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American Capital, Ltd. Message Board

  • calzoneous calzoneous Aug 12, 2014 1:33 AM Flag


    Focusing on the negative for a change,

    - The much ballyhooed gains from SPL and Specialty were consumed by the losses on Confluence and Egenera. Lots more where that came from.
    - If you ignore the ACE-III companies, the vast majority of their control assets are marked below cost basis. It's six years since the recession began. Nonaccruals refusal to heal.
    - Their third largest asset, CML, is tanking, having lost 100M in about a year. Nothing makes me question the competence of ACAS more than this. This was their latest acquisition, made during a very dry spell, and should have been well researched. This following the wealth-destroying performance of their other large life sciences holding WRH.

    Happy they are getting out of the equity game, I really don't think they are that good at it. ACAM has saved us.

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    • its_not_my_business_but its_not_my_business_but Aug 12, 2014 11:07 AM Flag

      Calz .. 'much ballyhooed gains from SPL and Specialty'

      Actually, once we realized that SPL was part of both ACE1 and ACE2, nobody was expecting much from the write-ups from the exits.

      Now you talk about "losses" .. and you are not being specific about what you are referring to. If you are saying they booked capital losses on the exits .. well .. yea .. like you say, most of ACAS's equity is still underwater relative to their investment basis, so on sale, they will book a capital loss.

      That said, of our comments referred to the final cash value in the sale relative to the previous Q's FV.

      So can you please provide the numbers and explanation so we know what you are talking about?



      • 1 Reply to its_not_my_business_but
      • its_not_my_business_but its_not_my_business_but Aug 12, 2014 12:13 PM Flag

        PS .. "our comments referred to the final cash value in the sale relative to the previous Q's FV."

        In otherwords .. ACAS could (and has been) booking (realizing) capital losses on exits .. but those losses were already reflected in the BV of ACAS as unrealized losses, but simultaneously booking FV gain vs the previous quarter's unrealized loss.

        You get what I'm saying?

        I guy a company for $1M in 2008, over the years its value goes down to $500M and so I account an unrealized loss of $500 .. then I sell it for $700M.

        I book a $300M capital loss on the exit, but I also book a $200M gain to my book value vs the previous quarter.


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