I would guess it has more to do with the market's knee jerk reaction to the termination of the credit facility with Citibank and Deutsche Bank. Mr. Market probably assumes this will be a liquidity issue at April 30th, which it is not. Mr. Market probably is also too lazy to do some due diligence and assumes this BDC is like most BDC's in the credit risks that it faces, which is also incorect. Conference calls are definitely worth listening to.
I haven't had time to listen to the conference call yet, but am a little concerned that HTGC hasn't finalized a new credit facility yet. However, every stock out there that I have found has one or two potential negative issues that I have to weigh and this is no different.
I must admit, I'm fairly content right now. I've been on a roll lately catching several high yield stocks at very low prices. The bad part is, I don't have much left that I would consider selling at this point based on the yields I am now getting. Only one I might consider selling is a little BGF because I am overweight there and have almost a 100% profit on my last two fills. Problem is a REALLY like that one going forward even with the profit.
I suspect today's sell off is a hedgie unloading. ARCC (another BDC) is selling off today as well, and it released earnings before the bell yesterday. And there remains the concern that dividends exceed operating revenue so at least a portion of forward dividends could be return of capital not from operations. I have new buy orders to increase my position at slightly lower prices.
I just bought into ARCC today because of that drop. I too believe this is another round of forced hedge fund liquidations so I also sold some GE at a loss and added more here as well.
These forced liquidations are probably just about over since most of the hedge funds in trouble have a November 15th deadline for investors to indicate that they want to pull funds out. After that date, I think those same funds that have been selling will be back buying again once they balance out their withdrawals. I expect a quick recovery in price after that.