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Chimera Investment Corporation Message Board

  • nickspinner@sbcglobal.net nickspinner Mar 28, 2013 8:06 PM Flag

    Why did CIM tank today?

    Any thoughts?

    Sentiment: Strong Buy

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    • Ex Div. Date

      • 2 Replies to accruzing
      • Your explanation based on a widespread misunderstanding of the X-dividend date may very well be right. However, organizational and strategic decisions by NLY, which strongly affect the CIM stock price, are also a possibility.

        NLY is seeking to reorganize by moving all management employees into a separate company, leaving NLY with no employees of its own. The plan is to be put to a vote by shareholder, who will be incentivized to favor the plan by an assured reduction in the management fee as a percentage of total assets. However, since current management is not going to propose a plan to reduce their current income, they must expect NLY total assets to grow by a sufficient percentage to more than offset the fee reduction.

        The management arrangement may also be linked to the future of the FIDAC subsidiary that currently manages CIM. One of the possible outcomes from the financial reporting fiasco is to let FIDAC absorb all the blame, and then have it enter bankruptcy. By virtue of the agreement with FIDAC, CIM would be forced to cancel the management contract, leaving CIM without a manager. The new NLY management company could then pick up the ball, or CIM would be quickly absorbed into NLY. If CIM was forced into a shotgun marriage with NLY, the acquisition price would not be as high as some are expecting. Alternately, CIM could be forced to find another buyer under distressed circumstances.

      • Yep, Divy players got out today. Taking their 9 cents per share and runnin to the next stock. Not a bad strategy tho as I've done this myself a couple of times. CIM has such a high yield that its played this way and should be expected during the next round as well. Look at historical prices and 1-2 days after ex-date you'll notice losing days. THOSE are the days to reload if your long term.

        Good luck.

    • Well my thought is, tomorrow is potatoe planting time and I was cutting potatoes most of the day and I presume everyone else was doing the same, I got in at the bell and added a small @ 3.19, brought my average up to $2.98 I think. Good Luck.

 
CIM
3.110.00(0.00%)11:12 AMEDT

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