Chimera Investment Corporation (NYSE:CIM) Q4 2022 Earnings Call Transcript

Lee Cooperman: Thank you. And I assume, given the balance sheet, you have plenty of capital to run the business. You don’t need new additional capital.

Phillip Kardis: Yes, we have plenty of capital to run the business as it’s currently constructed. But as we mentioned in terms of growing the other portfolios and investment opportunities, just to be straight, we’re not going to shy away from raising money if that money is raised at a rate that’s appropriate for us to reinvest in the assets. So if we see a positive return to that capital, we won’t shy away from raising additional funds.

Lee Cooperman: Yes. Equity, would you consider equity financing at these levels?

Phillip Kardis: I would consider equity financing, depending on the investment opportunities at the time that we could access the market, yes.

Lee Cooperman: So you would sell stock at a discount to book value?

Phillip Kardis: No, I didn’t say that. I said that, we will raise capital

Lee Cooperman: I’m asking. I’m asking. I’m asking. Look, let me tell you what my view is. Wall Street has created a lot of companies in this BDC, MLP, REIT space. Their only work would the stock sell at a premium to NAV. Because what happens is, you sell stock, you buy assets, you raise your dividend. You sell stock, you buy assets, you raise your dividend. When you go to a discount to NAV, its game over. It’s only the smart guy is that basically, either merge to become more efficient to generate synergies or basically buy back stock at discount. The idea of selling stock at a discount to book value makes absolutely no sense, and we should consider winding up to the affairs of the company and giving back the money to shareholders and say we made a mistake. Our stock has been a disaster.

Phillip Kardis: Yes. I mean, we don’t disagree with that. I mean, our intent would be to raise at book. I mean the reason I would — I pause for a second, it depends in terms of what the opportunity is. And if we feel that that it’s massively accretive, we would at least consider it, but that’s not our going-in position.

Lee Cooperman: Very good. Thank you. Good luck.

Phillip Kardis: Thank you.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Kardis for closing comments.

Phillip Kardis: I’d like to thank everybody for joining our earnings call and frankly, my first earnings call. It’s been a pleasure to have the opportunity to speak to you, and I look forward to doing so in the future. Thank you.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.