Could American Mortgage (AHM) Go Belly Up?

American Mortgage (AHM) is down 45% in the pre-market to $5.75. The stock has a 52-week high of $36.40.

And, things could get worse. According to The Associated Press  “The company said some of its financial backers are worried that the mortgages acting as collateral for their loans have lost too much value, and have demanded their money back.”

The company also says that it is facing margin calls on its portfolio and has suspended its dividend.

Preferred shareholders and firms who are trying to collect on margin debt could liquidate the company if things get worse.

This dog could go to zero.

Douglas A. McIntyre