Thornburg's a Huge Bargain After Monday's Crash

by: Jack Yetiv March 04, 2008 | about stocks: TMA    

Jack Yetiv

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

Thornburg Mortgage (TMA) is a major single-family residential mortgage lender (and mortgage REIT) focused principally on prime and super-prime (i.e., high-credit-score) borrowers seeking jumbo and super-jumbo mortgages. Even though TMA has never held a subprime loan (that I know of) in its life, it got taken to the woodshed along with every other lender as a result of the subprime implosion of the last few months. During that time, TMA's stock price cratered from about $30 to about $10.

Things looked up in early Feb, 2008, when TMA reported a profit of 33 cents a share (Wow! A residential lender that's profitable?!) and in reading between the lines, one got the idea that subsequent quarters would be even better. But given the volatility in this space, this good news was not to last.

On Feb. 28, Thornburg said it was facing margin calls because the value of some of its mortgages had fallen amid "a sudden adverse change in mortgage market conditions" that began on Feb. 14. As of Feb. 28, TMA had met margin calls totaling $300 million, which reduced liquidity it might need to meet future margin calls, if any. Thornburg also said, however, that its securities faced a relatively low risk of further downgrades due to their quality.

That sanguine assessment turned out to be incorrect. Monday morning, before market open, TMA announced another $270 million in margin calls—and also stated it did not have the cash to meet the calls. As a result, Standard & Poor's cut its rating on Thornburg to 'SD' - one of the lowest grades possible - from 'B-.' The new rating indicated that Thornburg was in "selective default" because of a default notice it had already received.

Thornburg said the margin calls are "strictly a result of the continued deterioration of prices of mortgage-backed securities precipitated by difficult market conditions." The calls are not reflective of the actual performance of the securities, the company added. Regardless of the reason for the calls, TMA advised that yesterday's margin call could "have a material adverse effect on the company's ability to continue its business in the current manner."

Not surprisingly, shares crashed about 60% yesterday, hitting an intraday low of $3.53 after having closed at $8.90 on Friday, which itself was a big drop from $14 earlier in February. It was while TMA was trading under $4 around mid-day yesterday that I bought 20,000 shares at $3.81/share. These were my reasons for doing so:

1) TMA's business has nothing to do with subprime loans, which have default rates of 10%+. TMA's default rate is less than 0.5%.

2) A couple of months ago, Mr. Thornburg himself bought 1 million shares of TMA at about $10/share. Other insiders own a lot of TMA as well. It is my belief that when insiders own that much stock—much of it acquired at a price more than double the $3.81 I paid—they are going to work very hard to make sure the company does not go belly-up.

3) The underlying business allowed TMA to earn 33 cents per share in the most recent quarter, reported about one month ago. TMA's profit margins have actually substantially expanded in the past few months, suggesting greater profit potential once things settle down. Even if TMA did not grow its profit at all, at 33 cents per quarter, it would make $1.32. At $3.81/share, that's a PE of less than 3.

As long as TMA is not entirely incapacitated by the margin calls (and that is certainly a possibility), there is no reason to believe its earnings going forward should be much less than $1.30, but even if they decrease by 50%, that's only a PE of a bit over 5.

4) To put it a different way, iF TMA keeps making 33 cents per quarter and gets valued at a PE of 10 as market conditions improve and margin calls are done with, its stock value would be about $13. Thus, at $3.81, a very good risk-reward ratio exists. Also, it is worth noting that TMA was valued at $14/share less than one month ago, and unlike many other lenders, TMA's underlying business hasn't imploded.

5) TMA faced billions in margin calls in August 2007 and handled that emergency just fine and even lived to tell the tale.

6) I also figured that such a good business with such good underlying collateral (a default rate of less than one-half of one percent, especially in today's environment, is nothing short of spectacular) would be able to attract capital to meet Monday's margin call. I was hoping that the capital would be in the form of debt (in effect, a refinancing) rather than a bottom-feeder taking significant equity, but either would have been OK. It just seemed to me that a bailout of one kind or another was extremely likely given the good quality of TMA's mortgages.

Well, at 3:23 PM, while TMA was trading at about $3.60 (a bit under my entry price of $3.81 - oops!), TMA made this announcement:

Thornburg Mortgage, Inc., today announced the completion of a collateralized mortgage debt transaction collateralized by $992 million of the company's prime hybrid adjustable-rate mortgage loans in the publicly registered Thornburg Mortgage Securities Trust 2008-1. This transaction was accounted for as a financing and not as a sale and the proceeds were used to reduce the company's borrowings under its ARM loan warehouse financing lines by approximately $920 million.

Going forward, Thornburg Mortgage anticipates an increased use of collateralized mortgage debt financing and reduced reliance on reverse repurchase financing. At December 31, 2007, 64% of Thornburg Mortgage's mortgage assets were permanently financed by collateralized mortgage debt transactions as compared to 37% at June 30, 2007.

In summary, this transaction enhances Thornburg Mortgage's liquidity position and provides long term financing for the company's originated mortgage loans.

The stock immediately ran up from $3.60 and traded between $4.30 and almost $5.00, closing at $4.32. Although we don't know how much TMA paid (in transaction costs and interest rate) to attract this capital (undoubtedly, TMA paid a premium), I'm glad they got the cash via debt rather than equity.

Because I think we'll hear about further liquidity enhancements going forward, and for the reasons I noted above, I ended up buying another 10,000 shares near the end of the day (at $4.51/share). Assuming a press release describing additional liquidity enhancement and/or upgrades, I expect to see TMA go over $5, and probably closer to $6. If earnings in the 20-30 cent range are reaffirmed in the near future despite the margin calls, I expect to see $7. And if things settle down in the mortgage business—as they will in the next year or so, especially for a company holding only prime and super-prime debt—I see TMA at $15.

Of course, if additional margin calls materialize and are unmet, I see TMA going back to $3/share. Given the billion dollars TMA picked up today, and the excellence of its underlying mortgages, I consider the latter possibility rather small. Therefore, I think that at $4+ (or even $5+), TMA presents a very good risk-reward opportunity, albeit for investors who can tolerate risk.

Disclosure: Long TMA

Related Articles

This article has 658 comments:

  •  
    Mar 04 09:07 AM
    We strongly agree with this article…

    Buying on this dip? I keep thinking that maybe THE HERD is really correct and the uncertainties in the corresponding securitized debt markets is just too unpredictable at the moment to play, but then again, perhaps what happened yesterday is just one of those things that happens when there is volatility, panic, and confusion.

    BUT, after TMA FINANCED (NOT SOLD) that $1B yesterday in record time, I’m convinced that they will survive and ultimately prosper. If one must pick financial investments in this market, the only truly valuable capital is management, which in this case is extraordinary. We’re investing a lot on the fundamentals of the TMA business model and the strengths of the straight shooter CEO, Larry Goldstone, and his observably superior team to successfully navigate through this perplexing mess.

    These guys aren’t likely to bankrupt and there is clearly BIG money betting on that (Bill Miller @ Legg Mason is historically a genius stock picker and he obviously likes the play.) A quality firm with very high performing AAA mortgage assets, if not the best, will persevere through the dysfunctional aspects this convoluted market presents.

    If a Thornburg with its GREAT & PERFORMING PORTFOLIO can’t make it, who can or will?

    Ed Steedman
    Swift Island Capital Partners


    Reply | Link to Comment
  •  
    Mar 04 09:10 AM
    You have put your money where your mouth is and i admire that greatly. The waste and damage caused by the insanely complicated sea of white collar crime infested finance should be carefully disassembled by a grass roots vigilante group that you and I could head. We would of course need extraordinary powers and protection. Step one: find a Fed guy who can actually utter one adlib sentence without the word "Um"
    Reply | Link to Comment
  •  
    Mar 04 09:24 AM
    You are going to lose it all. They will not make it through the week. More margin calls already there. They still have not fulfilled the $270 million. Remember, the $920 CMO only PAID DOWN on warehouse line of $27 Billion to $1.8 Billion or so. This alleviated PART of the $270 million but they still owe likeyl around $180 million.

    QUIT TRYING TO LEAD SHEEPLE TO THE SLAUGHTER.
    Reply | Link to Comment
  •  
    Mar 04 09:26 AM
    A guy two days ago said it was a bargain at $10.00. Today it's a bargain at $4.00. With action like this, I'm thinking it might not be such a good bargain.
    Reply | Link to Comment
  •  
    Mar 04 09:50 AM
    I second oldie383's comment - you're putting your money where your mouth is, and that is admirable, especially like this. In response to Ed Steedman's comment, "A quality firm with very high performing AAA mortgage assets. . ." - I myself no longer trust ratings like these. For example, if Ambac and MBIA can still maintain AAA status when it seems like they no longer deserve it, then I am very leery about any and all other ratings Moodys et al. puts out there. It is for this reason that I have not invested in TMA as others have, although I have also been tempted to.
    Reply | Link to Comment
  •  
    Mar 04 10:19 AM
    I agree...a billion dollar improvement in cash and yet the market seems unimpressed and the press largely ignores it! This is a best-in-class business poised to thrive on better margins in the short run and bigger volume when the real estate market starts recovering. I bought more yesterday after 4 pm and more this morning at opening!
    Reply | Link to Comment
  •  
    Mar 04 10:20 AM
    This stock will be great for day trading for the next few days, but as I understand it a lot of their paper is stated income in bubble areas. As more pepole walk away on their debt despite high incomes and high FICO the collateral becomes more and more toxic. Maybe the paper deserves AAA rating, but nobody wants to lend against it these days at anything near full value. The lack of an ability to borrow is death for a mortgage company. Personally, I would have been hapy with the quick $140,000 k and sold the first batch at the price you bought the second batch.

    Good luck, I hope this one works out for you, sounds like you can afford the loss if it doesn't but most people have NO BUSINESS investing in a stock like this, simply too mch risk.
    Reply | Link to Comment
  •  
    Mar 04 10:40 AM
    There is not a billion dollar improvement in cash, it is unfortunate the company provided so few details on such an important topic. Check out the Dec-07 balance sheet. What apparently happened is a billion dollars in debt listed as Reverse Repurchase is moved to Collateralized Mortgage Debt. A similar recharacterization of loans on the asset side. This is likely an improvement, reverse repurchase agreements can lead to margin calls, but $1 billion in cash does not get transferred to TMA. A sale at par may have done that.

    A lack of understanding of these things is what allows cyclical boom and bust fiannce companies continue. In 2001 the company had about $5 billion in assets, at year end it was over $36 billion.

    If a person is interested in buying TMA, I don't understand the appeal of the common stock versus the preferreds.
    Reply | Link to Comment
  •  
    Mar 04 11:19 AM
    TMA is the best of breed, but is way overleveraged in a declining asset market. Bankruptcy will clear the books. Non bottom feeding shareholders are already in their graves, there is not much left to save. All those home equity loans and second mortgage loans are gifts with many banks not even trying to collect them. The Alt A are proving to be losers.
    Reply | Link to Comment
  •  
    Mar 04 11:40 AM
    Let me respond to a few of the commenters. First, I put VERY LITTLE weight in ratings of debt. There is ONLY ONE rating I care about--and that is the DEFAULT rate. We are almost a year into crashing home prices, crashing stock prices, lenders going out of business, etc.

    What is the default rate on TMA mortgages TODAY? Less than 0.5%. To me, that is the only metric that really counts. I have done half a dozen loans, all jumbo's, all stated income, and have not missed a payment and certainly haven't defaulted on anything. The point is that one can speculate on the impact of stated income, or the fact that the loan is adjustable (most of mine have been adjustable), or that they are interest-only, but where the rubber meets the road is the default rate.

    And TMA's default rate is absolutely incredible.

    To HedgeFundManipulator (quite a handle there!):

    Please tell me more about your conclusion that the $270 million has now gone down to $180. How did you glean that from the press release?

    To PJ168:

    I don't understand your comment. I did not comment on TMA being a good deal at $10 two days ago. If you know otherwise, please let me know.

    To Mr. Shinnick:

    Your thesis is that high FICO scores are not predictive of low default risk going forward. Everything I have read says the opposite. Can you refer me to your source on this point?

    I do agree that this is a risky play that one should not play with unless one can afford to lose, although even in bankruptcy, I cannot believe TMA's enterprise value isn't $480 million ($3/share) so I think downside risk does not take us all the way down to zero. For those who can take this risk, I think the reward potential is very substantial.

    To Mr. Riesenberg:

    I am intrigued by your comments. Tell us all more about (1) How the debt moved from reverse repurchase to collateralized debt--did this not involve an outside party who put up cash? (2) Tell us why you prefer preferreds--pro's and con's. Frankly, I have never invested in them, so maybe my not looking at them is a function of ignorance rather than a feeling that they are inferior.

    Jack Yetiv

    Reply | Link to Comment
  •  
    Mar 04 11:59 AM
    I think I'll for a couple more iterations of this "TMA IS A BUY" article before I get back in after taking my lumps from $12 to $4.

    Maybe at $.50 it would be worth the risk.
    Reply | Link to Comment
  •  
    Mar 04 12:33 PM
    At Dec-07 TMA had $36.5 billion in debt, primarily $11.5 million Reverse Repos and $21.2 in Collateralized Mortgages. With Reverse Repos, if the value of the loans decrease, as they have, the borrower can get a margin call. Collaterlized Mortgages are financings where there are senior and junior layers, the senior layers use the juniors as collateral. This is generally more stable financing, and generally not liable to margin calls.

    I thought TMA may have converted some Reverse Rept to Collaterlized Debt, but the securitization appears to be of originated prime loans, not the purchased Alt-A securities causing the recent margin calls.

    The F Preferred, for instance, has a 10% yield on $25 liquidation value. At a market price of $10.50, that is a 24% yield. If the company survives it goes back to $25 per share.

    If the debt were all long term, the credit quality would likely be the primary factor. With margin debt, market value matters.
    Reply | Link to Comment
  •  
    Mar 04 12:58 PM
    Well, I just put my entire Roth into this stock @ 3.83. This is a quality lender. If they can't keep it a float, it is serious indicator of an apocalyptic and dismal future for our economy, at least in the short run. They may be small in comparison, but still a good indicator overall.
    Reply | Link to Comment
  •  
    Mar 04 01:10 PM
    Isn't essentially coming down to the fact that people are going to draw more out of investments to pay mortgages? It seems that will hurt the stock market overall, but would help certain stocks like TMA. The are so many unsavory intangibles to walking away from a home... ie.. moving, telling your kids you have to move, just a general sense of pride in home ownership despite the pinch involved financially.
    Math is a strong subject for me. But it isn't for a lot of people. They may hear that their home is worth less than what they are in it for in for, but it is STILL THEIR HOME. They are not analysts sitting down every night trying to figure how much their house is worth, they are watching American Idol.
    Reply | Link to Comment
  •  
    Mar 04 01:10 PM
    Erich, even in the event on forced selling TMA could be a good opportunity because its unlikely they will lose all book value, investors will price in the end of humanity on the stock and then people can get in cheap without additional problems of margin calls but just profiting from the arbritrage from peoples reluctance to buy a REIT plus all the potential the company has going forward, what do you think
    Reply | Link to Comment
  •  
    Mar 04 01:18 PM
    jack you didnt got your facts right. the CMO debt financing did not happen yesterday or so. It was already announced on the 10K, the announced yesterday was a desperated attempt from company to halt the stock decline. they were already doing cmo during jan and feb
    Reply | Link to Comment
  •  
    Mar 04 01:27 PM
    Fernando, can you tell me what language in the 10K announced what I believed hit the wires at 3:21 yesterday? This is an extremely important point, which should be easy to resolve, one way or the other?

    By the way, Erich, do you agree with Fernando's comment or was there a new event that was announced yesterday?

    Jack Yetiv
    Reply | Link to Comment
  •  
    Mar 04 02:14 PM
    on page 40 of the 10k they say they increased their liquidity position by issuing CMO when talking about the margin calls. this was late feb, it was $1b, they did $6b the entire 07. there is no way that $1b happened in march, it was over the course of jan and feb. they were just desperate to halt the stock decline and reannounced yesterday
    Reply | Link to Comment
  •  
    Mar 04 02:23 PM
    TMA is getting margin calls because the market price of their holdings has been hit - hard. In setting these prices, the market might be stupid. Indeed, with the defalut rate on the mortgages themselves as low as it is, the indication is that the market IS stupid (or that either the default rates will soar). The buyers of TMA are all clearly betting that the market will eventually realize that the default assumptions presently implied by Alt-A pricing are way too pessimistic.

    But this isn't the whole story. The main risk TMA investors are isn't whether or not the market is valuing the Alf-A loans correctly. Instead, it's whether the lenders will force TMA to sell these loans at the currently depressed prices due to the company's inability to meet the margin calls. If this happens, the money is lost - even if Alt-A prices do eventually recover.

    In rough terms, TMA has $2.0 billion in equity. $825 million is preferred, leaving $1.175 in common equity. If TMA is forced to get out of its $11.5 billion reverse repos at a 10% loss, you're wiped out. This might not happen, but there's a huge risk that it does - even if the prices at which the Alt-A assets are liquidated are "stupid".

    So Jack, you might only care about the DEFAULT rate, but the investor who benefits from that low default rate may well be the hedge fund who picks up the asset at a fire-sale price when TMA is forced to sell (as opposed to you).

    And to those "if they can't make it" investors: Yes, TMA has a great portfolio of loans. But their huge leverage and asset/liability mismatch make this company effectively the classic "short puts" investment. 10 out of 11 years, shorting puts looks like a great return strategy. In the 11th year you get completely wiped out. This could well be TMA's 11th year.

    Reply | Link to Comment
  •  
    Mar 04 02:36 PM
    Hartwell, do you know what are the differences between the various preferreds?
    Reply | Link to Comment
  •  
    Mar 04 02:45 PM
    To Jack:

    Another analyst/writer said it was bargain over the weekend as it had dipped under 10.00.

    My sentiments are simply this post that I made on yet another TMA article.

    Doesn't seem like the time to betting on mortgage co's. Some think there is a lot of quality here while others make mention of their large holdings in CA and FL and that much of their Alt A is stated income. The stock at 4.00 (approx 25% of the year end book value) indicates that when the financial statements catch up with the market value we'll see losses over 1 Billion. And who really knows what the liquidity situation is. TMA could be out of business at any time.

    Total leverage runs around 18. Analysts/writers also talk about picking up additional capital as if there is no cost associated with it. You bet, just ask Citi, Mbia and Etfc how much their capital cost. High rates on debt and high rates on convertible bonds tells you a lot about what the true fear factor is. The stock value of these companies is either the same or lower now than what it was when they picked up their additional capital.

    Actually I'd like this company to be a survivor but there is no way I'd put any money on it.
    Reply | Link to Comment
  •  
    Mar 04 02:53 PM
    their leverage is actually 5-1 on securities subject to margin calls. they lost $1.1B liquidating $21B in aug or about 5%. if they lose 5% again on $10B, thats $500M so as it currently stands there is almost no risk of bankruptcy. but of course the sale could endup costing more then 5%
    Reply | Link to Comment
  •  
    Mar 04 03:08 PM
    My summary opinion is these guys have been hit with asset quality, liquidity and capital problems. Problems extend throughout the entire sector. Can't see the situation changing here or anywhere this year. Bad news is still coming out and not all current players will be around.
    Reply | Link to Comment
  •  
    Mar 04 03:29 PM
    Following historical default rates could possibly work. Of course, driving your car while looking only in the rear view mirror could also work. The stock market tends to sell off before the actual bad news is announced, not after.

    Alt-A mortgages are not "subprime," and you are correct to point out that journalists have identified the nation's mortgage problems as only stemming from "subprime." Alas I am afraid that is because distinctions between various kinds of risky mortgages elude our friends in the Fourth Estate.

    Alt-A loans should be considered "pre-default"... loans as they are a kind of financial vehicle that no one ever thought of before Greenspan cut rates so dramatically in 2003. They will also have incredibly high default rates as homedebtors realize that Alt A mortgages are free puts issued by the shareholders of companies like Thornburg Mortgage. And when you are in a house in CA, NV or FL that is way underwater, a free put back to Thornburg (inter alia) is a real lifesaver- for your retirement, your children's college fund, or anything else you would like to spend $200-$500k on other than your underwater mortage.
    Reply | Link to Comment
  •  
    Mar 04 03:31 PM
    I bought the Preferred F today--22% yield, trading at 40% of par. TMA can't pay a penny on the common without paying this. In 1991, there was great $$ made on shorting weak credits. Then Marriott got financing, and the shorts had to cover, Citi bottomed, etc. Bernanke needs to figure out that we can't run a banking system on mark-to-market, and worry less about lowering rates than making sure responsible borrowers get money. TMA would be a great place to start. If it goes down, Bernanke surrenders the system to the bear raiders. Almost every financial institution borrows shorter than it lends--that's what a positive yield curve leads to.
    Reply | Link to Comment
  •  
    Mar 04 03:47 PM
    Why the F preferred as opposed to the others?which is the most senior?I would agree that the preferreds are the better bets. but I'm not going to try to catch a falling knife, nobody knows how much they will lose on a forced selling scenario
    Reply | Link to Comment
  •  
    Mar 04 04:02 PM
    why you bought the F preferred as opposed to the others?
    Reply | Link to Comment
  •  
    Mar 04 04:19 PM
    Jack, In a normal environment you would be correct. The problem is with all the panic in the credit markets, these stupid ass banks might force TMA's hand through the margin calls.

    It would be a shame, TMA is a high quality lender, but it is very leveraged.

    I HOPE they can pull it out. I HOPE that the powers that be will not allow a TMA to fail; that would be a disgrace and harmful to our economy. They are not a junk lender.

    TMA's problem is leverage. And you have to blame Goldstone here as well, you would think he learned his lesson last summer in relying on reverse REPO's. TMA is here because Goldstone ignored the many telling him to get off the reverse repo crack.

    I hope they are able to work their way out of this; and hopefully the banks will cooperate.

    That said, HOPE is not a strategy.

    S Hartwell: Well said.

    Sly, if you did that w/ your Roth, you are crazy ... and I hope your Roth is very very small.

    Fernando, that doesn't sound accurate.

    Hedge Fund Manipulator ... [Comment edited for abusive language. Commenter put on notice]
    Reply | Link to Comment
  •  
    Mar 04 05:02 PM
    Hi Jack,

    How did you do with TMA today, Tuesday, 3/4/08?? Closed down $.76 cents today at $3.56. You may have taken quite a hit today. Not sure what your average cost is, sounds to be around $4.04 a share. (20,000 at $3.81 & 10,000 at $4.51) At 30,000 shares, average cost $4.04, sounds like you took a $14,700 dollar loss today. (12% ONE DAY HIT) So what is your time line on this stock??? Did you have a stop loss in place, TMA could go down some more. A bargain at $4.00, a bargain at $3.00, I think it will also be a bargain at $2.00. I wish you luck.
    Reply | Link to Comment
  •  
    Mar 04 06:06 PM
    To dkhkch:

    Your math is correct. As of yesterday, I held 30,000 shares at avg of $4.04. Today I bought another 10,000 at $3.61, so I now hold 40,000 shares at a bit under $4/sh. So, yes, my one-day return is negative 12% (-$14,000). Of course, I also hold a large position in HTE and CSIQ, so actually, my account overall today was hit for almost $50,000. But I really did not buy TMA (or CSIQ or HTE) with the thought of selling any of them overnight. So my one-day return is not relevant. And if you want to know something even crazier, I bought all 40,000 shares on margin.

    So, I do thank you, Mr. Dkhkch for wishing me "good luck." But I stand by my prediction that TMA may well run to $5 in the near future (well before the end of March).

    Everbody and his uncle came out today to downgrade TMA--all of them, way too late, of course (especially late for TMA owners who bought in at $10 or higher). Given that, I am happy (and surprised) TMA didn't ever trade below $3.50 today.

    Let me summarize my thoughts based on reading the above. First, to all who have commented--I really appreciate everyone's thoughts, whether they are critical or complimentary of my point of view. This exchange has been very useful to me--especially the civility of it--and I hope others agree.

    One thing I learned is that the preferreds might have been the better play, but I need to learn more. Why do people ever buy common if preferreds are available? In other words, what is the downside of the preferreds?

    Of note, nobody commented on the fact that TMA's borrowers are largely prime-superprime (low percentage Alt-A, which is what everyone seems to be worrying about).

    To Mr. Haskell: FICO scores do NOT represent driving using the rear-view mirror. Credit scores have been developed primarily for their PREDICTIVE value, and that predictive value applies both in good times and bad and is considered very reliable.

    As to Fernando's point--I'm not convinced that yesterday's $1 billion announcement was simply a restatement of what TMA did in February. In fact, I am pretty convinced it was not.

    Nobody commented on insider purchases in the very recent past.

    Mr. Hatrwell makes a good point I completely agree with--TMA can get killed even if their underlying collateral is made of gold (or even platinum). My point was not that I don't care about forced selling (after all, that is what presented us all with either an opportunity or a disaster-in-the-making... but that when you have an underlying business that is making MONEY even in this environment, that should count for something, and that the "something" is worth more than $4.

    Nobody commented on what they think the enterprise value of TMA is. Is this company's value chain re: obtaining and processing prime and superprime borrowers/loans really worth NOTHING--even assuming (which I don't think is likely) that ALL of TMA's cash equity is eaten up meeting margin calls via forced selling? In other words, will nobody be willing to pay money to acquire TMA's