okay.. heres another for fail predictions.. I think the spo could obviously be any day now.. but If i had to guess it would be thursday and sometime around 4.50pm would be the announcement. If that doesn't happen i think a nice dividend cut to 0.30 should do the trick.. maybe in combination with a market pullback. Currently down on my short position 0.17 per share. To be fair, i'm pairing it against my short -210 contracts $25 put options on MTGE for APRI @0.55 for proceeds just north of $11k. So i am about 5% hedged against the total liability of the position at $25. TWO overpriced relative to MTGE by far. Last secondary of TWO was back in JULY.. July 12th the news was released.. about 35m shares it the market.. and interesting enough the stock price actually closed higher the next day. But my short of two is more then just trying to catch a free ride on the SPO. its a valuation call. I expect the spread between MTGE and TWO on a valuation basis to narrow... one way or another. So two makes a good hedge against a sizable MTGE position. They both operate much like one another and hold assets in both agency and non-agency paper. So it makes for a good pairing.
Do I hear the sound of a short squealing like a stuck pig? If you're so sure, why not short some more tomorrow? Surely if it were a good short 17 cents ago, it's a better short now!
The problem with shorting a high dividend stock is that you better be right about the timing or the dividend will eat you alive. If this prediction is as good as your last one and the run up to the dividend starts, then you'll have the choice of paying the div out of your own money or closing at a loss.
I won't say good luck, because I wouldn't mean it. But, as I say, I give you props for being willing to put numbers to your prediction. That numbnuts reikreik, who only recently learned how to turn off the caps lock, kept boasting about how much he knew, but when I pressed him to actually show us in real time he wimped out, and then he claimed to open a new short at a price the stock hadn't seen in months.
"For our stockholders, we believe Silver Bay provides an attractive total return profile that combines capital appreciation with cash flow yields generated from our leasing operations. The single-family homes in our portfolio were acquired a significant discounts to replacement cost. We also expect that we will see in most of our markets a mid to high single-digit annual capital appreciation on these residential assets over the next five to seven years as housing prices return to more normalized levels. When you combine this potential capital appreciation and rental yield, we believe our strategy provides attractive unlevered returns with inflation protection."
"Our third priority is to establish a credit facility and pursue other financing alternatives. Silver Bay intends to fund its property acquisitions through a combination of equity and debt. We intend to first deploy the cash proceeds from our IPO and anticipate that we will finalize a financing agreement in the near future. We believe that single family rental properties are an obvious and high quality asset to leverage, based on the underlying asset value and cash flow generation. Our plan is to prudently apply leverage to our portfolio. As our business matures and the portfolio approaches stabilization, we anticipate a moderate leverage target in the range of 30 to 50% loan to value, which is comparable to other publicly-traded equity REITs. We are currently involved in detailed and productive discussions with financial institutions who have demonstrated a strong interest in providing financing. We believe a measured approach is beneficial to our stockholders because lending capacity and pricing continue to improve as institutions in the debt markets become more comfortable with the industry and asset class."
I am confused.. one side they say "unleveraged returns with inflation protection" Then they go on to say... that they are going to "establish a credit facility and pursue other financing alternatives