Seeking Alpha

New York Mortgage Trust with 13M share secondary

  • The underwriter greenshoe option is for 1.95M shares. Together with the 13M share offering, it could boost the float by about 23%.
  • NYMT -3% AH
  • Source: Press Release
Comments (7)
  • tommays1@aol.com
    , contributor
    Comments (5) | Send Message
     
    Not that big of a deal. The stock will adjust and then advance on the newer revenue.
    1 Apr 2014, 04:17 PM Reply Like
  • nthurster
    , contributor
    Comments (29) | Send Message
     
    I read somewhere that when mREITs issue more stock at a price above book value, it is generally accretive to shareholders.... especially if the proceeds are used to generate more revenue and proportionate earnings.

     

    Any other opinions on this offering?
    1 Apr 2014, 04:26 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (2459) | Send Message
     
    The snowball effect is strong. Any REIT that can trade at a premium can issue smaller amounts of equity.

     

    Lets say Company A and Company B are competing, but Company A is favoured over B due to size and execution.

     

    Initially their dividends are equal (6%), but over time Company A's falls to 4% due to their superior performance. (This means 50% capital appreciation for existing shareholders.)

     

    Every equity raise is now 50% more efficient than Company B's... that's a heck of a lot less compounded dilution.

     

    -Mike
    2 Apr 2014, 12:10 AM Reply Like
  • Ilioula
    , contributor
    Comments (37) | Send Message
     
    Stock issued at a premium is what u want to see. Great management.
    1 Apr 2014, 10:49 PM Reply Like
  • bufphilo1
    , contributor
    Comments (6) | Send Message
     
    It's true that management seems excellent. It's true that like all investors with more resources ($) the potential is greater to make more, if the business opportunities are lucrative. This move does dilute shares and the potential for a misstep by management is greater with the increasing portfolio of mortgage instruments . A lack of due diligence on some of their deals will effect earnings. The jump to an expanded portfolio may have its growing pains which I assume and hope management has prepared for. They have a good model, and track record, but expansion is always problematic. And, I believe that the real estate market is going to change substantially as there is a transition out of the low interest environment. Their current investments could have the potential to bring greater revenue if management has properly addressed those potentials, or not. The market for their services in this era of strict bank oversight is very strong but may face the same obstacles as larger banks if they grow too much. Maybe a smaller profile is better? I like this management and hope they are prepared to make another jump.
    2 Apr 2014, 09:37 AM Reply Like
  • speculative
    , contributor
    Comments (712) | Send Message
     
    This is excellent. I was waiting for an opportunity to add more as this is my favorite. I hate to pay more than I'm in for and today's drop won't get me there but at least it is at a discount. That said, I was hoping we'll see the possibility of a dividend increase for the next quarter which I don't think will happen due to the dilution which will spread out the pot. Hopefully, it will dip into the very low 7's where accumulating for long term income only makes sense as NYMT will be back over $8 in 6-9 months reducing dividend % while paying the same dividend.

     

    Superb management and awesome dividend!
    2 Apr 2014, 09:46 AM Reply Like
  • AlaskanGoldMiner
    , contributor
    Comments (32) | Send Message
     
    Truck, meet NYMT. NYMT meet truck. I just dropped the tailgate.
    2 Apr 2014, 02:30 PM Reply Like
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