Are Oxbridge Re’s 42% Returns Too Good to Be True? Nope — They’re Even Better, and They’re About to 10x Shareholder Value, Too!

Sometimes when something seems too good to be true, it is. But sometimes, on a rare special occasion, what at first seemed too good to be true turns out to be way better than you expected.

That’s exactly what happened a couple of days ago when Oxbridge Re [NASDAQ: OXBR] dropped this beauty of a press release on us. To save you from clicking the link, here’s the title, which pretty much says it all:

Oxbridge Re’s RWA Subsidiary SurancePlus reports 49% Realized return on its 2023/24 DeltaCat Re Tokenized Reinsurance Securities

Now, as for the part where I was just talking about things turning out better than expected, that’s there for a reason. I only just covered Oxbridge and its SurancePlus subsidiary a few days ago when looking at the boom in tokenized Real World Assets.

At the time, SurancePlus was advertising an expected 42% return on its 2023/24 DeltaCat Re tokenized reinsurance securities. And, when I first read that, my gut reaction was “Nah, not possible — that’s too good to be true.”

Then I took a closer look and finally came to the conclusion that it was true, just with a few caveats. Specifically…… actually, let’s not get into that here. I’ve got something much more juicy I want to cover instead. (PS: Here’s a link to the original article on SurancePlus’s tokenized reinsurance contracts if you want the caveats in all their gory details.)

What I really want to get into here is something else I only mentioned in passing last time ‘round — this press release.

Oxbridge Re to Evaluate Strategic Alternatives

Yeah, Yeah, I know the title’s kinda boring. That’s IR types for you. But I’m no IR professional, so let me translate that title into something a little more meaningful for you.

Oxbridge Re to 10x Shareholder Value

Now, like I said, I’m no IR pro. That means I don’t have accountants and lawyers breathing down my neck. And that means that title might no be 100% accurate. Maybe that 10x in shareholder value might be more like 8x, or 15x… or even more.

Who knows?

The only thing I do know is that, if my spidey senses are serving me well (they usually do), then that 10x is a damn reasonable estimate.

Here, let me explain.

How Oxbridge Re Is About to 10x Shareholder Value

For those who didn’t read the first article, let’s make one thing abundantly clear right off the bat — Oxbridge Re [NASDAQ: OXBR] is a massively undervalued company.

Now, this might come as news to some observers. After all, if we were to value Oxbridge based on what it is at face value — a stodgy old reinsurance firm — then its current valuation (about $14 million) probably isn’t too far off the money.

Maybe a little on the low side, but not by 10x.

But here’s the thing. There’s something huge that investors have been sleeping on that does warrant a 10x in its valuation — its SurancePlus subsidiary.

Of course, to be 100% fair here, this isn’t so much the fault of investors. Instead, I’m placing 100% of the blame Oxbridge Re. Quite simply, they haven’t communicated enough about the opportunity.

To see what I mean, let’s take a look at their last 18 months of press releases. Wanna know how many times the word SurancePlus appeared in the title?

Excluding this week, they’ve only mentioned it three times.

Once to announce they were launching it.

Once to announce they were launching a public offering of tokens.

And then one more time to announce they were closing the offering.

That’s it. And each time was without fanfare.

Oh, and then there was that other press release about Oxbridge Re being a Web3-focused company. But I can totally forgive investors for not thinking much of that. After all, just about every company is an “AI/Web3/insert buzzword”-focussed company these days. And most of them have zero substance behind the buzzword-laden headlines.

Oxbridge Re is different, though.

To see what I mean, let’s recap a little bit of what we covered last time around when we looked at its SurancePlus subsidiary.

• Right now, the tokenization of Real World Assets (RWAs) is making major waves in institutional finance.
• For example, BlackRock [NYSE: BLK] is on track to tokenize $10 trillion (yes, trillion, as in 10 followed by 12 zeros) worth of RWAs. Other major institutions are also deep into the tokenization game. HSBC [NYSE: HSBC] is one (tokenized gold).
• This is driving massive valuations for pure-play tokenization startups. For example, Nayms and Re, two startups in a similar space to SurancePlus (reinsurance tokens), were recently valued at $80 million and $100 million despite both being in extremely early stages of development.
• SurancePlus is already well ahead of both startups and it has already delivered major value to its first round of token investors (remember that 49% return from before? That was SurancePlus).
• However, SurancePlus is a mere subsidiary of Oxbridge Re — a “boring” old reinsurance company (who has failed to give the proper coverage to SurancePlus). This has led to investors sleeping on just how big all the SurancePlus goodness going on behind the scenes is.

Long story short, it’s time Oxbridge Re did something about the situation, which is precisely what it did with its “Oxbridge Re to Evaluate Strategic Alternatives” press release — it kicked off the process of getting its shareholders the true value they deserve.

Now, as for how Oxbridge Re’s ‘strategic reevaluation’ will boost shareholder value, that comes down to the details it dropped in the press release.

More precisely, Oxbridge Re is evaluating the possibility of either a “sale, spinout, merger, divestiture, recapitalization, [or] other strategic transactions” for its SurancePlus subsidiary.

The net result of such a move will be that the broader investing community will be forced to properly evaluate Oxbridge Re for what it really is — the company behind one of the fastest-growing beasts in the booming RWA tokenization space (SurancePlus).

That’s the sort of company that easily fetches a nine-figure valuation in today’s market.

What Comes Next?

What comes next is simple. The kids these days would describe it as “to the moon” or “line goes up”.

With that said, just like last time around when we looked at SurancePlus’s reinsurance tokens, there are some caveats to add here.

First Caveat

First, Oxbridge Re was quite clear in its PR that it “cannot assure that its evaluation will result in the Company and/or its subsidiaries pursuing a transaction.”

But guess what?

In the same sentence, it also said that it can’t guarantee “that any transaction, if pursued, will be completed on attractive terms.”

Now, if you want my take on this, that’s the sort of “better safe than sorry” drivel IR folks write while the lawyers are peeking over their shoulders.

I mean, why would a company pursue a transaction on unattractive terms?

Exactly.

Basically, that whole spiel was just the result of the lawyer’s brain ticking over going “what if, what if, what if… serial killers… force majeur…” and trying to disclaim every possibility (no matter how unlikely it might be).

In other words, a transaction of some sort is probably going ahead.

And when it does, you can bet your finest pair of white cotton socks that it will be on damn good terms.

Like so damn good that I’m totally expecting something on the order of a 10x in shareholder value once investors have time to digest it.

Second Caveat

As for the second caveat — that’s just the old “it’s impossible to time the market” one.

First, Oxbridge Re gave no indication about what timeline it’s ‘strategically reevaluating’ on. It could be one month. It could be six.

Second, following any announcement, it will take the market time to react, so timing that’s going to be hard, too.

Still, the word “hard” never turned me off, so I’m gonna take a crack at giving you some timings.

How Long Will Oxbridge Re Take to ‘Strategically Reevaluate’ its SurancePlus Subsidiary?

As a guess, Oxbridge Re will probably reach some sort of final decision not long after it closes its next SurancePlus token offering — the EpsilonCat Re tokenized reinsurance securities.

FYI, that’s a $10 million offering — twice the size of its 2023/24 DeltaCat Re tokens.

If it can successfully close that offering, Oxbridge Re will effectively have an ace up its sleeve when it comes time to securing favorable terms on any SurancePlus spin-out/sale/etc. After all, if proving there’s exponentially-growing demand for your product doesn’t prove you’re onto something big, then I don’t know what does.

How Long Will the Market Take to React?

This one’s a little harder to predict. The only prediction I’m willing to make is that the market will react fast on one condition. That condition is that Oxbridge Re gets its IR folks working to give the SurancePlus story the airtime it deserves.

If that doesn’t happen, then expect the Oxbridge Re 10x story to play out over the course of weeks, if not months — the first few investors who stumble into it will likely keep quiet at first as they buy up Oxbridge Re shares at a massive discount.

Then, once they’re done, they’ll tell their friends, who will do the same.

The snowball effect will grow and, eventually, all the chumps with their market screeners will get an alert, at which point they’ll ask themselves, “What the heck is going on here?”

The first to react will get a nice easy win.

The rest will live to regret the one that got away.

__

(Featured image by RDNE Stock project via Pexels)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions, including with regards to potential earnings in the Empire Flippers affiliate program. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.