Thursday, August 2, 2007

AHM Shuts Itself

Let the real games begin folks....

American Home Mortgage to close Friday. This is a company that originated $58 BILLION in mortgages last year. This was an Alt-A and better lender and its demise should be a wake up call to the sanguine folks out there who think the problems are "contained".

Oddly enough, AHM rallied to $4.60 intra-day, but finished at $1.45.. then the kill-shot came and the stock plunged 50% after hours to 72-cents. As noted earlier in the week, the stock even trading above a-dollar was still not oversold from its fall from above $10 last week.

Odder yet, is that insiders were buyers of the stock this year:

So much for being able to value a stock... amazing that folks thought it was worth more than 10 last week, and now it's worth less than 1. That's not a judgement against the people who were wrong per se, but a statement about how one might throw their hands up in the air and give up on using traditional valuation measures.

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