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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.”


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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