Thornburg Mortgage stock price pops +300%!
Correction: I completely missed the fact that there is a 10 for 1 reverse stock split taking effect on 9/29/08. See the 3rd comment and thanks Denis for the correction. My bad. I will leave the post up so all can have a laugh at my lack of research.
I am not sure exactly what happened but the shares of Thornburg Mortgage (TMA: 0.00 N/A N/A) jumped 310% yesterday. And this was on a day when the rest of the market was falling by 6-10%. I could find no news on the reason for the jump but I will take a guess.
Thornburg has been having problems with creditors wanting to make margin calls on held securities even though an agreement had been reached stopping all margin calls until March 2009. These issues had been preventing TMA from completing the stipulations for the new funding agreement that will allow them to restart their lending business and get creditors off of their backs. I would guess that these issues have been resolved and Thornburg can go forward with their new funding plan.
About 6 weeks ago I wrote an article on the fall and possible recovery of Thornburg Mortgage. At that time I stated the company would survive and might even worth a $1 a share from the at that time 25¢. At this point in time, the market agrees.
I own very few shares of TMA, having sold most of my position when the stock was still in the mid $20s. I have mainly a sentimental hope the company survives and thrives. I believe they were primarily victims of the recent financial crisis and not among the greedy bastards who set the whole thing up.
Note: I have a long position in TMA.
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Comments
That’s what it is. It is effective Sept 29th. So we are actually talking a loss versus the pre-split.
On September 23, 2008, the Board of Directors of the company reaffirmed their approval of a one-for-ten reverse split of the company’s common stock, which will become effective on Monday, September 29, 2008. The reverse stock split was implemented to cure a deficiency under Section 802.01C of the New York Stock Exchange Listed Company Manual that resulted from the average closing price of the company’s common stock falling below $1.00 for more than 30 consecutive trading days.
Pursuant to the reverse stock split, Thornburg Mortgage common shareholders are entitled to receive one new common share for every ten preexisting common shares owned, with fractional shares being rounded up to the nearest whole share. American Stock Transfer and Trust Company will act as the transfer agent for exchange of stock certificates in connection with the reverse stock split. Shareholders who hold physical stock certificates will receive instructions from American Stock Transfer and Trust Company on how to receive new stock certificates. Shareholders whose certificates are held in “street name” or on deposit with their brokerage firm will need to take no further action. As of September 29, 2008, Thornburg Mortgage’s common stock will trade under the new CUSIP number 885218 800.
Does it have to do with the reverse stock split(10 to 1)?
I was looking through the news feed to see when the conversion was to be made.
If it is not, that’s great news.