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Anthracite Capital, Inc. Message Board

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  • dpsimswm dpsimswm Aug 13, 2009 8:23 AM Flag

    Is this the gamblers addiction message board?

    Ok. So, there is a little risk involved with this stock.

    However, the odds are like this.

    Full and Swift Recovery -> $9.00 per share (10% chance)
    -- This outcome is based on a reversal of the reserves for loan losses and full recognition of tangible book value in the stock price.

    Slow Recovery and Dilution of Shares -> $3.15 per share (80% chance)
    -- This outcome is based on all reserves for loan losses being fully recognized and shares being diluted from 80 million to 160 million total outstanding.

    Bankruptcy -> $0 (10% chance)
    -- The economy would need to sink into a great depression and we would have several quarters of negative cash flow and GAAP earnings.

    I think the odds look good.

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    • I agree with a few exceptions:

      I see a lower top in the best of situations due to already incurred stock dilution. That is, unless paydowns of debt translate into more funds available for future divies.

      Stocks rarely go to zero after going BK. You can probably count on recovering 10-25 cents per share when shorts go to cover.

      Hmm...I'd also say the odds are 10%/70%/20%