Smooth Jazz

Alesco Agony Reaches a Crisis Point

Good points, but you didn't mention that the failed CDOs only hit 41% of their taxable income, suggesting the last 2 CDOs are much larger contributors that the 2 that are offline. In other words, 59% of their taxable income (approx 50cents per year) are still coming from contributing businesses, a nice chunk of income for a $1 stock with over $100M in cash.

And while you noted that the $86M was a tax loss, you didn't mention the fact that this allows them to save on paying out cash for "Phantom Income". Or that they are no longer subject to counter party risk on that cash. Finally, you failed to note that AFN has over $100M unrestricted cash, $88M of restricted cash available for additional investments, a viable CLO generating approx 24cents in income per year, and no short term recourse debt.

If they had recourse debt and facing imminent firesales into this market, I would agree with you that they faced an imminent crisis. While the TruPS business broken is broken, their huge cash position provides a significant cushion.