Stephen Frankola sends: I wrote last week about my trading of Thornburg (TMA); I bought a position at $1.35 and sold a third of that position near $3. I decided to let the rest ride this crisis out.

However, today, I couldn’t resist putting my hand back in the cookie jar. I bought back the shares I sold at $1.62.

Once again, just like the first time I bought it, TMA has had a huge intra-day fall. Today, it was on news that I thought wasn’t bad - it made a deal with its lenders that allows TMA to stop having to sell off its assets.

The deal today did directly dilute shareholder value - it gave the lenders options to buy about a quarter of the company’s shares for $.01. But at the same time, it may have allowed TMA to avoid losing even more value, through the sales of its low-risk, quality mortgages at bargain-basement prices. The deal made lenders freeze requests for margin calls for the next year, which should allow TMA to sit on the sidelines and let this crisis play out.

So even if the deal today did reduce shareholder value by 25%, the stock is off more than 40%. I must admit, my appetite for risk is enormous… But I couldn’t resist some more TMA.

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