8-K: Great Ajax Corp. Announces Preliminary Q1 2024 Results, Book Value Declines

Great Ajax Corp. reported a significant decrease in book value and a net loss for the quarter ended March 31, 2024, compared to the previous quarter.

Summary

• Great Ajax Corp. has released preliminary financial results for the quarter ending March 31, 2024.
• The company estimates its GAAP book value per common share to be between $6.81 and $6.88 as of March 31, 2024, a decrease from $9.99 per share as of December 31, 2023.
• This decrease is primarily attributed to a GAAP net loss, shares issued in exchange for preferred stock and warrants, and cash dividends paid during the quarter.
• The company estimates a GAAP consolidated net loss attributable to common stockholders of between $(58.7) million or $(1.90) per common share and $(63.2) million or $(2.06) per common share for the quarter ended March 31, 2024.
• This compares to a net loss of $(23.2) million or $(0.86) per common share for the quarter ended December 31, 2023.
• Operating loss, a non-GAAP measure, is estimated to be between $(4.1) million or $(0.13) per common share and $(4.6) million or $(0.15) per common share for the quarter ended March 31, 2024.
• This is worse than the operating loss of $(1.8) million or $(0.07) per common share for the quarter ended December 31, 2023.
• As of April 4, 2024, there were 36,988,770 issued and outstanding shares of Great Ajax's common stock.

Sentiment

Score: 2

Explanation: The document reveals a significant decline in financial performance, with a substantial decrease in book value and a large net loss, indicating a negative outlook.

Negatives

• The company experienced a significant decrease in book value per share.
• Great Ajax reported a substantial net loss for the quarter ended March 31, 2024, which is significantly worse than the previous quarter.
• Operating loss also worsened compared to the previous quarter.

Risks

• The company's financial performance is subject to numerous assumptions, risks, and uncertainties.
• Actual results could differ materially from the forward-looking statements provided.
• Factors that could cause differences include those listed in the company's most recent Annual Report on Form 10-K.

Future Outlook

The document contains forward-looking statements which are subject to numerous assumptions, risks and uncertainties, and actual results could differ materially from those anticipated.

Management Comments

• Great Ajax considers operating loss to provide a useful measure for comparing the results of its ongoing operations over multiple quarters.

Industry Context

The announcement comes as Great Ajax, a real estate investment trust, is navigating a challenging market environment, as evidenced by the significant decrease in book value and net loss. This may reflect broader trends in the real estate and mortgage markets.

Comparison to Industry Standards

• It is difficult to make a direct comparison without knowing the specific performance of other similar REITs focused on re-performing and non-performing loans.
• However, the significant decrease in book value and the large net loss suggest that Great Ajax's performance is likely below average compared to industry benchmarks for the quarter.
• Companies like Annaly Capital Management (NLY) and AGNC Investment Corp (AGNC), which are also REITs, may serve as comparables, but their specific business models and asset portfolios would need to be considered for a more accurate comparison.

Stakeholder Impact

• Shareholders will likely be negatively impacted by the decrease in book value and the net loss.
• The company's performance may affect investor confidence and future investment decisions.

Next Steps

• The company is seeking stockholder approval for proposed transactions with Rithm Capital Corp.
• Stockholders are urged to read the proxy statement and other relevant documents filed with the SEC.

Key Dates

Keywords

Real Estate Investment Trust, REIT, Financial Results, Book Value, Net Loss, Operating Loss, RPL, NPL, Mortgage Loans