Crystal River’s Q2 Write-Downs Could Bankrupt the Company

Crystal River Capital, Inc. (CRZ) is a leveraged financial entity structured as a Real Estate Investment Trust. I think that the company - within two to six months - will be insolvent and its stock worthless (and trade like other worthless REITS such as Thornburg Mortgage (TMA) for under 30 cents a share for a while as it awaits delisting).

You might chide me for being Captain Obvious now for not speaking up about CRZ sooner. Predicting the demise of CRZ is not too bold a move considering that its stock has plummeted over the past year, from about 25.5 to about 3.5. Nonetheless, one can still profit from buying puts on the stock as it falls to zero. The values of CRZ’s assets have fallen dramatically, but these declines are not reflected in its overpriced stock. Nor is the risk that the company could be suddenly wiped out by an inability to pay margin calls or meet