RE:RE:Anybody watching this?Very good question.
The companies financials do not reference a Book Value (or NAV) per share.
Their YE 2014 statements indicated a NAV of $9.30 per share. A recent research report form RJ indicates they traded at 94% of BV when shares traded in ~$8.55 which equates to ~$9.10 per share.
This is where it gets interesting.
The shares pay out $0.582 in annual dividends. Earnings per share in 2015 were $0.51 (overdistribution by ~7cents) so the difference errodes BV per share.
6 months YTD Earnings per share is negative $(0.01).
It is negative $(0.10) in the last 3 months vs quarterly dividends of $0.146 per share. This would further errode BV by ~$(0.25) per share. I would suggest this errosion accelerates because revenue from mortgage interest is declining faster than expenses due to siginificant fixed platform costs.
The announced special dividend of $1.981 per share is a return of capital and therefore should direcly correlate to a reduction on Book Value per share. $9.10 less the distribution is $7.12 per share. From this we would project a quartly reduction in book value based the combination of distributions and earnings which was -$(0.25) per share in Q2. This will occur as long as mortgages are outstanding.
As of Q2 the companies financials indicated approximately 2/3 of mortgages mature in 2017/18. Now these loans could pay off early or be sold at par/discount/premium) to face value in order to speed the process up.
Calculating whether the shares are trading at enough of a discount will depend on your assumptions for timeline of the windup.
Be aware that after the Sept 30th record date, the share value should drop materially and by approximately the amount of the special distribution. Going forward I think investors should view the distribution as a return of capital which reduces the book value of the shares.
I'm interested in any other analysis or views on how this could play out.
Good luck