Why I am Selling Thornburg Mortgage 42 comments
-
Font Size:
-
Print
- TweetThis
I am closing my very ill advised venture into Thornburg Mortgage (TMA), far and away my biggest loser in the fund. My goal here was to play the refinancing boom (and the "early cycle" rebound) but timing is everything and Thornburg was a victim of a run on the bank similar to Bear Stearns (BSC), far worse companies did not suffer what Thornburg did.
At the time I wanted to find some alternative ways to benefit when the market went to its "early cycle" Kool Aid without buying homebuilders directly - but my choice of stock could not have been worse. Since then, I've decided to just play the homebuilders themselves which is ironic since I think they are in far worse shape than Thornburg was, but the market is the ultimate decider. I was hoping for some buyout offer maybe in the $3-$4 range, but Thornburg just decided to dilute shareholders to the ultimate degree to survive - I don't blame them; they appear to have very good management and just are victims of circumstance and bad timing this time around, so shareholders lose.
Since the fund is doing very well this is as good as time as any to get this $25K loss off the balance sheet and "book it Danno!" I've been cleaning out quite a few positions of late whose charts have been weak (not participating in this rebound) and I did not feel any conviction in adding to, and this one fits the bill. I am selling my remaining 0.4% stake in Thornburg Mortgage in the $1.20s.Disclosure: No Positions.
Related Articles
|
Find People on SA
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largest
increase in followers
in the last 7 days-
1
David Fry
-
2
Philip Davis
-
3
Tyler Durden
-
4
Bill Gross
-
5
Peter Schiff
Fastest Climbers » -
1
-
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 42 comments:
He has ruined our countries economy not banks.
I agree the company was done in by market over reaction and hope the company can survive. I think it will take several years for the current dilution to be overcome and the stock to be a good investment again.
1. Management was not giving the public enough information to make a fair estimate of what the balance sheet looked like after selling assets at a discount, e.g. they did not tell me how much discount from their basis they sold assets.
2. After the big fall last summer, TMA increased repos instead of substituting long term liabilities. Contrast TMA with Redwood Trust which has almost no short term debt and has deleveraged for the last several years.
Looks like poor management.
Roger Scott
I am an extreme bottom feeder. I try for the same bounce potential at a lower price, but it's a daily torment not keep holding off. And with that waiting game I also get the pain of seeing many stocks that's were near the bottom, near but not at my price point rebould dramatically.
I bought into TMA at 1.59. Clearly the volitility is gone now.
The best hopes I see are for a stockholder suit, ala Bear Sterns. Like it or not, good management or not, the assets belong to the stock holders, and the choice to let the company (and jobs) survive is uniquely and exclusively the shareholders, not the management. Diluting the stock to keep the jobs may have served the employees, maybe averted bankruptcy, but was not in the best interest of the shareholders.
I expect, as a result of litigation over the next year, that prior shareholders will have to have the right to buy, as new the new money investors have, up to 5x my number of shares at 1Cent.
My bet is that reverse dilution will occur, so am holding for the long run.
Many nights I have lost sleep over my investment in TMA, but last night was different. In my anticipation of “Dilution Day”, I woke up in the night, and an alarming thought occurred to me: At the rate everyone else is bailing, and at the rate I am buying, I will be the only one left holding any of the old common shares. If this trend continues, I could end up owning 5.5% of the company all by my lonesome. Maybe I can get a seat on the board next to Dick (Rainwater) and all the other big investors. Wait a minute, was I really awake or was I just dreaming the impossible dream? It seemed so real, and it was in techicolor! ~ TGIF~
Disclosure: Longer TMA than anybody else
RIGHT ON FRALEY1, THANX FOR RUINING OUR GREAT COUNTRY BUSH YOU IDIOT!!!!!!!!
Goldstone makes it clear that there are basically two options at this juncture:
FIRST OPTION: “If everybody cooperates,……. THERE IS SIGNIFICANT UPSIDE FOR INVESTORS, based upon where TMA is today, and certainly better than where TMA would have been had the company not raised the new capital.”
SECOND OPTION: “If they DON’T cooperate and participate and if they DON’T authorize and tender what TMA needs to have done, then, in fact, THE RETURNS THAT THEY’RE GOING TO BE ABLE TO EXPERIENCE ARE GOING TO BE GREATLY DIMINSHED OVER TIME."
This sounds plain and simple so why not go along with it? If you are one of the common shareholders who does not approve the vote to increase the authorized number of shares OR if you are one of the preferred stockholders who does not wish to tender your preferred shares… then I ask WHY NOT? I would like to know WHAT IS THE ALTERNATIVE? Some here want to argue against the deal, yet they do not offer a feasible, attractive alternative. So what specifically do those in opposition propose? I would like to hear of such an alternative proposal.
All these accounting figures/calculations being tossed around are indeed impressive, but how reliable is this data? Who knows? I am more inclined to go with what I know for a fact, and in this case the management of Thornburg Mortgage says it needs the cooperation and participation of the shareholders in order to recover and continue its operations. Why on earth would any competent shareholder invested in TMA choose not to support the company in which he/she has invested, especially when the only OTHER apparent choice is slim to none?
Bush is to blame? What an idiot remark. Pull yourself up by your bootstraps and except your blundering.
What do you think President Bush has done for the economy?
On Apr 12 09:55 PM jackooo wrote:
> ridedan2, Fraley1
> Bush is to blame? What an idiot remark. Pull yourself up by your
> bootstraps and except your blundering.
The Answer to your question: "Why on earth would any competent shareholder invested in TMA choose not to support the company in which he/she has invested, especially when the only OTHER apparent choice is merely a chance of slim to none?" is because Goldstone & Company has sold out the share holders with a 16 to 1 stock dilution. They have sold their soul to the new investors and thrown the commons overboard.
I had 5000 shares, sold 2000 and still hold 3000 shares. I am holding my 3000 shares because I have very little more to lose percentagewise and I want to stay in the game in the event that there is any legal hurdles ahead.
Last time I checked, a 16 to 1 stock dilution made without getting the share holders approval is called stealing on a grand larceny scale. If TMA can get away with this and steal from the common shareholders then they deserve to go bankrupt. If it happens I will cellebrate.
I will trow your comment back to you. What has Bush done to cause this mess? Don't geve me the war crap....
Since I thought I knew this firm, and think the drag is more what other firms/people did, when is a good time (if any) to get back into this stock ? This board seems to have some pretty intelligent people (exception of bush's fault they invested, etc.), what are your thoughts ? Thanks...
I emailed the company when they began to get all the unprecedented margin calls and told them that my family was praying for them to get funding to avoid bkcy. I am not sure why they were targeted to take a fall, when there are others in worse shape, but someday it may all come out.
Until then, I am with them all the way, and adding. We are retired and need our dividends and money too, but the insiders are way worse off than we are. I'm nieve enough to believe there are still good people in the world, and justice will prevail.
No need to blame our president or anyone else, does no good anyhow. I will add when the chart turns up, and the sellers are done.
Allow my thoughts on FBR...they are a horse of a different color. How can a company be allowed to give upgrades/downgrades to other companies when they can't properly manage their own. They are the ones that should be ashamed.
Trims
And yes i love love the solar stocks.
with oil over 100 solar
has to be on its way up up up.
Everyone blaming bush yes but who
the h--- voted him in not once but twice.
The people out there did so how can we
complain.
not me i didn't do it
Read your comment and loved it. Evidently, your prayers were answered. Please keep praying as we are too.
On Apr 14 04:49 PM Trims wrote:
> I purchased my shares, as I often do, at the time of insider buying,
> and at their prices; then watched carefully for them to sell, which
> they never did.
>
> I emailed the company when they began to get all the unprecedented
> margin calls and told them that my family was praying for them to
> get funding to avoid bkcy. I am not sure why they were targeted to
> take a fall, when there are others in worse shape, but someday it
> may all come out.
>
> Until then, I am with them all the way, and adding. We are retired
> and need our dividends and money too, but the insiders are way worse
> off than we are. I'm nieve enough to believe there are still good
> people in the world, and justice will prevail.
>
> No need to blame our president or anyone else, does no good anyhow.
> I will add when the chart turns up, and the sellers are done. <br/>
>
> Allow my thoughts on FBR...they are a horse of a different color.
> How can a company be allowed to give upgrades/downgrades to other
> companies when they can't properly manage their own. They are the
> ones that should be ashamed.
> Trims
Yes, I would like to see TMA come back as a viable company worthy of investment, and maybe it will someday. Unfortuneatly, the current bailout-investors that have a 7 year strangle hold on the company make that possibility very remote indeed, at least in the near term.
This is a story about a company that the more you learn about, the worse it gets. ie, with the 12% interest not enough for the scalpers, they also got handed to them 2.75 billion shares for $.01 each. At the same time the value of the current common shares are being diluted 1600%. Anyway you spin it, this spells disaster for TMA for a very long time, as not many investors will be attracted to buy shares in a company in such financial straights.
After dilution takes place and the stock price drops to a few pennies, they (the scalpers) will own 94.5% of the stock, then they will be selling at every uptick thus holding down the stock and raking in millions at every sale. For the scalpers this is just too good a deal and they are laughing at us poor schmucks who are the victims of there greed.
It makes you wonder what kind of a deal they offered the CEO Goldstone on the side that would make him aggree to accept such a horrendous price for the bailout. I wouldn't be a bit surprized if the CEO will also get a few million shares at .01 each (under the table of course) so he can recoup his recent losses in the millions. Meanwhile the commons get the proverbial shaft.
It's sad story but that's the way I see it. Like I said, I'm going to hang around with my 3000 sad shares and hope for some legal redress (in the form of a class action suit) that will probably never come, but you never know what is lurking out there.
I feel the pain of all the shareholders that thought they were investing in a well managed company but were in fact leveraged to the hilt so they couldn't ride out an economic downturn. They were caught in this debaucle and sold down the river. while others profited handsomely indeed.
If it is the president that is receiving the blame for market failure, shouldn’t Bush get some credit for the stock market boom following the era of corporate scandals, tech bubble collapse, post 9-11 market volatility, airline industry problems?
Blame bush now as much as you can, as 01/21/09 will come and you’ll have to blame no one but yourself.
You are aware that there are some five or so class action suits from last summer against TMA (I assume they are pending as I haven't heard otherwise). The class action is on behalf of all persons who purchased TMA common stock between October 6, 2005 and August 17, 2007 inclusive to recover damages caused by defendants' violation of the federal securities laws.
On Apr 15 04:52 PM Thrown to the Wolves wrote:
> Dulcinea,
> It's sad story but that's the way I see it. Like I said, I'm going
> to hang around with my 3000 sad shares and hope for some legal redress
> (in the form of a class action suit) that will probably never come,
> but you never know what is lurking out there.
>
Now that you mention it, I do recall that there was a pending class action suit in process of which some of my shares fall into. I don't recall the specifics of the issues or what federal laws were involved.
Thanks for reminding me. I had forgotten about it.
On Apr 16 03:33 PM Thrown to the Wolves wrote:
> Dulcinea,
>
> Now that you mention it, I do recall that there was a pending class
> action suit in process of which some of my shares fall into. I don't
> recall the specifics of the issues or what federal laws were involved.
>
>
> Thanks for reminding me. I had forgotten about it.
On Apr 16 06:01 PM On the fence wrote:
> Does anyone know how many warrants per preferred share will be issued
> if the plan is approved by stockholders?
EMAIL: ir@thornburgmortgage.c...
PHONE: 888-898-8698
My Email to Thornburg Mortgage:
I have been attempting to obtain accurate, current investor information from your web site, and I have been unable to achieve satisfactory results. Your investor relations portion of your web site seems to be lacking in the type of info that shareholders need, in particularly now and due to the current dire financial straits Thornburg Mortgage has fallen victim to. For instance, your Calendar of Events link only provides data for the year 2006. I can not determine when your next quarterly report will be issued nor when your next shareholder meeting will be held so that I might gain more reliable info. It is frustrating to say the least, especially when I currently own shares of your rapidly diluting common stock. I tried calling your company office, and I my call was forwarded to someone named Bryan/Brian… I left a voicemail, but my call was never returned. Your company does not give the appearance of caring or catering to the needs of the old loyal shareholders. Many small investors I have spoken with are hurt and angry by this fact. It is for this reason alone that I would seriously consider selling my shares of TMA if I were not at risk of loosing a sizable fortune. Therefore, I must ask, do you folks care at all about your old shareholders? The talk on the street is that TMA management cares only about themselves and that you are selling your old shareholders out. I do not want to believe this rumor, but it is hard to dispute at this juncture. I want to trust and believe in the company of Thornburg Mortgage as I do own a meager portion of it. Any suggestions for a very concerned shareholder would be appreciated. AND please do not resort to your standard form-letter response... I believe I deserve better than that.
I assure you, management does care very much. Promise. As you may be aware, though the management team is out of money, and will probably be out of work in short order. What would you like for your loyalty? I'm stumped. To be frank, you gambled, you lost. Its that simple. The class action suits ought to get you a few pennies on the dollar,
Guess what?
GAME OVER :)
Kindest regards,
Rose