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capeman
ParticipantI believe Beazer and Centex are going to go in the near future. Beazer is unable to pay creditors with them knocking on the door with the heavy hammer. It’s only a matter of time. Centex likely looks to be running out of cash real quick it’s a big concern month to month of if they make it out alive.
ParticipantI believe Beazer and Centex are going to go in the near future. Beazer is unable to pay creditors with them knocking on the door with the heavy hammer. It’s only a matter of time. Centex likely looks to be running out of cash real quick it’s a big concern month to month of if they make it out alive.
ParticipantI believe Beazer and Centex are going to go in the near future. Beazer is unable to pay creditors with them knocking on the door with the heavy hammer. It’s only a matter of time. Centex likely looks to be running out of cash real quick it’s a big concern month to month of if they make it out alive.
ParticipantHow about… “Jumping on the REO Speedwagon”…
ParticipantHow about… “Jumping on the REO Speedwagon”…
ParticipantHow about… “Jumping on the REO Speedwagon”…
ParticipantAdvice- Don’t buy a condo in this housing environment. It is a financial deathtrap. Likely you’d have to look at keeping it for 15-20 years with current market expectations.
September 13, 2007 at 11:58 PM in reply to: The Federal Reserve’s actions amount to a massive bailout and market propping scheme. #84517ParticipantYep, and our tax money is going to that… all money loaned out at this point to keep these POS companies going is never coming back. Bankruptcy will be the outcome and funny how the Corporations can wipe the slate while the average Joe Bagholder will be indebted for 5+ years in a Ch. 13. Thanks Bush!!
ParticipantThat is a bunch of BS. He knew exactly what was going on and let it happen by keeping rates low. If he actually didn’t know then I would say at least half the people on this board are more qualified to run the Fed than he was!
He’s just going to pull what many before him have when brought before Congress after this whole mess breaks…. “I don’t recall ever having that knowledge… I don’t recall anyone telling me about the problem…”
ParticipantYeah, I really WANT to live in my very own house in San Diego and even though I am in the top 5-10% in median family income I can’t reasonably do it. This rollercoaster is just getting started.
ParticipantI am 50% long in what I believe are undervalued (my opinion) stocks and 50% short in turd stocks that will likely be BK shortly. Then I shall roll the short positions into longs in what will be even more undervalued stocks.
ParticipantAlright, now I am understanding you. You are emphatically stating the deal is not floorless on the basis of conversion. I think we had a miscommunication there.
My point on this and a big reason I am shorting what is the effect of never converting the preferred shares into common stock. What if there is a case of liquidation at a value of 1/4 to 1/2 of current market cap? At that point preferred shares command payment first in the event of a liquidation and without the conversion they get dibs on the first $2B in assets. At a common share price giving a market cap of $4B BAC would effectively receive 1/2 of CFCs assets in a liquidation. At $8B (optimistic in BK) they would receive 1/4 of CFCs assets. The effective ownership of the company is moot since CFC is now a carcass and BAC has preferred. The common shareholders get bent over and paid next to nothing while BAC gets the heart.
ParticipantYeah and when you just got preferred at $18 and you’re seeing $26 the next day you short the shite out of it. Sitting on your hands won’t make you any more money and investors don’t like to sit on their hands when the Benjamins are dangling in front of them.
Here is a bit of discussion on the topic…
http://www.tickerforum.org/cgi-ticker/akcs-www?post=4728&page=1
ParticipantDave,
Fact of the matter is, yes you have said that many times now, but you have not produced the documentation specifically and literally supporting your argument. There is NO legal wording in the 8-K that legally binds BofA against being allowed to hedge the investment or specifically stating what a “certain event” is. If you were a BofA shareholder and you saw the firm making that kind of investment in a near dead horse you are expecting that they hedge. If they don’t when it is perfectly legal and deters some of the risk of the convertible, they will piss off many an investor/shareholder.
I can guarantee that with the current legalize (or lack of!) in the 8-K, if CFC does go BK, BofA with preferred shares will be getting “1st” dibs to $2B in equity at the value of liquidation. Since there are not any other noted “Preferred” large shareholders the first $2B goes straight to BofA if there is $2B at all. If the liquidation value is less than that then BofA will have a legal course for recovering the CFC loan servicing unit which is the only piece of CFC of any value. Add to that the ~7% on the convertible they were collecting and the ~25% or greater hedge and it is a low-risk win big investment by BofA.
If you provide written documentation prohibiting BofA from doing any of this please present and I will eat my words. If it is not specifically prohibited and legally bound it is a loophole and you can bet your money they are exploiting it. That is what these companies do and why they have $200+Billion market cap. That is their business.
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