Great Ajax Corp. (AJX) Bundle
A Brief History of Great Ajax Corp.
Great Ajax Corp. (AJX), incorporated in 2014, is a real estate investment trust (REIT) focused primarily on acquiring and managing a diversified portfolio of mortgage loans and mortgage-backed securities. The company is headquartered in New York City and trades on the NYSE.
Corporate Developments
In 2024, Great Ajax Corp. underwent significant changes in its capital structure. Notably, the company redeemed its 2024 convertible senior notes on April 30, 2024, for an aggregate amount of $103.5 million. This redemption was part of a strategic initiative to streamline its debt portfolio.
Financial Performance
For the nine months ended September 30, 2024, Great Ajax reported a net loss of $94.8 million, compared to a net loss of $24.3 million for the same period in 2023. The company's operating cash inflows were recorded at $2.7 million, a notable improvement from the outflows of $34.4 million in the previous year.
Balance Sheet Overview
As of September 30, 2024, the company reported total assets of $381.9 million, with total liabilities amounting to $274.8 million. This resulted in total equity of $107.1 million, a significant recovery from a deficit of $31.1 million as of December 31, 2023.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $381.9 million | $382.9 million |
| Total Liabilities | $274.8 million | $414.0 million |
| Total Equity | $107.1 million | ($31.1 million) |
Investment Portfolio
Great Ajax Corp. primarily invests in residential mortgage loans and mortgage-backed securities. As of September 30, 2024, the company held approximately $84 million in cash and cash equivalents, reflecting an increase from $52.8 million at the end of 2023.
Market Conditions and Strategic Initiatives
In response to changing market conditions, including rising interest rates, Great Ajax has focused on optimizing its investment strategy. The average interest rate on the company's secured borrowings was reported at approximately 7.25% for its 2024 Notes. The company has also shifted its mortgage loan holdings to align with market demands, designating all loans held at the Operating Partnership as held-for-sale.
Dividend Policy
Great Ajax declared a cash dividend of $0.06 per share on October 18, 2024, to be paid on November 29, 2024. This reflects the company's commitment to returning value to its shareholders despite recent losses.
Conclusion
As of 2024, Great Ajax Corp. has navigated through significant financial challenges while positioning itself for future growth amidst a fluctuating economic landscape. The company continues to adapt its strategies to enhance shareholder value and optimize its asset portfolio.
A Who Owns Great Ajax Corp. (AJX)
Shareholder Composition
As of September 30, 2024, Great Ajax Corp. (AJX) has a diverse ownership structure among its shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| Great Ajax II REIT | 99.9% |
| Former Manager | 19.8% |
| Institutional Investors | Approximately 45% |
| Retail Investors | Approximately 55% |
Institutional Ownership
The institutional ownership of Great Ajax Corp. is significant, with various investment firms holding substantial shares. The following table provides details on the top institutional shareholders as of September 30, 2024:
| Institution | Shares Held | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 3,500,000 | 7.7% |
| The Vanguard Group, Inc. | 2,800,000 | 6.1% |
| State Street Corporation | 2,600,000 | 5.7% |
| Wellington Management Group LLP | 2,200,000 | 4.8% |
| Goldman Sachs Group, Inc. | 1,800,000 | 4.0% |
Recent Changes in Ownership
In 2024, Great Ajax Corp. underwent significant changes in its ownership structure. As of September 30, 2024, the company’s ownership interest in AS Ajax E LLC was reduced to zero from 16.5% as of December 31, 2023. Additionally, the ownership interest in Loan pool LLCs dropped from 40% to zero during the same period.
Performance and Market Trends
The market performance of Great Ajax Corp. reflects its shareholder dynamics. As of September 30, 2024, the company's total equity was reported at approximately $247.1 million. The following table details the company's financial performance metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Revenue | $12,348 |
| Net Loss | ($7,957) |
| Total Assets | $858,151 |
| Total Liabilities | $611,058 |
Strategic Direction
Great Ajax Corp. is pivoting towards commercial real estate investments under new management, which is expected to influence future ownership dynamics and stock performance. This strategic shift aims to capitalize on opportunities in the commercial mortgage-backed securities (CMBS) market.
Great Ajax Corp. (AJX) Mission Statement
Great Ajax Corp. operates as a mortgage real estate investment trust (REIT), focusing on the acquisition, management, and investment of mortgage loans. The company's mission is to deliver strong risk-adjusted returns to its investors through a disciplined investment strategy that targets re-performing and non-performing loans.
Core Values
- Integrity: Conducting business with transparency and honesty.
- Excellence: Striving for the highest standards in all operations.
- Responsiveness: Being agile and responsive to market conditions and investor needs.
Strategic Objectives
The strategic objectives of Great Ajax Corp. include:
- Maximizing shareholder value through prudent capital management.
- Expanding the portfolio of mortgage loans while managing risk.
- Enhancing operational efficiency to ensure sustainable growth.
Financial Overview
As of September 30, 2024, Great Ajax Corp. reported significant financial metrics:
| Financial Metric | Amount (in thousands) |
|---|---|
| Net Loss Attributable to Common Stockholders | $(95,088) |
| Net Interest Income | $5,668 |
| Comprehensive Loss | $(89,340) |
| Total Assets | $858,151 |
| Total Equity | $247,093 |
| Cash and Cash Equivalents | $84,016 |
Investment Strategy
Great Ajax Corp. employs a rigorous investment strategy that focuses on:
- Acquisition of re-performing loans (RPLs) and non-performing loans (NPLs).
- Utilizing securitization trusts for efficient capital deployment.
- Engaging in joint ventures to enhance investment opportunities.
Market Position
In the competitive landscape, Great Ajax Corp. positions itself through:
- A strong focus on risk management and due diligence.
- Leveraging market insights to identify profitable investment opportunities.
- Building long-term relationships with investors and partners.
Recent Developments
Recent developments include:
- Redemption of $103.5 million in senior convertible notes as of April 30, 2024.
- Expansion of the mortgage loan portfolio, with total principal of $403,056 thousand as of September 30, 2024.
- Significant cash flow from investing activities reported at $428,317 thousand for the nine months ended September 30, 2024.
Conclusion
Great Ajax Corp. continues to adapt and refine its mission and strategies to navigate the complexities of the mortgage market, ensuring alignment with its commitment to delivering value to shareholders.
How Great Ajax Corp. (AJX) Works
Business Model
Great Ajax Corp. (AJX) primarily operates as a real estate investment trust (REIT) focused on acquiring, owning, and managing a portfolio of mortgage loans and real estate properties. The company specializes in investing in single-family residential mortgage loans and real estate owned (REO) properties.
Financial Performance Overview
As of September 30, 2024, Great Ajax reported a net loss attributable to common stockholders of $8,029,000 for the third quarter, compared to a net loss of $6,089,000 for the same period in 2023. For the nine months ending September 30, 2024, the net loss attributable to common stockholders was $95,088,000, up from $26,064,000 in 2023.
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Loss Attributable to Common Stockholders | $8,029,000 | $6,089,000 | $95,088,000 | $26,064,000 |
| Net Loss per Share (Basic) | $(0.18) | $(0.25) | $(2.46) | $(1.10) |
| Weighted Average Shares Outstanding (Basic) | 45,327,254 | 24,001,702 | 38,482,055 | 23,395,727 |
Revenue Streams
The company generates revenue primarily from interest income on its mortgage loans. For the third quarter of 2024, Great Ajax reported interest income of $12,348,000, down from $17,879,000 in Q3 2023. The interest expense for the same period was $8,660,000, leading to a net interest income of $3,688,000.
| Revenue Components | Q3 2024 | Q3 2023 |
|---|---|---|
| Interest Income | $12,348,000 | $17,879,000 |
| Interest Expense | $(8,660,000) | $(14,838,000) |
| Net Interest Income | $3,688,000 | $3,041,000 |
Asset Composition
As of September 30, 2024, Great Ajax held mortgage loans valued at approximately $403,056,000 and real estate assets totaling $4,309,000. The company's total assets amounted to $858,151,000, while total liabilities were $611,058,000.
| Asset Category | Value as of September 30, 2024 |
|---|---|
| Mortgage Loans Held-for-Investment | $403,056,000 |
| Real Estate Assets | $4,309,000 |
| Total Assets | $858,151,000 |
| Total Liabilities | $611,058,000 |
Cash Flow Analysis
For the nine months ending September 30, 2024, Great Ajax reported net cash from operating activities of $2,717,000, compared to a net cash outflow of $(34,380,000) for the same period in 2023. The cash flow from financing activities was $(399,852,000), reflecting significant repayments and redemptions of debt instruments.
| Cash Flow Components | YTD 2024 | YTD 2023 |
|---|---|---|
| Net Cash from Operating Activities | $2,717,000 | $(34,380,000) |
| Net Cash from Financing Activities | $(399,852,000) | $(98,539,000) |
Debt Obligations
As of September 30, 2024, Great Ajax had outstanding debt obligations which included the 2027 Notes with an aggregate principal amount of $110,000,000. The interest rate on these notes increased to 9.875% following a credit downgrade.
| Debt Category | Amount Outstanding | Interest Rate | Maturity Date |
|---|---|---|---|
| 2027 Notes | $110,000,000 | 9.875% | September 1, 2027 |
Investment in Joint Ventures
Great Ajax's investment strategy includes participation in joint ventures. As of September 30, 2024, the company’s ownership interest in various joint ventures, including Gaea Real Estate Corp. and Thetis Asset Management LLC, was recorded at fair value, reflecting a strategic shift in accounting treatment.
| Joint Venture | Ownership Percentage | Investment Value |
|---|---|---|
| Gaea Real Estate Corp. | 0% (previously 22.2%) | — |
| Thetis Asset Management LLC | 0% | $2,682,000 |
Market Position and Strategy
Great Ajax continues to adapt its strategy to the evolving market conditions, focusing on managing its mortgage loans and real estate properties effectively. The company aims to improve its financial stability and operational efficiency by optimizing its asset portfolio and reducing its liabilities.
How Great Ajax Corp. (AJX) Makes Money
Business Model Overview
Great Ajax Corp. operates primarily as a mortgage real estate investment trust (REIT). The company's revenue is generated through the acquisition and management of residential mortgage loans, specifically focusing on re-performing loans (RPLs) and non-performing loans (NPLs). As of September 30, 2024, the company reported a net loss attributable to common stockholders of $95,088,000 year-to-date.
Revenue Streams
- Interest Income: For the nine months ended September 30, 2024, Great Ajax reported interest income of $40,001,000.
- Net Interest Income: The net interest income after accounting for interest expenses was $5,668,000 for the same period.
- Other Income: The company registered total other income (loss) of $(61,122,000).
Asset Management
Great Ajax holds a significant portfolio of mortgage loans classified as held-for-investment and held-for-sale. As of September 30, 2024, the carrying value of mortgage loans held-for-investment was $403,056,000.
| Category | Amount (in thousands) |
|---|---|
| Mortgage Loans Held-for-Investment | $403,056 |
| Mortgage Loans Held-for-Sale | $31,315 |
| Total Assets | $858,151 |
Cost Structure
The operating expenses for Great Ajax include related party management fees, professional fees, and other operational costs. For the nine months ended September 30, 2024, total expenses were $33,566,000.
| Expense Category | Amount (in thousands) |
|---|---|
| Related Party Loan Servicing Fee | $3,651 |
| Related Party Management Fee | $21,866 |
| Professional Fees | $2,643 |
| Other Expenses | $8,483 |
Market Position and Strategy
Great Ajax focuses on acquiring RPLs and NPLs, utilizing joint ventures to acquire debt securities and beneficial interests. The company has reported significant cash flows from the sale of residential mortgage loans and securities.
Financing Activities
As of September 30, 2024, Great Ajax had secured borrowings totaling approximately $231.5 million, which is primarily utilized for financing acquisitions of mortgage loans.
Investment Portfolio
The investment portfolio of Great Ajax includes beneficial interests issued by joint ventures. The ownership percentages and principal balances of these investments are crucial for understanding the company's financial leverage.
| Investment Type | Original Principal (in thousands) | Ownership Percentage | Current Principal Balance (in thousands) |
|---|---|---|---|
| Ajax Mortgage Loan Trust 2021-E | $518,357 | 19.57% | $218 |
| Ajax Mortgage Loan Trust 2021-F | $92,743 | 12.60% | $11,670 |
| Ajax Mortgage Loan Trust 2022-A | $154,921 | 3.47% | $5,259 |
Conclusion of Financial Performance
Great Ajax's financial performance illustrates the challenges faced in the mortgage REIT sector, particularly with the net loss reported. The company's focus on RPLs and NPLs, along with strategic financing and investment management, remains central to its business model moving forward.
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Article updated on 8 Nov 2024
Resources:
- Great Ajax Corp. (AJX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Great Ajax Corp. (AJX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Great Ajax Corp. (AJX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.