Sunday, July 29, 2007

IRONY Index Rises as AHM Investors Complain of Missed Payment

In a shocking move to those holding AHM (American Home Mortgage) stock over the weekend, AHM announced that it would have to 'delay' a dividend payment. (See link to Reuters article at bottom.)

"Investors expect to be paid their dividends on time, as promised" said one investment banker whose fund leveraged a disproportionaltely large share of AHM in their 'Guaranteed High Returns' fund. "When I buy a stock, and that stock announces a dividend, I have an 100% expectation that the dividend be paid, and on time. " he said. Further: "The market, as we know it, is simply going to break down and grind to a halt if institutional investors are forced to examine whether each particular company they are involved with has the ability to make good on it's promises."

He concluded with: "I know that AHMs customer base generally provided little documentation proving their ability to pay, but I banked on that dividend announcement filed with the SEC. As a sophisticated investor who manages billions, I do not expect to be exposed to this kind of risk. This is an unexpected outrage."

Link to Reuters article follows:

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