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Thornburg still feeling the pain

The company finally filed its long-awaited 10-Q on Wednesday, but the quarterly report contained some dire news for investors and the market.

First, Thornburg received a notice from the SEC that the regulator is conducting an investigation into the restatement of the company’s 2007 financial statements, margin calls that it received, and how it marked the value of MBS on its books.

Second, the NYSE said that it is reviewing transactions in Thornburg common stock prior to the company’s January 9, 2008 disclosure of the impact of recent market events in the mortgage industry on the Company’s GAAP book value.

As if the legal woes weren’t enough, Thornburg still faces significant liquidity challenges, trotting out the dreaded “going concern” warning — particularly if the interest rate on its senior subordinated notes is not reduced. To reduce the interest rate on the notes, Thornburg has to get an extension on the tender offer for its preferred shares; it also must get two-thirds of each class of preferred stock to be tendered.

And judging by the venom spewed on last week’s earnings call, TMA has a very steep battle ahead. Shares of Thornburg tanked on Thursday, dropping 65 percent to just $0.23/share; they were up 2 cents to $.25 per share Friday morning.

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