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Annaly Capital Management, Inc. Message Board

  • gary29ct gary29ct Jun 9, 2011 8:56 AM Flag

    2 billion shares

    Can someone explain this. There's a vote coming up to expand the # of outstanding shares from roughly 820 million to 2 billion. Wouldn't this dilute the price per share? And if so, why is the stock going up ? What am I missing ?

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    • so, has the info been released on whether proposal #2 was approved or not?

      Thanks

      • 1 Reply to yhoobblowz
      • The proposal for authorizing 2b shares has not yet been approved. The vote on that issue has been continued to another stock holders meeting on June 23. See my post at 3:08 p, June 14. I don't understand the term shelf registration, but guess it must be the same as the difference between the number of authorized shares and outstanding shares.

    • I believe this increase is in the shelf registration - that is permission to issue. It does not necesarily mean they will issue it all at once - and likely they will not. I would give mgmt some credit to manage this so as not to tank the share price while still raising needed capital. Can anyone confirm if this is just an increase in shelf registration?

      • 2 Replies to stanpg
      • Yes, It is only an increase is in the shelf registration

      • The vote already happened on May 26th.
        Proposal #2
        "approval of an amendment of our charter to increase the number of authorized shares of capital stock to 2,000,000,000 shares"

        "Our charter currently allows us to issue up to a combined total of 1,000,000,000 shares of capital stock, par value $0.01 per share. As of March 30, 2011 we had 804,350,532 shares of common stock, 7,412,500 shares of 7.875% Series A Cumulative Redeemable Preferred Stock and 1,652,047 shares of 6.00% Series B Cumulative Convertible Preferred Stock issued and outstanding. To retain the ability to issue additional shares, we seek to increase the number of shares we are currently authorized to issue. The proposed amendment of our charter raises the total number of authorized shares we are permitted to issue from 1,000,000,000 shares to 2,000,000,000 shares."

        "Our charter currently allows us to issue up to a combined total of 1,000,000,000 shares of capital stock, par value $0.01 per share. As of March 30, 2011 we had 804,350,532 shares of common stock, 7,412,500 shares of 7.875% Series A Cumulative Redeemable Preferred Stock and 1,652,047 shares of 6.00% Series B Cumulative Convertible Preferred Stock issued and outstanding. To retain the ability to issue additional shares of capital stock, we seek to increase the number of shares we are currently authorized to issue for general corporate purposes. The proposed amendment of our charter raises the total number of authorized shares we are permitted to issue from 1,000,000,000 shares to 2,000,000,000 shares. While we presently have no immediate plans to issue additional shares of capital stock, we opportunistically raise additional capital from time to time, based upon market conditions, in order to meet our business objectives."

    • Does anyone have a link containing info to the 2 billion share offering?

      i can't find anything.
      Thanks

    • I read that they were going to change the divident

    • I think the up volume is the result of "dividend capture" funds getting in before the upcoming dividend. They will sell their shares soon after the X dividend date passes. They do this regularly to enhance their income.

    • Yes long term the SPO should make management cost per share lower for all shares while adding equal earnings as long as the market is large enough for the new shares. Better than having a new competitor in the market

    • They would issue new shares well above book value ($15.76 as of 3/31) so a new offering would be accretive, not dilutive.

      • 1 Reply to dodell2449
      • Your explanation makes sense to me. I didnlt follow the previous explanation.

        The increase of NLY shareprice is partly due to dividend anticiaption, but cynics would ay it is somehow being manipulated up in anticipation of a new issue.
        Now, we're ought not to complan about that, because a new issue at a price over Book is indeed accretive to Book. However, I do have a cmpaint about the mechansim for new issues, which are directed privatelt at a discount to some big player, possibly a big short who has sold in advance all he way up, while existing shareholders are not even given the chance to particpate in the discounted shares.

    • Annaly uses shares to raise capital to invest in CMBS when the interest rate environment is pleasing.

      While many still falsely conclude dilution the fact is the share offerings are accretive in nature since Annaly must return 90% of them back to the common.

      This allows Annaly to participate in the CMBS marketplace. Absent shares Annaly would be forced to continually reprice and the yeild would likely come down single digits.

      13-15% average since 1996 and spe is how it is achieved

 
NLY
11.31Oct 21 4:01 PMEDT

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