I agree with everyone that they should float the shares at a higher price. But the problem is that there will be a big hit to earnings once the preferreds reset to 9%. So how is the share price going to go up if earnings go down?
Seems to me there are only two options:
1. Sell the company - the WSJ had an article a week or two ago about small banks facing the TARP resets and the only option for many is to put themselves up for sale.
2. Float the new shares now, redeem the preferreds, and resume the dividend. This option gets some new investors involved and maybe some support for the stock too (along with reinstating the dividend).
Because the TARP preferred resets from 5% to 9% this month. They want to redeem the preferred as opposed to taking the hit to earnings. At least this is my understanding.
Don't know. Don't want to speculate, but probably difference of opinion, philosophy, cost, or whatever...
We know who calls the shots here, so not a surprising situation.
3000 shares traded and off 3%.
Interesting that if this goes back to 200 or below, and they report in a month that book is close to 400, we'll back to 50% of reported book value.
Agreed on NWLI. Such a potato chip.
Be aware that ITUB reports next week. Also, the ADR looks like it tracks ITUB4, which are the preferred shares. ITUB3 are the ordinary shares on the ibovespa exchange.
I've been buying ITUB - Brazil's largest bank. Currency, inflation, Fed taper...all weighing on EM in general. Stock is down 30+ percent. A long term view is needed.
Earnings are out. 42 cents per share. Complaining of interest margins and price declines in bond portfolio.
No mention of the share offering. Would think that would be happening soon.
I'm certainly not an expert on AGO, but the biz they are in is a little bit more complex than many think. They are in the insurance business...they will have losses when the insured bonds default. But that initially means they just have to pay the interest on the defaulted bonds. Then there is the whole bankruptcy and recovery process, which AGO seems to be very adept. And they also have to reserve these risks, so I think there is a lot "baked into the cake". At least that's my simply take on the situation.
I believe they also just reincorporated to being a UK-base company for tax purposes and some of the analysts that follow says that could be a major positive. I guess we'll see...
I'm surely not saying that PR is not a big deal...it definitely is. My hopes are that some of the 1200 investors that showed up at PR's investor conference can come up with enough loots to tied them over for a while. They'll have to pay a high rate, but geez if they can get 5 billion I think that would calm things down a bit.