especially when the general mkt dropped almost 1%.
The main risk for CIM now is the mat risk, but with CIM's dividend, you will end up doing better than the market.
This market has not rewarded any small earning beats recently (only those beats by 2 stds will be rewarded), considering people's misunderstanding with CIM's earning, it actually has done pretty well.
This just reenforces my point. Reverse splits are done by companies who are in trouble and don't have any other options. It does nothing to bolster the value of the shares and is seen as an indicator of poor financial ability. Go read about reverse splits and come back...we'll "talk" some more then. Try Investopedia or just Google it...not difficult.
Why a reverse split will cause pain? You think it will go down, right? So you actually short the stock?
Only High frequency Traders will like low price stocks a lot, since they have limited capital, so the more shares they could trade, the better (their major source of income is the rebate from the exchange based on how many shares they have traded a stock).
For retail investors, the brokerage commission you pay is kind of proportional to the shares you traded (I pay $5 for up to 5000 shares at Etrade, and I get 10% commission rebate if my volume is good). So rational people would prefer a reverse split.
Price of $4 or $28 doesn't mean too much to me, what I am really after is how much those $4 or $28 could earn in a quarter, in a year. Based on what I know, the $4 from CIM makes about 18%, the $28 from AGNC makes about 20%, but CIM has lower leverage, so theoretically safer.
With that said, there exist a issue that some funds could not buy stock whose prices are below $5, that is a disadvantage for CIM. But also means if you do your research, you will be rewarded more.
CIM's L1 book, bid size goes from 500 to 5782, ask size from 12k to 9115, things are improving...
As I said, the event risk (from earning) is over, the major risk from now on is the market risk, and I certainly believe that CIM's beta is less than 1.
Watch the L1 book for CIM for the past 10 minutes, we have offer size >> bid size, but no price drop ==> means we have big secretive bid somewhere, read the tape ....