What a joke! Company issues an 8K amending the 8K it issued last week that included the preliminary financials -- balance sheet and footnotes. Nothing else.
Funnier yet is the amendment. They deleted the very last sentence of exhibit 99.2, that said :The company is currently unable to make an estimate of the financial effect to the company as a result of the A. M. Best, Fitch, and Demotech downgrades."
Got that? They have eliminated the sentence. So now, presumably, the SinkHole managment has some idea as to the financial effect. In fact, today's 8K says that they are amending the report because they have indeed prepared internal projections in the course of its assessment of strategic alternatives. Of course, they are not disclosing what those internal projections are, leaving us all to guess. And I am guessing that the internal projections are not very pretty!
Regarding the special filing simply to remove the sentence. Why would they do that? It seems such a minor thing and completely plausible. I suppose they either knew then and are recanting or have learned more so they know good estimates of what this will do to them. Either way it probably does not matter. You would think that if they learned something positive they would have just let it lie, so that makes me think it is even more negative that we have originally been led to believe. And they are not yet disclosing what that is. Perhaps now they have been told that the companies that are doing the reinsurance agreement to prop them up are backing out? Or they are already seeing a consequence and don't want to be caught "lying?" Or maybe there is a company that is going to buy them and that announcement is coming, but they did not want that statement in there for their own protection somehow. Actually I do find this curious and do not know the answer. Just guessing.
I wouldn't read too much into it. They have a handful of sharp people putting these things together and there is usually kind of a fight with senior management who wants things presented in a certain way which leads to tension (long hours and continual review of material add to it to) and minor things get missed.
After filing someone said, that statement could arguably be misleading, they spoke to some people at their public accounting firm and then they amended it.
They have projections for all sorts of different scenarios. They don't really know how things will work out either although they certainly do have a better idea than the market. It always amazed me how little information actually leaked out and how perceptions could be so far from reality. Everyone is in the dark, there is no getting around it.
Tower Group guided to releasing Q2 earnings by November 29th.
You call this 8K release a "joke". I would have to argue that not filing this amendment would be a "joke". They have a better idea of what the downgrade effects will be, not amending this 8K with regards to Mr. Lee's most recent letter would be in bad faith.
I don't think your guess about the projections not being pretty are wrong. I also think that if anyone doesn't think that this quarter is going to be ugly hasn't been paying attention to TWGP.
I continue to believe that this stock has intrinsic value of more than 50% higher than where it is selling at today.