Aug. 19
Shares of Shift4 jumped about 12% last week, closing Friday at $81.49. In early trading Monday, they gained another 35 cents as of 5:51 a.m.
I checked on what could have caused the increase, keeping in mind that shares in the Upper Saucon Township, Lehigh County, company are a bit volatile. The company (NYSE: FOUR) is growing, and earlier this year sought bidders. Nobody offered enough to buy the company founded in 1999 by then-16-year-old Jared Isaacman. The founder is also the CEO.
Shift4 processes payments for hotels, restaurants, stadiums and other venues.
It is an interesting company, but I did not expect my research to lead me to “The Big Short,” the 2015 movie about the 2008 financial crisis.
Back to Shift4:
On Wednesday, the company reached a deal to handle sales at Gainbridge Fieldhouse, home of the Indiana Pacers of the National Basketball Association. That’s a good deal for Shift4, but they secure a lot of similar agreements without a short-term share boost.
Shift4 also announced the sale of $1.1 billion in debt due 2032. That money will go toward retiring some existing debt, general needs, stock buybacks, acquisitions and other general corporate needs. That wouldn’t explain the big jump either.
Then I turned up something reported by Guru Focus Research: Michael Burry, the physician who became an investment manager, acquired 100,000 shares of Shift4.
Here’s their story:
And here is the information table from the SEC filing from Burry’s Scion Asset:
The above shows 100,000 shares acquired for $7.335 million. That is not a huge stake, considering that Shift4’s market capitalization is $7.2 billion, but a lot of people follow what Burry does.
He is the investor who saw a bubble in the U.S. housing market, and found a way to bet against it, making lots of money after the 2008 crash.
Burry was portrayed in “The Big Short” by Christian Bale. Among other big names in the film were Steve Carrell, Brad Pitt, Ryan Gosling and Marisa Tomei.
It’s a great film, but IMHO, “Margin Call” is the best film about the big crash. It’s a gem.
Anyway, those who follow Burry may have jumped in and acquired some Shift4 shares too. It’s not necessarily the entire answer, but maybe part of a puzzle.
As noted above, Shift4 shares move a lot (the company has a beta — a measurement of volatility versus the market) of 1.62. Any beta above 1.0 shows that a company’s share price moves more than the market.
Procter & Gamble, maker of household products, has a beta of 0.40, meaning they move less than the market. That makes sense for its size and market, and its products (Bounty paper towels, Dawn dishwashing detergent, etc.) may be essential but they aren’t particularly exciting.
Anyway, the Burry buying does not necessarily explain all of the recent Shift4 move, but when an investor with his track record acts, people listen.
Shift4 Payments, ticker symbol FOUR: keep an eye on it. There are only three New York Stock Exchange-based companies in the Lehigh Valley. The other two are Air Products and PPL, but Shift4 is worth watching.
Lehigh Valley News Briefs 