TMA is levered 5-1 on securities subject to margin calls. it would take margin calls on all $10B securities and a 20% loss on forced sales to get shareholders equity to $0.
hard to make an investment decision on the above. if you are so clear on the situation wouldn't you just back up the truck and buy all u can. have you looked at other co's in this business who went bankrupt. can you make a case that this co. is different?
wont try to catch a falling knife, but I will buy calls if it looks like they can meet the margin calls. they announced $500M in avaliable liquidity to meet them, thats all tapped out by now, lets see how the lenders will behave when they said they cant pay, even if they go into fire sale, who cares, the stock will price in the apocalypse giving people a chance to get in cheap. I cant possibly see they burning all book value. they sold HUGE amount of assets in aug and lost $1.1B. they got a $2B cushion plus earnings to deal with a firesale of $10B
wall street would like to force them to the wall so they they and their hedge fund friends can get their assets for nothing. they don't call it sharp practices. they call it business (ie geschaft)
really. these "wealthy people " are exactly the people who will walk way from a real estate deal using the best available lawyers to get out of the deal and at the same time maintaining their credit ratings.
you are right on the forced selling. the company accused the bankers of 'confiscating' their mortgage assets in august and are suing them right now, they didnt even disclosed who were the buyers of the securities, in a market where there was no bids they found to a way to sell the securities pretty quickly, thats very suspicious