If they'd waited a while for the dust to settle before issuing shares discounted to price, the shares might well have been significantly higher(hard to imagine 'em much lower) and the dilution less. I just don't understand it. Are we now going to see a flurry of shareholder suits because of this stupid move? Just what this fragile new union needs. . .
"The fund does NOT hold and has NEVER held subprime mortgage debt. They only purchased investment grade corporate debt."
That's funny, when I finally took the trouble to study the prospectus last November just before bailing on this fund I was shocked to see HUGE exposure to mortgage related instruments, some with maturaties of 12-15 years. Much of the short-term stuff may have also been mortgage-backed without it being expressly stated.
One thing you can bet on- they are down to the dregs by now. anything left now is probably the most worthless junk of the lot, as they had strong motivation to sell the good stuff first to limit impact of redemptions on NAV.
Chart is now looking like a death spiral.
refreshing to read actual relevant posts. My shares came with the ATRX aquisition and I have not done well with my GTC sell orders of late. I have to admit I'm tempted to follow your lead at this point as the slide is clearly powered by its own momentum and has got to be overdone. Pathetic management, though, to ever have let things deteriorate to this degree.
That's just it, investors are NOT keeping their money here. Most of the loss of NAV is due to forced selling of assets at deep discounts to book in order to cover redemptions. THAT portion of NAV is gone forever. Total assets are probably just a few billion now after having been 13 $Bln less than a year ago. Loss of NAV accounts for only a few percent of this- the rest is due to capital flight. Any recovery of NAV will be limited to remaining assets recovering toward par as they mature. Also, ask yourselves this, would they have sold the good stuff first or the junk? I'd guess the good stuff to disguise just how bad things really were. Good Luck.
In response to the last two posts- I don't believe Schwab has the authority to roll investor's shares into another fund, as that would be tantamount to investing holder's money without having received an order to do so. They do have the authority to cash out the fund and make it go away forever.
I suggested that the majority of the money would find its way back into other Schwab funds because the cash would appear in Schwab accounts and most people would be more likely to re-deploy it within Schwab than without. As negative as the SWYSX experience has been,most clients in this fund are older with a bias toward fixed income and they are fairly loyal to Schwab. Sure, some would leave in a huff, but most would do what is easiest. The point is that Schwab would not view loss of revenue as a major impediment to retiring this fund.
I would think that the loss of 1/2 of total assets, primarily due to an exodus via redemptions, would argue for terminating the fund.
The presumption is that proceeds would generally be re-deployed in other Schwab funds, so I don't think they would regard it as lost revenue. Yes, they would have to liquidate all assets in the fund and many would have to be sold at deep discounts in the current market. I, for one, would not put THAT past them. A big question in my mind has to do with actual current assets. Propriatary info, of course, but what if total assets are down to 1/2 of the high of 13Bln$? Just how much are these guys sweating right now?
I would not be surprised were Schwab to quietly retire this fund sometime soon. The premise upon which it was established, stable NAV(capital preservation) with better than average yields, has broken down completely. There is now no way for the NAV to return to the $10 range at which it was started up. I believe that Schwab retains the right to dissolve its mutual funds(someone please correct me if I am mistaken). SWYSX is forever going to look pretty bad to anyone who takes the trouble of researching this fund's history before investing any capital they want to preserve.
So one day holders of the fund may wake up to see that it and all record of it on Schwab.com have disappeared, and that a cash deposit has been added to their account for their share of the assets after they have been sold off. Then, at least, you will finally see the REAL net asset value is! Any guesses what it would be in today's market?
This is like a bank-run in slow motion(bank-crawl?). One wonders what the NAV would be if all remaining assets were re-priced to reflect their actual value in today's market, and what total assets would look like if you could see current info. The NEXT semi-annual report will make for an interesting read. And are these guys selling the best stuff to cover redemptions? This strategy would tend to preserve nominal NAV because the good stuff can be sold at little or no discount(no discount=no impact on NAV). One thing is for sure- the only way back to a $10 NAV on this dog is a reverse split.
Oh, and just imagine what Bush's five-year freeze on interest-rate re-setting will do to the market value of mortgage-backed securities that were promoted on the huge expected returns.
The newly-released prospectus does dot even hint at the crisis this fund is experiencing. Still described as follows: "The Schwab YieldPlus Fund� is an ultra short-term bond fund, designed to offer high current income with minimal changes in share price." Indicates a YTD(9-15-07) total return of almost 3%. What a hoot!
Really, I think they should have appended at least a note about the mass redemptions now underway, or some hint of the incredible exposure to sub-prime mortgage-backed assets and more recent declines in NAV.
I took this experience as a lesson in the importance of due diligence. I bought at 9.71 after a cold-call from a Schwab rep who described this fund as buying only high-quality, very short maturing bonds and that the NAV would be kept very stable with the emphasis on maximum yield. I was convinced to shift 1/3 of my SWVXX holdings on the promise of better returns. I did not take the trouble to actually read the prospectus.
When it began to drop I assumed that it would regain lost ground when bonds that had lost net value returned to par as they reached maturity. It did not occurr to me that a fund with average maturities under 6 mos. could have significant exposure to mortgages.
When the NAV kept dropping I finally did what I should have in the first place- I read the most recent annual report and discovered with dismay that 44%+ was mortgage-backed and that many, many very long-term bonds were in the holdings. Finally, I realized that the decline was due to discount selling forced by mass redemptions by Schwab clients more astute than myself and I sold at a 4% loss of equity- a net zero for the year.
Who is to blame? Yes, there was some marginal mis-representation, but I was lazy. I'd have been the first out had I been aware of the absurd level of exposure to the mortgage market.Caveat Emptor!
A $14/share reduction of my Atrix position would be about right for balancing the portfolio- any idea when this is likely to happen?
Then again I'm not sure I'll be as comfortable with an equal number of QLTI's. If the message board is any indication, QLTI's is dismal. Maybe it's time to dump the lot.
The conversion rate is at a 40% premium to current pricing, indicating a strong belief on the part of the investors that SIRI will soon exceed that, and constituting a concentration of value, not a dilution. If the conversion never happens, 2.5% is like free money. What is to cmplain about here??
Let's just hope they don't get too cocky, an FDA denial would really create a mess. I was actually a little concerned when they submitted for 6-mo Eligard. Can't imagine why anyone would prefer this over two 90-day treatments. I'd want to keep my treatment options open, not to mention insure lesser consequences in the event of an adverse reaction or revised diagnosis. That said, they do seem to know what they are doing and I'm betting on continued success for Atrix.
On the other hand, you make a hell of a good argument for contrarians to load up on PECS!
So how about a few symbols for stocks that shine when judged by the CANSLIM criteria right now?
Which I though would take us down harder than it did. Here's a link
It may be that this would be used in conjunction with not in lieu of horomone supression. Anybody know?
If everything is so rosy why did Atrix warn in the first place? I've been a (too) faithful shareholder and, of course, I'm relieved that the earnings report is so positive, but I don't understand why we had to go through the recent trauma. We should be solidly in the $30's now instead of having to recover all the lost ground.
Is it a given that Atrix will be in the black in 2004? Does the company have underlying strength that was not evident during earlier slides in the stock price? Have the institutions whose radar screens ATRX had just made it onto, and for whom it was just beginning to be a "darling" turned away completely, or are they still watching for an entry point?
I feel that, in the long run, the greatest real threat is a major FDA rejection. I know I would opt for two 90-day treatments vs. one six month treatment even if it were available. I almost wish they had stopped trying to extend the treatment interval and instead focused upon building market share with what they had in the bag.