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Thursday, June 12, 2008

Thornburg Mortgage: Risks De-listing


Thornburg Reports Loss of $3.31 Billion on Writedowns (Update1): “Thornburg Mortgage Inc., the New Mexico lender that averted bankruptcy in April, said it lost $3.31 billion in the first quarter because of writedowns on securities linked to real estate.

The loss, which the company reported without including preferred stock dividends, was $20.64 a share. That compares with net income of $75 million, or 62 cents a share, in the same period a year earlier, Santa Fe-based Thornburg said today in a statement distributed by Business Wire.

Since a bailout in March enabled Thornburg to resume lending, the mortgage market has worsened, sending the stock below $1. Thornburg has lost $6.65 billion in the past three quarters amid the worst housing slump since the Great Depression. The company said today it had unrealized market losses of $1.54 billion on mortgage-backed securities and securitized loans during the first quarter.”

That $20.64 per share loss is massive. I first wrote about Thornburg (TMA) in Thornburg Mortgage: Pyrrhic Rescue where I argued that TMA was a dead company.

“The stock was unchanged yesterday at 72 cents on the New York Stock Exchange and has lost 92 percent of its value this year. To avoid being de-listed from the NYSE, Thornburg shares within the next six months must regain a $1 price and maintain it for more than 30 trading days.”

Not going to happen because the housing market continues to deteriorate:

New foreclosures rose to a seasonally adjusted 0.99 percent of all U.S. home loans, up from 0.83 percent in the fourth quarter, the Mortgage Bankers Association said last week.”

5 comments:

Anonymous said...

fbTMA intends to revrese split. Delisting is not an issue. As for the rest only time will tell.

This is not a value oppurtunity, but at this point it not worth selling either.

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