The losses today in the mREIT sector (REM) are shocking, but you should have seen the tape a couple of hours ago.
At its low for the session, MFA Financial (NYSE:MFA)
was changing hands at $1.50 per share, or an annualized yield greater
than 50%. The stock more than doubled to close at $3.67, down 13.5% for the day.
Chimera Investment (NYSE:CIM) traded as low at $6.42 before issuing an update
saying the company has been buying back stock, executives have been
buying stock, and there are no funding issues. It managed to rally to
$9.99, still down 18.2% for the day.
Just to pick one other, Ellington Financial (NYSE:EFC) touched $3.24 today, and got back to $5.50 at the close, down 24.7%.
These three and the rest of the sector continue to
trade at highly distressed levels of 50% or discounts to book value
(and the securities they hold tend to be pretty liquid, particularly as
the Fed is buying MBS).
Previously: Existential threat for leveraged rate plays (March 18)
https://seekingalpha.com/news/3553116-mortgage-reits-back-from-brink
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