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Latest Comments27 Comments
Alesco Agony Reaches a Crisis Point
I hear you. The TruPS model is DEFINITELY broken. In a Seeking Alpha post yesterday, Prudential Speculations described some possible scenarios for them going forward including focusing on the leveraged loan franchise they have built, DeREITing and using the cash to rebuild the platform around something other than bank TruPS. Btw, RAS (common and the PFD B & PFD C) is my largest holding in the REIT space. Your Mortgage REITs journal is a fantastic blog and I check in often. GL to you.
Alesco Agony Reaches a Crisis Point
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.
Alesco Financial: REIT Selling For Less Than Cash On Hand
Thanks for the info Scotty. That would depend on which banks and whether they are in AFN CDOs. Other than IMB, ETFC was the only other large financial company in AFN TruPS at 2.4%. If the deferred/defaulted that would hit AFN. Multiple smaller banks deferring/defaulting would do the trick as well. One or two additional small deferrals would likely not have much impact.
Alesco: IndyMac Failure Priced In
I dont see the stock getting any traction in this market where good financial names are getting 10% - 20% haircuts daily. Hopefully, this "crisis" in the sector will pass and folks will see the value in AFN that you described. Unfortunately, I don't see any let up until we get through C, BAC, MER, etc earnings reports the next few weeks, and the REITs start reporting in early August.
Nice job!
Alesco Financial: REIT Selling For Less Than Cash On Hand
User,
Read the May 15th press release carefully. AFN said the CDOs would cure in 4 - 7 months even if IMB defaulted and didn't pay another dime. The key is that there are no other or minimal defaults/deferrals in the affected CDOs. AFN Mgmt suspected that IMB would eventually fail and that is why they put that caveat ("even if IMB does not resume making payment") in the press release. The key for AFN therefore are the other 300+ banks in its CDOs.
GL to you.
Alesco Financial: REIT Selling For Less Than Cash On Hand
Hello Franklin,
Yes, I am the author and I own AFN shares. I use a stock screener which filters out high yielding stocks where the yield is way out of whack. Then I do my DD and take my chances from there.
AFN first came on my radar when it dropped in the $2s in Aug 2007 after the AHM meltdown took down the entire sector. Since then I've added in the lows $2s and low $3s and received 4 dividends (including the one today) equal to $1.06. I'm usually a trader who likes to swing trade these companies for profit but chose to hold this one through all the ups & downs.
GL to you.
Crystal River Capital: Deleveraging to Wait Out the Storm
investorvillage.co...&...;
Now you're starting to flail about like a small child. Just where in that Novastar post from 2 years ago did I advise buying Novastar???. You are flat out LYING. The post clearly states that a number of posters were asking me for my best guess on Novastar 3Q2006 GAAP and Taxable Income. I provided a detailed response.
I note you didn't post the ACTUAL RESULTS versus my estimate which I followed up with a post a few days later:
www.investorvillage.co...
That seems to be your pattern. Only provide PART of the story. Why didn't you link to my follow up post days later?
And what does your link prove other than the sector has been hammered siince early with many financial companies down 50% - 80% since then. Go research what JRT, ABR, NCT, AMC, C, BAC, LEH, MCGC, ALD, etc. etc etc and you will see they have all suffered the same fate or worse than AFN.
Finally, posters who follow me on Yahoo know that RAS and RSO are my biggest holdings that I picked up in the $5s & $6s respectively. I'm way up on my 2 largest holdings. Since you have so much time on your hands to spend all day on GOOG, how about spending that valuable time and locating the posts where I recommended RAS at $5+ and RSO at $6+.
Peace off.
Crystal River Capital: Deleveraging to Wait Out the Storm
Sure the numbers are wrong, at least 2 of them are since the company provided updates yesterday on the unused credit facility and callable repo debt. As of July 7, the unused line is $70M (higher than the $52M reported in the article) and the repo balance is $22M (lower than the $28M reported in the article). Of course, this rebuttal wasn't about numbers and I think you know that. The anchor of the article was the April 8K, and all I was doing was something you didn't alert your readers to. It appears that since the credit line was higher and repo debt lower, the company may have used some of the $45M cash reported in April to pay down one or both. I agree yesterday's PR didn't address the current cash balance and unencumbered assets compared to the numbers reported above.
Indeed, the crux of my complaint with you is not what you said, but what you DIDN'T say. You made some assumptions about CMBS performance, credit metrics and the like. We will not know whether you are right or wrong until the company reports. My complaint was that used the "Bankruptcy" meme in your headline, obviously to get a desired effect, without alerting your readers the company had made some moves a few weeks earlier to avert the cataclysmic scenario essential guaranteed would occur.
Next time I suggest you TRUST YOUR READERS. Tell them EVERYTHING and let them decide. Give them ALL the data points and let them make up their own minds.
Peace out.
Redwood Trust: From $30 to $4 by Year-End?
Hey Wez, You are just a flunky for Fast Money "Hitman" Westman, so let me make this plain for you in the case of CRZ: IT'S ABOUT FULL DISCLOSURE. If you are going to scream bankrutcy in an headline grabbing article, at least tell your reader about the company's liquidity backstop, like CRZ Mgmt did today, and let readers make up their own minds.
Keep chasing that Shill around, but a lot of people are watching him now, and people are gathering information about his omissions and deceptions in anticipation of a suit against him. CRZ started recovering after they came out with a statement today, so it may well turn out that his CRZ hit piece was deliberate manipulation. Rest assured, you may very well get an opportunity to cheer him on in the pokie.
Crystal River’s Q2 Write-Downs Could Bankrupt the Company
Greg "Hitman" Weston,
Meaningless?? The company just obliterated one of the the 2 major tenets of your hit piece: Namely that bankruptcy was imminent as they wrote down the value of their assets in 2Q according to you. As Davis and I mentioned to you and the editors of Seeking Alpha a number of times yesterday which you casually omitted from your "objective" article, the liquidity available on a funding line is more than enough to cover the modest $22M of callable debt they have outstanding.
The other major tenet of your article, that negative marks will be material and "might" trip covenants, will not have an answer until CRZ Mgmt officially joins the fray and publishes their numbers. You may eventually be right that they have significant negative marks. I admit that this is a possibility and the one positive aspect of your article was the significant work you put into estimating the potential marks.
But CRZ SP rise late in the day, on an absolutely brutal day for financials, and the $2.60 - $2.65 AH bid/Ask according to Schwab at 6:30pm EST, suggests it MAY start to recover somewhat from your ambush. I think the company shot down your imminent bankruptcy thesis this afternoon. We'll just see where we go from here with credit markets in such terrible shape.
Crystal River’s Q2 Write-Downs Could Bankrupt the Company
The company statement reinforced my entire point regarding my problems with his article: The he OMITTED germane information such as the company only had $22 of Repo exposure that could be more than covered with adequate liquidity to prevent bankruptcy. And to make matters worse, his hit job appears on a day when financials are being taken to the woodshed and shot yet again, excascerbating CRZ's drop.
I sincerely hope this short pays for this!
Crystal River’s Q2 Write-Downs Could Bankrupt the Company
Obviously you were able to get away with this. If the stock keeps falling, at some point the company will HAVE to respond at the urging of either the NYSE or on its own initiative. It is really sad that someone of the blue can use a respected public blog to manipulate stocks in this manner using dubious assumptions and omitting key elements of a contrarian thesis. A bullseye is now on you. IF you profit from this manipulation and IF it is proven you were malicious, at least you'll have some profits to put towards legal fees in defending yourself when you are sued.
Best Regards & peace out.
Crystal River’s Q2 Write-Downs Could Bankrupt the Company
209.85.173.104/search?...
Greg Weston,
This is getting almost comical. You reference a post of mine from 11/5/2006 where I estimate Novastar's GAAP and Taxable for 3Q2006, without pointing on the post 2 days later which showed my estimates were almost dead on:
www.investorvillage.co...
And what does Novastar 2006 have to do with anything? These stocks go in cycles and I traded in an out of Novastar (Including the Preferred) about 15 times between 2004 and 2007. A GOOG search of my Yahoo NFI posts going back a few years clearly shows that. I have no idea why my trading philosphy on Novastar in 2006 had to do with their status in 2008 or CRZ today.
Get a grip and stop being so defensive. Just try to include data points that go against your these next time and let the reader decide what is germane.
Crystal River’s Q2 Write-Downs Could Bankrupt the Company
Greg Weston,
How can you say I am consistently wrong when you don't even know me. On the other hand, I believe you are shark trying to manipulate markets and a well known blog site. As previously stated, my problem is not so much what you wrote (even though I see quite a few inaccuracies), it is what you DIDN'T say, namely:
1. The company recently deleveraged away repo risk, and recently enhanced liquidity up to approx $200M including unencumbered assets; and,
2. The company recently declared a 30cents dividend. Companies going bankrupt
By leaving out these critical data points, you did not provide your readers with a "complete" picture and calls into question your motives.
In any event, the editors from Seeking Alpha have contacting me about rebutting you. I intend to do so by reminding the readers of Seeking Alpha of CRZ recent liquidity actions which you omitted from your "article". We'll see if the editors can get it up on the site quickly enough so that investors get a balanced view and can make up their own mind.
Redwood Trust: From $30 to $4 by Year-End?
I have no dog in the RWT hunt, but it appears your hero has pissed a lot of CRZ stakeholders off with his "next" hit piece. I know of at least 7 commenters on the CRZ piece and perhaps another 10 on the CRZ Yahoo message board that is contacting either Seeking Alpha Mgmt, the SEC, CRZ Investor Relations and Brookfield Investor Relations. Rarely do I see this type of passion with so many people, even folks without a position, react so vehemently. At a mimimum, Mr Weston has put a bulleye on himself and people WILL be watching.
seekingalpha.com/artic...
Mr Weston wants everyone to think CRZ is going bankrupt in a few weeks, but failed to tell his readers that the company has as much of $200M in liquidity via unrestricted cash, unencumbered assets, unused credit lines, etc and only approx $20+ in short term repo debt as of May 2008. He also failed to tell his readers CRZ just declared a 30cents dividend 2 weeks ago, or satisfactorily explain how a company going bankrupt in July after writing down assets is paying out dividends to shareholders. I don't think anybody is claiming CRZ is not struggling or will not go insolvent eventually; People are mostly upset that Mr Weston blatantly kept critical liquidity information from his article while claiming the company is going bankrupt, ostensibly to make a fast buck on his puts.
Well you will get the opportunity to pay a LOT of attention to him in the pokie IF it is demonstrated that he is blatantly using these forums to perpetrate a fraud for financial gain.
Peace out.