Exactly 8 days ago, my firm received an unsolicited call requesting a sponsorship sales proposal for an event in Las Vegas that would be hosting 2000+ "top gun sales execs" making 250k+ per year.
Despite my being leery as to how many sponsors really want to pay to be in front of sales people--who are notorious for being tough sells themselves, "What do these sales execs sell?", I asked. Reply: "Oh--We're one of the top mortgage sales companies in the US." And they were--NYSE listed American Home Mortgatge
Why would they need sponsors to help underwrite a sales event for their brokers? Gee.. Massive company ringing the cash register with commissions every day..You'd think they could pay for their own party, even if it cost them about $4million a year for this one week seminar/boondoggle in LV....It took a few bangs of my head against the wall to conclude that they were about to go down the tube--just like a bunch of other financial service companies being dragged down by the Real Estate Epidemic thats been cratering the mortgage markets
Mortgage sales company seeking help to defray costs of big party...mmmm...sounds a bit dicey, but....We submitted a comprehensive proposal on Thursday night (thinking that we knew at least 10-12 companies that would want to have the opportunity to be in front of top gun sales people making mid six figures)
Two days later, the company announced they were cutting their dividend, the day after that the stock was halted for trading, and today (one week later), they announced they'd be firing 7000 employees, leaving a skeleton staff of 750 and bankruptcy filing would be taking place shortly.
So much for the boondoggle in Vegas...
As a former trader, the first sign was the most obvious-I should have shorted the stock as soon as I was briefed on the client and what they were hoping to accomplish.
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