MPR

Is Thornburg Mortgage Common Really Worth $3.88B?

What still doesn't make sense is the fact that this "strangle hold" was not a secret while TMA was trying to get the deal done. It seems rather less then logical that the price tumbled the Friday when TMA asked for another extension and then rose sharply when they announced the deal was done the followiing Monday. The book value of the shares have been quoted from a negative to a plus .80. Yet TMA closed at 1.45 Tuesday, April 1. The stock goes down Friday because of share holder fear of bankruptcy. But with the book value quotes noted a threat of bankruptcy may result in some sweetheart deal (see BSN). Then the stock climbs when at best it would be worth 1/2 of where it closed. Perhaps I'm looking for logic in a process (buying and selling stock) that seems to be illogical. And I think I have answered my own question. M


On Apr 11 03:51 PM HughEntrekin wrote:

> Wolves- the alternative to shareholder approval is the interest rate
> stays at 18% and the participation agreement stays in effect which
> says the debt holders get all principal payments on all the company's
> mortgages for 7 years; as I said in my original post, this is a strangle
> hold, and will surely lead the company to bankruptcy, as in effect
> as mortgages pay off and as monthly principal payments are received
> this money goes to the debt holders; TMA's own materials say this
> could be worth $2.2B; and TMA still owes these guys $1.35B plus 18%
> interest for 7 years, so the dilution, while bad, is better than
> this alternative;
>
> April 11 is the day the company issues the first warrants; the NYSE
> exception says they must send a letter to the shareholders at least
> 10 days before issuing shares that would otherwise require shareholder
> approval explaining that the new shares will be issued in reliance
> on the "financial viability" exception; in other words, TMA had no
> choice but to do this deal when they did as otherwise their repo
> lender standstill agreement required them to raise 948M in new capital
> by 3-31 or the standstill agreement went away and the repo lenders
> would proceed to sell the mortgages to pay themselves back;
> so the 10 days from the shareholder letter has passed and now the
> warrants are issued and will be exercised by the debt holders;- this
> is just the first tranche of warrants being the 197M I think but
> I also think the repo lenders have gotten their 47M warrants;
> but it is unclear when these new shares will be registered for trading
> and when they could be sold; I think that the debt holders and repo
> lenders will try to find a way to sell their new shares or lend them
> to short sellers who will sell other shares even though they are
> not registered; but I do not know this; it could be that none of
> the new shares will be sold or lent so as to affect the number of
> shares that others could be short until they are registered;
> but TMA is obligated to register them and so it will happen, just
> not clear when.
> and as I've said the big kuhuna comes when the remaining 2.5B warrants
> get issued and those shares can be sold;
> it may be that some effect can start next week or it may not be for
> several months, but it is coming

Is Thornburg Mortgage Common Really Worth $3.88B?

Thanks! Your hurricane analogy is interesting. To play it to its logical conclusion: No matter where it hits, I'm still in the eye since I hold a "position" (if that's the correct terminolgy)? The magnitude I guess is partly based on how large my position is (not large) and of course the actual strength of the hurrican (dilusion). I guess the best I can hope for is for the hurricane (dilusion) to "peter out" and be replaced by a massive high pressure system. While I like to think of myself as somewhat a contrarian, with all the negativity that seems to be logical (at least to this untrained observer)it hard to be optimistic. Thanks again for your time!

M


On Apr 11 03:28 PM Dulcinea wrote:

> On Apr 11 03:03 PM MPR wrote:
>
>
> But someone needs to explain that with the dillution

Is Thornburg Mortgage Common Really Worth $3.88B?

(I posted this under "All Comments" Perhaps you can answer my question?)Excuse what may be a naive question, but I am rather new to all of this. I bought at $1.67 hoping for the proverbial rebound. Obvioulsy no luck as of today. But someone needs to explain that with the dillution that was to occur today (isn't today April 11?) why hasn't the stock tanked and where is all the volume? Is this a good sign? Or am I showing my naivete?

Can someone help a Newbie out?


On Apr 11 02:20 PM Dulcinea wrote:

> It is finally here! It is "D-Day" (Dilution Day) everybody! What
> are we going to do?
>
> Note to Self: Let Senor Patron out of the cellar on "D-Day"

Thornburg's a Huge Bargain After Monday's Crash

Excuse shat may be a naive question, but I am rather new to all of this. I bought at $1.67 hoping for the proverbial rebound. Obvioulsy no luck as of today. But someone needs to explain that with the dillution that was to occur today (isn't today April 11?) why hasn't the stock tanked and where is all the volume? Is this a good sign? Or am I showing my naivete?

Can someone help a Newbie out?

Is Thornburg Mortgage Common Really Worth $3.88B?

Sir Sid: I hope you're right! I'm glad I used what I call my "Risk Funds" (about 5% of my portfolio, which has shown a tasty return over the last year) to purchase at $1.67. But I did liquidate about half of those funds to make the purchase. Oy!