Tuesday, March 13, 2007

Rapid Rise, Faster Fall / the new century saga / WSJ

i have also listen to the call from november and it was a desaster. the stock was around $40 even after the call.......

i habe mir ebenfalls den call vom november angetan. ein einziges desaster! bin fast irre geworden als die aktien nach dem call immer noch bei 40$ notierte....

take this as an example from the call
The company repurchased 992,500 shares of its common stock during the third quarter of 2006 at an average price of $41.66 per share for an aggregate amount of $41.4 million. Since the inception of the stock repurchase program in November 2005, the company has purchased an aggregate of 2.4 million shares of its common stock in the open market, at an average price of $39.60 per share (today 38$, round about 25% of the shares that new bought back were sold at the same time from insiders)

During the third quarter of 2006, the company issued 2.3 million shares of its 9.75 percent Series B Cumulative Redeemable Preferred Stock at $25 per share and also completed a $50 million private placement of trust preferred securities (thats the new mantra, borrow to buy back stock...../die neue realität. verschulden um aktienzurückzukaufen.....)

the company sold $410.0 million of non-prime mortgage loans during the third quarter of 2006 at an average discount of 12.9 percent of their outstanding principal balances compared with $415.1 million for the second quarter of 2006 at an average discount of 5.0 percent. (this looks like a crash!)

i suggest to read the post from november (including a very good link from russ winter who was on top of the desaster ) when you want to shake your head. http://tinyurl.com/yreyb2

now i know what the shorts from pets.com went through before the bust.

nun weiß ich wie sich die shorts von pets.com vor der implosion gefühlt haben müssen....

the only way to hide the mess would have been an attempt to report in mandarin etc.....wall street and all the analysts have really no excuse

die einzige option wie new century hätte das veschleiern können wäre gewesen wenn die in mandarin berichtet hätten.... wall street und fast alle analysten haben nüchtern betrachtet keine entschuldigung und auf der ganzen linie versagt.

....In November 2006, the Center for Financial Research and Analysis, an accounting research firm in Rockville, Md., flagged concerns about New Century's third-quarter earnings release.

CFRA analyst Zach Gast noted that the company for the first time had lumped together two categories of reserves, one for losses on defaulted loans and a second for losses on real estate that had been acquired through foreclosure. Combining those two categories allowed the company to show a small increase in reserves from a quarter earlier, he wrote. But that masked a decline of 8.7% in the reserve for losses on soured loans, to $191.6 million, he calculated.
Mr. Gast found it curious that New Century was lowering reserves at a time when defaults on subprime loans generally were surging. Had New Century maintained reserves at levels comparable with the second quarter, he estimated, earnings per share would have been at least 50% lower than the $1.12 reported.


At an investor conference on Nov. 28, New Century's co-founder and chief executive, Mr. Morrice, said that despite the subprime area's problems, New Century was "well-positioned to compete and continue to profitably grow market share."

Patti Dodge, an executive vice president, added that the company would continue to enjoy adequate liquidity thanks to "strong relationships with...Wall Street lenders."

dot.com reloaded!

here is a piece from rodger rafter who listened to a new confernce call in 2005.
hier ein wirklich brilliantes teil von rodger rafter der bereits im jahr 2005 nur den kopf geschüttel hat.

"Finanacial Fantasy Land" http://tinyurl.com/2vyr8j ( brilliant)

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