CIM is issuing 115 million shares for a reported proceeds of $360 million.
It shows they do not care about existing shareholders that purchased shares at $3.50-4.50 per share.
I realize companies are always issuing shares in this sector but this discount to FMV dilutes existing shareholders. They have to pay out the dividend on these new shares for the next quarter even if they have not put the money to work.
They are also selling the shares below the current book value which means they are selling shares below the carrying value of all assets.
Comments by existing shareholders?
If you watched the after market action, which made no sense then, they reasonable guess is that the spikes were used for the funds to short CIM allegedly by management-fund connections. It is hard to fight mafia traders without SEC entry, facts, and speculative thinking---but patterns suggest a scenario not friendly to shareholders' best interests, in any case. Psychologically these criminally smart people can make us money in dividends, however. Buying dips is the new market for CIM prior to dividend payments---pattern is there too. VIEWER's comments?
Let me buzz in here, this is a very speclative play here, the Govt is playing games with fanny & freddy Mae, taxes are hidden, confidence in the govt is NILL,, all this reflects the PPS here,,,but we must try to make a buck even with this one, Right?
GLTA, but read this,,
Should you want to verify this, go to http://www.thomas.gov/, enter "HR 3590" in the search box and look for "CRS Summaries." This is what you'll find.
Title IX Revenue Provisions—Subtitle A: Revenue Offset
"(Sec. 9002) Requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee's gross income (excluding the value of contributions to fle xible spending arrangements)."
Starting in 2011—next year—the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided. It doesn't matter if you're retired. Your gross income WILL go up by the amount of insurance your employer paid for. So, you’ll be required to pay taxes on a larger sum of money than you actually received. Take the tax form you just finished for 2009 and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That's what you'll pay next year. For many it puts you into a
much higher bracket. This is how the government is going to buy insurance for fifteen (15) percent that don't have insurance and it's only part of the tax increases, but it's not really a "tax increase" as such, it a redefinition of your taxable income.
Also, go to Kiplinger's and read about the thirteen (13) tax changes for 2010 that could affect you.
Why am I sending you this? The same reason I hope you forward this to every single person in your address book. People have the right to know the truth because an election is coming in November. So, vote intelligently, based on your values. But also adjust your tax withholding, or increase your savings, so that you aren't surprised and put in a jam when your federal income taxes are due on April 15, 2012.
Fight organized crime! Re-elect no one.
I think you misunderstand what the reporting purpose is of HR 3590...
The aggregate cost of an employee's health benefits will not be included in the employee's taxable income. Rather, the reporting will be a way to verify medical coverage for the mandates. Also, the W-2 will be a way to track coverage values for the excise tax (starting in 2018) on medical coverage above the thresholds.
He divided the proceeds by 115 million shares, but the 15 million share over-allotment is excluded from the proceeds. The issue price of $3.65 netted the company $3.60 after expenses, or $360 million. Assuming they can make sound acquisitions with this money, the issuance of shares will be accretive to earnings, so the divvy would not be adversely affected by the new shares, and in fact it could increase.
All this, of course, assumes they have fairly valued their assets and that further write-downs or write-offs will be minimal. Until the housing market further stabilizes, asset appreciation will also be minimal.
I looked at the last news item which was an SEC filing. I see from that filing that CIM was issuing 100 million shares plus 15 million shares, but it appears I assumed that the $360 in proceeds included 115 shares and that may not be the case.
Still it looks like they sold for less than book value.