BOFI Buy or Sell

I understand some people are nervous with these huge moves in BOFI lately, but after listen to the call and looking at the NYT articles and former audit suit, this is my takeaway.

  • I know people have compared this to LL and other companies that were guilty of some wrong doing, but it’s important to remember that unlike LL, no government agencies is make any of these accusations or claims, this is coming from a civil suit (not a criminal one) from a former disgruntled employee.

  • I thought the CEO did very well in the conference call, yes it was obvious he was upset, but I would be as well and I personally liked frankness of his responses and the way he immediately scheduled the conference to address the issue, his conference call responses to the lawsuit led to upgrades from a couple of analysts regarding the stock the following day.

-So far there has been zero proof other then the allegations of a former employee, even after the OCC has reviewed the company and approved it’s HR Block deal.

  • I would love to see BOFI file a countersuit to Ernhart for these allegations, hopefully they are working on it and the CEO buy stock after the blackout period ends (on the conference call, the CEO said he would definitely buy the stock right now, knowing about the blowout quarter they are going to have, but because of blackout rules he cannot buy any right now)

  • Remember, similar accusations occurred few months ago and knocked the price down to about this level (also starting with an article from the new york times), after the dust settled the stock rose made new highs, before the latest attack

  • I have added to my position, I have owned the stock for a while and management has performed excellently at running the business and until some actual evidence (not just hearsay from a former disgruntled employee), I will give management the benefit of the doubt


I was wondering what was being said about BOFI. It is 4.41 percent of my holding after the drop. It is at the moment my 9th largest position. I read the transcript. For investors this is a mind set challenge. At this point in time I have not plans to sell. Will be interesting to see it unfold over the next few quarters. I am happy with the position I have. I have made three purchases over time with 197%, 16% and 9% increase taking into account the current price drop. Noel

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