I will say this, if the price drops to 4 before the next ex date and they don't buy back a large chunk of shares at a 20% discount plus the savings on dividends they are royal fools.
If they spent just 50M they could acquire 12,500,000 shares at price of 4. The value of those shares in accordance to book value is 62.5M for a gain of 12.5M in relation to stockholders equity. Now add another 2M for dividends not being paid on the 12.5 million shares if bought before ex div date. That's 14.5M total more in stockholder equity. The pool is reduced by those 12.5M shares to about 116M. $14.5M into the remaining shares results in a 12.5 cent increase in book value plus saves them at least 2M per quarter going forward on the dividend savings. Doubt there will be enough time to get that size of a block thuogh.
Ray, I see investment income of at least 12.5M and 8M+ annually in expense savings on a 50M investment, no leverage necessary. You think RSO could get that kind of yield/return leveraging up to 100M and loaning it?
How do you think a 500+ basis point rise in the interest rates this quarter will affect their holdings?
Ken, are you aware that in the same breath they announced that they were reclassifying all 2014 dividends as return of capital?
It may defer taxes on 2014 dividend income after having to file an amended return ($%&*). BUT, it will also result in a cost basis reduction for any shares that collected a 2014 dividend by the amount of the dividend they collected. That will come back to you as higher capital gains tax down the road if the shares are ever sold. I strongly urge all shareholders to google Return of Capital to fully understand the implications.
The main significance to me is that they didn't cover their dividend in 2014, not one penny. That 3.50 they paid out last year came from existing shareholders equity, and that is hacked directly off the book value. They may have declared all kinds of income for 2014, quarter by quarter, but it wasn't enough to cover one penny of the paid dividend. And it took them 6 months to figure that out????
I think they have some 'splaining to do. I just started a position here in a taxable account. I specifically had checked their tax treatment on historical dividends as an integral part of my DD. I would NOT have opened a position here if I had known this was going to be the case. I likely will be exiting very soon...
Hi Lunco. I agree 100% with your focus question. I understand about the loss carries and being a C corporation they have different accounting freedoms then the REIT sector. But no matter what it's tough to evade the question of why this was done. And that should be item number one that they fully explain...soon.
Are you saying interest rates are unchanged? You do realize the 10 year T has risen by over 400 basis points since the end of Q1, right?
You seem to be avoiding me. Is this thread going to suddenly vanish also like the last 2? Your posting history sure looks weak, but you are a brand new member of course.
What say you to the 400+ basis point rise in the 10 year T since the end of the last quarter?
Bear, the only thing I can come up with is that realized losses, not losses on paper, were greater then CAD income for 2014. No matter what I find this move and the delay to make this move highly unusual.
NEW YORK, June 18, 2015 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (NYMT) (the “Company”) announced today that its Board of Directors declared a regular quarterly cash dividend of $0.27 per share on shares of its common stock for the quarter ending June 30, 2015. The dividend will be payable on July 27, 2015 to common stockholders of record as of June 29, 2015.
I wish I could give you a plausible answer. However at this point I think it's management that needs to answer these questions. I see no positive in this for shareholders from my point of view at this juncture. Hope to be proven wrong, but I'm not going to wait forever either.
There may be a bit of contagion going on presently through the sector. A couple of the mREITS just reported (HTS, CYS) and they had more substantial comprehensive losses. Their book values both took a pretty good dive again. GRANTED they are mREITs and of different fundamental breed than RSO, but just being a member of the sector is all it takes to get caught up in the bath water.
Since MBS pricing has been on the decline, I'm anticipating another drop in asset value here of approximately 5 - 10%. Earnings I have not a clue on at this point. I'm still watching, not buying, until I see real improvement in black and white.
I hope everyone realizes your last dividend will ALL be ROC. I'm sorry, but I wouldn't touch this thing with a 20 foot pole after this report. GL, I hope you all get to keep your skins.
Ray, I'm sorry, but their accounting is the biggest smoke and mirror display going. At least last quarter they admitted how much of the dividend was actually (not)covered. They left that admittance out in this report.
I can't prove it, but I'm pretty sure I'm right. I guess the 1099 will reveal the truth.
Don't forget they still had a chunk of UTI, so saying this miss doesn't affect their present dividend policy is very correct. No biggie yet. Lousy quarter for all the REITs. Next quarter needs to show improvement which I personally think it will.