I mean it would have been negative had we not know everything in advance and had the market not priced in ACAS at much lower than for a bankrupcy scenario already. Had ACAS been traded for $10 and all coming as a big surprise, that would have been horrible.
But there was no surprise here. It's almost a non-event, and the market hasn't seem to react to the report even.
That's what I like about ACAS, while the situation is very bad, at least we know it several weeks/months in advance and we know where we go.
I'v been surprised that nothing surprised me in the report. (unlike the Q3 report did)
Asset values have fallen more then expected. NOI fell much more then I expected. And overall unrealized losses in 2008, about 53% loss, is much more than I expected. If values continue to decline in 2009 like 2008, this company wont have much left. S&P500 down another 20% since then. Its all about how their portfolio does for the rest of 2009. It really is a depressing situation we have at the moment. If we can get past dealing with the bank, the shareholder lawsuits, the mark to market writedowns, and acas is able to make some asset sales at good prices, it should be able to continue and provide dividends to stockholders. As the dust settles, share price will either rise to NAV (whatever the hell NAV is at when the dust settles) If the market assumes appreciation of asset values, the market will guide acas higher.
While the writedowns in qtr 12/08 were bad, they did say that since 12/31, bond spreads have not deteriorated. Since 2/3 of their portfolio is fixed income, at this point the writedown at 3/31 should be much less, unless of course bonds and stocks deteriorate materially from here.
I suggested on this board a while ago that they would estimate realizable value in excess of MTM book value at over 1 billion dollars at 12/31. This is in fact what they did, with realizable value about $5 per share more than book. If there are further MTM writedowns at 3/31, that billion dollars of realizable value in excess of book will probably be even higher.
Investors should consider the fact that they expect to realize over $5 a share that isnt even on the books anymore. With the stock at about $1.20, that alone offers significant upside potential.