As Theceltbeserk said. The Tender Offer (share buy back) is on. It will conclude Oct 18 2009.
During the last buy back (spring 09) the PPS held close to the NAV until the end of the buy back. So expect the 10% discount we have enjoyed to go away until Oct 18. After that expect the PPS to drop by 10%.
Summary: Buy now, sell Oct 18.
Please don't buy until it falls below my entry point of $2.45.
SP traded at a discount to the NAV until 5/5/09. Discount was around neg15%-neg5% in april, then steadily increased. On May 11th SP took a 10% jump above the NAV.
You are correct in saying the divi cut was announced after market close on the 12th, and on the 13th the SP ended up at a neg17% discount.
I firmly believe that the drop was due to the divi cut. Capital appreciation has been about 60mil since April. I am hopeful for a good 6mo. report due out in October. With any luck we will see a divi increase sometime after this tender offer (maybe JAN).
All in all, if you do a chart, you will see that anytime the discount is neg15% or lower the SP rises significantly for about 3-4 days. Anytime it is trading at neg5% or higher prepare for a drop.
I expect the current sell off will be over and prices will be back up by Oct 18. We will be in the midst of earnings season. The Yr/Yr compares will look very good. I like to think the NAV will be over $3 by then.
As of today we are down by 4%. Some think this sell-off is over already. Others are expecting as much as 10% down. That is about 935 S&P.
NRO is down about 10% (2.50 from 2.80). So it swings about 2.5x the SP. For a 10% SP drop the target becomes 2.10. I might make another buy around $2.10.