INVESTMENT IN EQUITY SECURITIES

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT IN EQUITY SECURITIES

INVESTMENT IN EQUITY SECURITIES

During 2016, we purchased 4.1 million shares of Front Yard Residential Corporation (“RESI”) common stock. This investment is reflected in the accompanying condensed consolidated balance sheets at fair value and changes in fair value are included in other income (expense), net in the accompanying condensed consolidated statements of operations and comprehensive loss. As of June 30, 2020 and December 31, 2019, we held 3.5 million shares of RESI common stock. As of June 30, 2020 and December 31, 2019, the fair value of our investment was $30.0 million and $42.6 million, respectively. During the six months ended June 30, 2020 and 2019, we recognized an unrealized (loss) gain from the change in fair value of $(12.6) million and $14.0 million, respectively ($(11.2) million and $11.8 million for the second quarter of 2020 and 2019, respectively). The unrealized gains for the three and six months ended June 30, 2019 included $1.2 million and $1.5 million, respectively, of net gains recognized on RESI shares sold during the second quarter of 2019. During the six months ended June 30, 2020 and 2019, we earned dividends of $0.5 million and $1.2 million, respectively (no comparative amount for the second quarter of 2020 and $0.5 million for the second quarter of 2019), related to this investment.

In May 2019, the Company began selling its investment in RESI common stock. During the three and six months ended June 30, 2019, the Company sold 0.6 million shares for net proceeds of approximately $6.5 million (no comparative amount for the three and six months ended June 30, 2020). As required by the senior secured term loan agreement, the Company used the net proceeds to repay a portion of its senior secured term loan.

On February 17, 2020, RESI entered into a merger agreement to be acquired by affiliates of Amherst Single Family Residential Partners VI, LP (“Amherst”) for $12.50 in cash per share. On May 4, 2020, RESI announced the termination of the merger agreement.