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MF GLOBAL (DE) Message Board

  • runstock runstock Oct 31, 2011 1:16 PM Flag

    How come commons wiped out?? Assets more than liabilites in BK filing

    I think, commons in MF should be much better shape than any other BK's.

    Any comments, no news channel is addressing the value of the common..

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    • Value of assets in a bankruptcy is much smaller than in a going-concern firm > the book value of equity is no longer the same (negative for this company).

      Since senior debt is trading at less than 30 cents on a dollar, common shares are worth zero, for sure (and even preferred shares, too). Only bond holders will be paid from the sale of the company assets.

    • Assets in BK filing are not marked to market. They are as of last SEC filing. Asset values have fallen, liabilities have not. It's called leverage.

      Just like if you buy a stock on margin. If it drops, your asset value drops. Your liabilities do not. You still owe the amount you borowed to buy the stock.

      Asset values are now below liabilities. Common holders get nothing.

      • 2 Replies to mckennajfm
      • Unless the assets can be held to maturity and they are paid off in full. Who cares what price the market puts at any given moment on a portfolio of foreign bonds? If they don't default and the bonds are paid in full over the next year, there will be a big reward. The bankruptcy proceeding gives the company the protection it needs to see this investment through to its intended conclusion. GMHO

      • jia has no idea what he's talking about.
        MF only has 6 Billion in Euro bonds, not 40.
        The 41 Billion in Assets and 39 Billion in
        Liabilities are NOT MF's. They are Clients
        who have accounts with MF. Just like a bank's
        balance sheet. I'm done posting, too many
        unsophisticated people in here. good luck

    • That is what I was wondering......No one is talking about this. Any one out there who can shed some light on assets > liabilities?

      I am assuming the debt owed to JP Morgan Chase is part of the liabilities?

      Only serious replies please. No none sense and BS....

      • 2 Replies to s.zeros
      • It is clear that there is going to be more sellers than buyers. I have owned stocks like that before. It sounds like you are new to this game and do not understand this simple elementary stock market principle

        tex from texarkana

      • Back in 2007, Banks leveraged $1billion to buy $40billion of bad mortgages, at the time they thought these mortgages were good, until they default

        today, MF leveraged $1billion to buy $40billion European bonds. At the time MF thought these were good bonds to have. until European countries showing sign of defaulting. Greece already got a 50% discounted on their bonds. MF has $40 billion worth of Italy, Spain...etc bonds. Right now they are trading at a discount, that is why their Yield kept raising. and MF is running out of cash to run the company so they are filing BK. and soon, they will dry up with nothing left.

    • because those $40 billion European bond portfolio doesn't really worth $40 billion. There are $20billion in Italian bonds, will you pay $1 to $1 for Italian bonds today? if your answer is no, then MF's doesn't have a $40billion European bond portfolio as part of their asset.

      The problem is, no one will know exactly how much they are worth, but everyone knows they don't worth $40billion, as the Italian bond yield kept raising daily.

    • Schawb and Interactive brokers are interested in assets.
      I'm hoping this open above fridays close