Wrecked REITs: Don’t Quote Me On It!

by REIT Wrecks on July 26, 2008

Alesco Financial in the land of the living dead

May 7, 2007: “As of the end of the first quarter, we had fully invested stuffed ourselves silly with dodgy Trups all of the capital raised in 2006 manic bubble mania! in asset classes which have exhibited historically low default rates and which we believe will continue to provide our investors with solid risk adjusted returns”.

December 10, 2007: “We are pleased with our achievements in continuing to deliver bend over! value to shareholders” James McEntee, CEO of Alesco


December 31, 2007: AFN records a “significant” GAAP net loss of $1.3 billion, or just sayin $22.48 per share and REIT status is in jeopardy.

May 8, 2008: “There can be no assurance that AFN’s board will determine to maintain the dividend rate.”

Face down in the Crystal River

July 26, 2006: CRZ prices initial public offering at $23 per share, a then goes on a buying spree, quickly growing the portfolio to $3.3 billion manic bubble mania yet again! in just 8 months. “With our measured quick, before they cut our fees! investment strategy, our portfolio is well-positioned to generate strong returns in 2007.” Clifford Lai, President and CEO of Crystal River

2007 Results ahhh, deliverance: The Company records a net loss for the year totaling $345.9 million, or $13.86 per share, but hey, at least we lost less than those innumerate juvies over at Alesco and GAAP common equity book value per share declines to $4.48.

Deerfield Resources gets skinned

June 25, 2005: Deerfield sells 25 million shares of its common stock at $16.00 per share. The offering includes approximately 680,000 shares being sold by existing stockholders.

May 12, 2008: DFR reports a Q1 (March 31, 2008) loss of $463.6 million, or $8.43 per diluted common share. REIT status has been in jeopardy since March when DFR was forced to sell the bulk of its AAA rated RMBS portfolio. “Pricing pressure on financial assets has abated since quarter end, and we have successfully stabilized we sold everything we could and there’s nothing left! our capital structure” Deerfield CEO Jonathan Trutter

June 17, 2008: DFR trades below $1.00 for 30 consecutive days, triggering a delisting notice from the NYSE.

Thornburg Mortgage finds a way

‘There is no possible way’ how about that way, homie! the company can lose $3.5 billion worth of long-term capital in a portfolio filled with highly rated mortgage assets.
Larry Goldstone, President & CEO, The Wall Street Journal August 7, 2007

Even (gasp!) confusion and double talk from Merrill Lynch

John Thain on January 18, 2008:”We’re very confident that we have the capital base now that we need to go forward in 2008.”

John Thain on March 8, 2008 “…Today I can say that we will not need additional funds. These problems are behind us we are still being sodomized [and] we will not return to the market and get sodomized twice by the Singaporeans

John Thain on March 16, 2008 “We have more capital than we need, so we can say ouch! to the market that we don’t need more injections. We can confirm that we have tackled the problem”

July 28, 2008: Merrill gets tackled by Lonestar, announcing plans to raise new equity capital in an $8.5 billion public offering, along with the sale of its “super senior” CDO assets for .22 cents on the dollar.

Indeed, Merill Lynch is now behind us…

REIT to be continued,…

Click here for an updated Mortgage REIT list, including current yields

REIT dividends
Disclosure: Somehow, I managed to avoid these dogs. But I got fleas and rabies elsewhere, trust me

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