Tuesday, January 08, 2008

Countrywide Market Cap Nearly Equals Value of REO Portfolio

Countrywide market cap after today's plunge: $3.94 Billion $3.30 Billion
Countrywide REO portfolio valuation: $3.09 Billion

Say goodbye, folks.


Perfect Storm said...

I like it when big guys fall because they make a louder noise!

Anonymous said...

These pigs are getting slaughtered!! They will be a part of BofA soon

Rob Dawg said...

Wait, don't assets exceeding cap make stocks a buy?

Max said...

Wait, don't assets exceeding cap make stocks a buy?

Or the market doesn't believe the company's valuation of those assets. But you knew I would say that. :)

Gwynster said...

LOL Max. I have a very simple answer to anyone thinking CFC is a buy now that's hitting it's portfolio value:

"you go first >; )"

Rob Dawg said...

Yes, it was rhetorical. Remember i was the guy who broke the Countrywide REO house a dozen miles from corporate HQ that included free used condoms and empty whiskey bottles.

CFC may not be a "zero" because it has a working bank and very lucrative servicing arm. It all depends upon who gets what. I suspect the Bank is spun off and the insiders get the servicing unit and they put all the crap in a basket for the rest to make sh¡t sandwiches.

Funny: My verification: jlPOO

... said...

Those 2 items shouldn't be directly related as the value whould be related to CW's ability to make a profit. . . but IMHO they are overvaluing their OREO inventory unless they discount 5% for marketing, 1-2% selling costs, 5% discount and 3-5% carry - 15-20%, hell, maybe 50% if I were a regulator.

Most of 'em have no utilities on and the lawn is beyond dead. Its not like these homes are the typical home made ready to sell.

Of course, Zillow can't see all that, can they?

... said...

I've been watching their stock price - ugly.

But if other things I've heard, like raising the conforming number to over $600K (3 years @ $417K doesn't work for CA) and dropping the PHeD discount rate towards 1% like 2002-3 you might see an immediate pop in their stock price AND immediate bump in sales volumes in the housing market. Right now nobody can sell loans above $417K unless walking on water is involved.

Josh said...

Well, the one you can drive a truck through is the point Tanta made when I first did a CFC post months ago. One of their responsibilities as a servicing company is the discharge of foreclosed assets. Just because it's in their REO inventory doesn't necessarily mean they own the house. Still, the comparison is interesting just to illustrate how far they've fallen.

Perfect Storm said...


OREO inventory is valued at the lower of cost or fair market, so your 50% sounds just about right, which reminds me.

Were right on track for a 50% decline by 2009.