Andrew

Thornburg Mortgage Must Sell Its Soul to Stay Afloat

I don't believe reverse stock splits or buybacks will increase the value to the common stock any time soon.

TMA's earnings available to common share holders will be limited for years (if at all) because:
- They have to pay 12% for the $1B, which will eat into the mortgages they are buying/generating.
- They will no longer be able to leverage 20x in the post credit bubble world, which again eats into the future growth potential of mortgage reits.

The only way I see current shareholders make out is if the value of current assets increase in value. With the housing market still going down, i don't see this happening for at least a year.

full disclosure: I am long tma preferred.