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American Capital, Ltd. Message Board

  • clamosaurus clamosaurus Apr 2, 2013 3:11 AM Flag

    Could this be a reason for buybacks?

    OK, this is perhaps (way) off the wall; but I do wonder sometimes if the buybacks are an attempt to bring into the treasury as many shares as possible before a sale of the company. This would allow for more profit per share for company insiders as well as fewer shares subject to a negative vote on a proposed sale. Let me say that I am LONG ACAS with a lot of shares picked up in the 1.72 to 4.55 range and am very happy so far with what mgmt has been doing. A healthy ACAS dividend is part of my retirement equation. A sale, not so much.

    What do you think?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Wondering what the difference in NAV valuation would have been if the company had invested the funds vs stock repurchases?

    • My opinion: No way. I think that one of the reasons ACAS has been so successful since the downturn is that their fall from grace in 2008 hit Malon Wilkus hard. ACAS is his baby. Returning it to some semblance of it's former glory is a way for him to demonstrate that he really is good at this, he really does know what he's doing.

      I think it really is as simple as they state: they can find no better investment than buying their own company.

      Sentiment: Buy

      • 2 Replies to feralcomprehension
      • Malon wilkus is a very financially smart individual. I have been around since the early days when ACAS was paying over $4.00 a year in dividends and was the biggest and best BDC company of them all. When the finacial world collapsed in late 2008 and brought chaos to all and ruin to some ACAS's stock collapsed bringing down even Malon Wilkus personally with the multi-million dollar margin call that almost wiped him out personally. Will all that was going out ACAS paid all their debts on time with default interest to keep the banks at bay.
        The cancelled dividend in late 2008 was finally paid in early 2009 in mostly stock that turned out to be the biggest coup to give value to the faithful shareholders. The stock dividend was $1.07 per share and was paid when the shares were trading at about $3.24 and it was paid mostly or all in additional shares. That stock dividend was misundstood by many of the shareholders even though it was the new beginning for ACAS. And this was all figured out by Malon Wilkus.
        . Later in the recovery they had to sell shares to Paulson. Those dilutions greatly enlarged the ACAS share count and now Malon is just cleaning up the old mess by buying back as many shares as the can from earningd, while they are paying back debt, and investing additional funds from exit positions from their portfolio.
        The governments policy of mark to market almost destroyed Malon Wilkus and ACAS and now Malon wilkus is using every bit of government tax law and regulations to get his ACAS back to its original glory.

        When the ACAS story gets written by the historians, if it gets all the information correctly it will become a required reading for upcoming financial students.


      • Seeking approval like a child is not Malon's normal behavior. I agree with your conclusion but because it is the most reasonable way to do things.


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