Long Time Comin'

We have, on a number of occasions, made mention of certain strange gyrations undergone on the Madrid bolsa by the shares of real estate developer, Martinsa-Fadesa. This morning's abrupt 25% decrease in its value categorically does not, long-awaited as it is, count among them.

Outstanding intervals in the short stock market history of this company (engaged, by the way, in the enviable business of the construction and promotion of residential properties in Spain, Morroco, Rumania, Hungary and Poland,among others) have been:

1). The opening, post-IPO trade at 18.50 euros on December 17, 2007.

2). The hauling up off the mat of the same 10 days later, and trading at about 17, in which more than the entire miniscule free float of 1 million shares changed hands in the last half hour of trading. The accomplishment? Plus 50 cents from the moment the flood gates opened at a little after 5 o'clock - and 30 cents below the prior close.

3). The early February, relatively cheap, flushing out of shorts at 14. This was about as effective as the amount spent would warrant. A month later, MTF was back to the price of the original assault, having seen 17.65 in the meantime.

4). At this point, and on the verge of entering into the final negotiations to restructure upwards of 4 billion euros of debt on which the company was technically in default, 4.5 million shares cross (this figure being one half of the outstanding, free or otherwise) over 13 days, bring the issue to a new high of 20.50.

5). Late March debt negotiations are 'successful'. The company gets to repackage the whole thing on the condition that they show up with some 400 million by the end of the year. The hook? Any debt taken on to accomplish this must be subordinate. MTF quickly announces that the first 50 had been found already.

Prior price action would suggest that company stock had been put up as collateral for the financing. We cannot imagine that the 10.90 of the last trade (as of this writing) remains above the limits set by the lenders. Guess there isn't any money left.

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Update, July 14: Later, on the day of this posting, it was announced that MTF had asked creditors to waive until August 7th one of the terms of last March's loan restructuring agreement. Apparently, management was unable to find a required 150 million euros. As of 10 AM, trading has been suspended by the exchange - last cross at 7.30.