Municipal Mortgage & Equity, LLC (OTCMKTS:MMAB) On A Path To Recovery?
The OTC Markets is a diverse place. You can find all sorts of companies from sub-penny plays like Bio Matrix Scientific Group Inc (OTCMKTS:BMSN) who want to make it, but simply don’t have the resources to do it, through ventures like Aristocrat Group Corp (OTCMKTS:ASCC) who have one employee, share their office with a number of other enterprises and generally raise a lot of doubts around their success, all the way to serious businesses like First Mariner Bancorp (OTCBB:FMAR) and Municipal Mortgage & Equity, LLC (OTCMKTS:MMAB). The fact that the latter two are traded on the OTC board instead of NYSE or NASDAQ, however, means that things are not going quite according to plan. Yesterday we listed the obstacles that FMAR are facing at the moment and today, we’re going to focus on MMAB.
As you have probably guessed by now, MMAB‘s shares were also traded on a major stock exchange (NYSE) but back in 2008, they got delisted. If you don’t search for any further information, you would probably think that they got hit by the global economic crisis which eventually lead to the stock being featured on the OTC, but that’s not strictly the case.
While we were doing our research on MMAB, we stumbled upon this link in which we read that they failed to file a restatement of their financial results on time. More worryingly, we see that some investors alleged MMAB with presenting misleading information in their official SEC filings. This apparently was enough make traders lose all faith in MMAB and sure enough, the results are visible from the historic stock chart. The ticker plummeted and while at the beginning of 2008, the shares were traded at around $15, within six months, they were standing at just $2.
Then the price continued to plummet and by the end of 2012 the ticker was hovering around the $0.40 per share mark. With the beginning of the new year, however, MMAB started to regain the traders’ trust and they have performed remarkably well during the last six months or so gaining a total of 250%.
Yesterday something happened. A total of 639 thousand shares changed hands and the price dropped by 11% which might not sound that dramatic, but when you consider the relative lack of liquidity, you will see that it is quite a lot. This caused some confusion among investors who were quite excited by the 2013 performance so far.
They seem to be happy with the fact that the allegations from 2008 have been dismissed, the fact that MMAB are now current with their SEC filings and with the figures that they see in the reports. Here are the financials found in the 10-Q for the first quarter of 2013:
- cash: $57 million
- current assets: $1.8 billion
- current liabilities: $1 billion
- quarterly revenue: $23 million
- quarterly net loss: $2 million
Sure, they need to work a little bit on the losses as they do seem to be constant, but other than that, MMAB seem to be getting back in shape.
This begs the question: “Is that why the MMAB‘s CEO and President, Mr. Michael Falcone, bought around 65 thousand shares of common stock between May 16 and June 6?”. Looking at the message boards, we can see that quite a lot of the shareholders are happy with this fact and they think that this is a sign that Mr. Falcone truly believes in the ticker. Others speculate that a big buyout is about to happen. There is one more option, however – Mr. Falcone might want to sell some of these relatively cheap shares and make a substantial profit.
It’s anyone’s guess which is the scenario exactly, but we reckon that considering the risks is still something you should do before making any decisions.
