$1,219mm in book value last quarter. Of this $375mm was intangible assets and/or goodwill. If you wipe those out you are at $844mm. The $365mm reserve strengthening should be offset for a $65mm US tax benefit assuming 35% on $185mm in US operations, for a net of $300mm. That leaves you with $544mm in book value divided by 57.432mm shares equals $9.47 in book value.
This can obviously be adversely affected by future losses, downgrades, etc
Given that they seem to be wiping out all of their past income, I would disagree with your assuming a tax benefit from the 185mm. If you do not take that into account, you wind up with a net book value of around 8.50.
I based this off of looking at prior tax paid to check whether it was likely realizable. Look at their 2012 annual report. In 2010 Tower paid 55.763mm in federal tax, 28.309mm in 2011, and received a 18.423mm refund in 2012. The net of these is $65mm and those are all open years where they could carry back an NOL or amend a tax return to claim back taxes that shouldn't have been paid.
Better sell first. To raise capital they may issue new shares with lower price than the prevailing price. No fund mgr will subscribe at higher price. You can buy back at lower price, after the new capital raising exercise is completed. Just wait for next few weeks when they announce the price of new share.
the panic is over, that was back in August(those were the rats telling you the ship was sinking), this is clearly a get out NOW if yo want any of your capital remaining the ship is seriously taking on water.
I wouldn't sell at $5.30 that's for sure. It's going to be tough to get out of this at or near book value anytime soon. I'll wait for earnings and the conference call to make up my mind, but I can't imagine selling into the panic is a smart move.