Administration (SBA) released its report of the 2021 PPP program through April 4, 2021, the first time that CPF appeared in the updated report, as the #6 lender in terms of net dollars loaned. CPF was acquired by CRSS on December 19, 2017.Īs of March 31, 2021, CRSS was valued by the market at approximately $58.5M. CRSS’s subsidiary, Capital Plus Financial (CPF), based in Dallas, TX, is a certified Community Development Financial Institution (CDFI) and certified B-Corp which supports Hispanic homeownership with a long term, fixed-rate single-family mortgage product. Company BackgroundĬRSS is a holding company focused on investing in businesses that promote economic vitality and community development. So this one-time windfall should be a huge boost for the company’s shares, a majority of which are insider-owned, leading me to believe CRSS will handle this jackpot in a shareholder-friendly manner.īelow I will give a very brief introduction to CRSS, and will spend time familiarizing readers with the 2021 PPP process and why I believe shares should be valued at $64-77/share, and will quickly rise to that level once CRSS publicly announces its own expectations, likely in early June. For perspective, prior to the market starting to figure out this situation, CRSS was valued at about $58.5M. My research indicates that CRSS will be a huge beneficiary from the 2021 Paycheck Protection Program (PPP), to the tune of at least $386M, according to my calculations that I will share in more detail below. While it is not without risks, which I will discuss below, I believe the situation is attractive enough for risk-tolerant investors to at least take a speculative position in the company, CRSS.
BLUE ACORN CAPITAL PLUS FINANCIAL UPDATE
( CRSS) will publicly update investors on this situation in mid-June, since that is when they released their Q2 financial results last year. In short, this one-time investment opportunity, if I am correct, could lead to a 40-67% return within a month or so, as I imagine Crossroads Systems, Inc. The investment idea I present here, I believe, is one of those opportunities: where something that sounds too good to be true is actually true!
Sometimes something that sounds too good to be true, is actually true. However, note the actual saying, and how the word “probably” hedges the bet. There’s an old saying: “If it sounds too good to be true, it probably is.” I have normally found that adage to be wise and worth following, and it has helped me avoid numerous mistakes in investing (I make plenty of other mistakes regardless!).
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