Citi rally leaves Thornburg behind

Posted by Tim

April 20, 2008

FORTUNE: Daily Briefing Citi rally leaves Thornburg behind «

Here on this blog I was a big fan of Thornburg Mortgage (TMA: 0.42 +0.08 +23.53%) surviving the mortgage meltdown and making investors a bunch of money. Then in March they got hit by margin calls that basically wiped out the assets of the company. To save the company, management sold $1.3 billion of bonds with options to buy 90% of the company for 1¢ a share. It appears the company is now diluted down till its value is around the buck the stock is trading for.

I have no idea where Thornburg Mortgage will go from here. It seems like it will be a long time for the company to get profitable enough to start repaying the financial hole they have dug to survive. (terrible metaphor!). I still hold a small, almost worthless position in TMA, so will hold on and see what happens. I am not counting on a fast turn around!

20 Stocks

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Comments

Comment by Larry on April 21, 2008 @ 7:29 am

Re: Thornburg;

What are your thoughts on the outcome of the Pref’ds. (C,F etc).Seems they are trying a cramdown, without benefit of a BK or PrePack and that is most unusual to discriminate in the order of common vs Pref.
Somehow, I think there will be some resistance at cashing them in for a pittance while the common still has value ?

Thanks, Larry

Comment by Tim on April 22, 2008 @ 5:10 am

As a holder of the common, I have not kept track of the preferred issues. I am not certain how much the holders are scheduled to get. At this point I am not counting on anything from TMA.