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Ellington Residential Mortgage (EARN) just unveiled an update.
Ellington Credit Company has implemented a Rights Plan to safeguard its ability to utilize net operating loss and net capital loss carryforwards for reducing future federal income tax obligations. Shareholders will receive one preferred share purchase right for each outstanding common share, designed to prevent an “ownership change” as defined in the tax code, which could occur if shareholders owning 5% or more increase their stake by a significant margin. The plan aims to discourage any individual or group from acquiring a 4.9% or greater share without board approval, by diluting the value of shares acquired beyond this threshold, and ensuring that such acquisitions do not compromise the company’s valuable tax assets.
Learn more about EARN stock on TipRanks’ Stock Analysis page.
