Penson Worldwide, Inc. (NASDAQ: PNSN) had been trading as though the company was on the path of some of the brokerage firm and clearing implosions of 2008… Now the company has clarified the issue saying it believes that the recent declines in its stock price appear to be related “to its recent Form 10-Q disclosure of a concentrated collateral position associated with Retama Development Corporation related receivables.”

The company’s press release says that it expects to resolve this situation without a loss.  Furthermore, it said that even if a loss were realized, it would have “no impact on the Company’s solid regulatory capital or sound financial condition.”

In the May 9, 2011 10_Q report it had approximately $42.6 million in non-accruing receivables collateralized by securities related to the Retama Development Authority, which have declined in liquidity.  This $42.6 million is said to represent only 0.49% of Penson’s $8.7 billion in average daily customer balances during the first quarter of 2011.

Penson’s operating companies had more than $100 million in excess regulatory capital at the end of March and that figure is said to already reflect the deduction of these illiquid receivables.   The companies also held more than $5.8 billion in cash or cash equivalents at the end of the March quarter.

The quote is as follows, from CEO Philip Pendergraft: “We believe the activity of the Company’s stock related to the Retama related collateral is unwarranted. We hope this news release will aid in putting this issue to rest. Penson Worldwide remains strongly financed, with ample excess regulatory capital and a solid business, and none of this affects or involves any correspondents or their customers. We continue to move ahead with our 2011 plan, which calls for reducing quarterly losses and generating a small profit (excluding first quarter non-operating items) for the year.”

The release does contain one note… Penson announced the resignation of Thomas R. Johnson from its Board of Directors because, “Based on Mr. Johnson’s position as chief executive officer of Call Now, Inc, a holder of a portion of the Retama related collateral, both Mr. Johnson and the Company felt it appropriate for him to resign his position at this time.”

At 3:30 PM EST we have shares down 21.8% at $3.07 on more than 6.1 million shares, but the stock was halted at 3:17 PM EST.  We had given a volume spike analysis early today at VSInvestor.com and this should at least mitigate some of those concerns that were in the market.

JON C. OGG

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