warbucks

Why Downey Financial is Not IndyMac

The author of this piece is either not very bright, or he knows better and is intentionally trying to mislead investors. I am flabbergasted that a man with his bio would make such foolish mistakes in analyzing a stock.

That DSL's market value is 6% of their alleged book value, does not mean they could take a 94% write down of assets and still be ok (as the author implies). DSL's book value is less than 10% of assets, so a 10% write off wipes out all value in DSL equity. Most observers believe DSL will have to write down way more than 10% of their toxic loan portfolio when all is said and done, and that is why it is trading at almost zero. DSL already has over 18% non-performing assets and growing.