At December 31, 2007, we had approximately $9.5 million in cash, and cash equivalents, a decrease of $41.4 million from December 31, 2006 and $64.9 million in short-term investments, an increase of approximately $58.0 million from December 31, 2006. We had approximately $98.4 million in working capital at December 31, 2007, an increase of approximately $51.8 million from $46.6 million at December 31, 2006. In addition, at December 31, 2007 we held $59.4 million in asset-backed securities issued by sub-trusts of two master trusts, Anchorage Finance Master Trust and Dutch Harbor Finance Master Trust, The rate of interest paid on these securities is determined at auctions generally scheduled every 28 days. If the amount of securities submitted for sale exceeds the amount of purchase orders in a particular auction, the result is a lack of liquidity and the maximum distribution rate of interest that can result from that auction. This has been the case with respect to recent auctions, including the auctions held during the three months ended December 31, 2007, and we cannot provide assurance as to when the liquidity in the regularly scheduled auctions will be restored. (see Item 1A. Risk Factors in Part II of this report). According to the offering memorandum for the asset-backed securities, an investment manager invests the eligible assets held by the sub-trusts in a diversified portfolio of highly rated commercial paper. We currently do not believe there is significant default risk associated with the investment portfolio held by the sub-trusts. Ambac Assurance, Inc. has the right to compel the liquidation of the portfolio of eligible assets held by the sub-trusts and compel the sub-trusts to purchase Ambac Assurance preferred stock. All interest payments due on the asset-backed securities have been timely made. Notwithstanding the recent illiquidity of the asset-backed securities we hold, we expect that, given our remaining cash reserves, our ongoing sale of Tower shares, and our anticipated refund from the settlement of our dispute with the IRS, our cash will be sufficient to meet our projected working capital and other cash requirements.
trollandticker Are you still following this stock ? if so what is your opnion now. This week Riley bought half a million shares, I am puzzled on the chance of 59 million that became illiquid. I do not have any knowledge on AMBAC mess and what effect it has on this security.
Wow, I guess they are no longer guaranteed by Ambac anymore. At least they corrected that language. Surprised they are not taking an impairment charge since they are trading at less than par. Actually, they are not trading at all but that obviously means no one is willing to buy at 100 cents on the dollar. Then again the 10Q is not audited. It will be interesting to see if they take a charge in their 10K. Is is likely that ABK's fate will be clearer by then. No real reason to be short and since they can't sell those securities. No deal and no reason to be long.
At least they sold 10mm of the toxic in the Q. At least they are still getting interest on it. After a quick reading of the balance sheet it looks like .75 per share of other stuff and 1.80 per share of auction rate securities. So in effect one is paying about 1/3 for the toxic and getting maybe an effective 15% yield on them.
Obviously the risk is in Ambac. I wouldn't be surprised if Riley etc. are hedging that out.
On a minor note: TSEM got smoked and they are down a further million or so since year end. They sold about 18% of their total position in the q.