Crystal River Capital Inc.  (CRZ)     Rate CRZ  -  Discuss CRZ  -  Add to Watch List        

So far I have written four “Short Ideas” for Seeking Alpha, and my track record has been stellar.

My article on Crystal River (CRZ) was submitted when the stock was around 3.5, and as I write it is now at 2.18, down nearly 40%. In it I predicted that the company would in Q2 write down its book value from $5.33 per share in Q1 to either 2.38 or 2.44 per share in Q2, depending on whether there was a second write down on a defaulted junior loan to a Portland condo development.

The first half of 2008 has certainly not been kind to financials in general and Specialty mREITS in particular. However, a number of these Specialty REITs have been changing their focus and business paradigm to match these tough times.

One of these Specialty REITs is Crystal River Capital (CRZ). The company has refocused itself around some basic tenets:

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 sti