AGNC just crossed over key support levels if you are a TA kinda guy. I own it and NLY. Looking to lighten up after next election since that is when Bernanke will hit us with an rate increase. Not before for political reasons of course.
One can expect that a run up in price will cause an issuance of more shares. Both dilution and growth. The arguments for and against will go on forever.
I am still waiting for this stock to hit 18 as was predicted by someone on this board last July 23. It ain't gonna happen. When folks are in the mood for buying, more shares will be offered.
"...they are not talking about investments as the primary reason for this secondary offering..."
That's standard boilerplate for a stock offering. Just about every BDC uses that wording.
I'm sure they use their debt facilities to fund their investments, since it can be accessed quickly, then pay that down with permanent funding. Since there's a limit to borrowings (the 1:1 leverage limit), stock is often that permanent funding source.
Personally, the stock was just starting to move and they do the additional shares. I hold pnnt and after their last offering stock went dead. Finally staeti9ng to move now. Worry arrc will go stagnant or lose value for 6 months.
Company announced an SPO last night of 14+million shares. Priced this morning at $15.60. I'd say a good reaction as sometimes the price will tank much further. Shows solid business prospects. Added shares should be accreative.
Dilution is in the eye of the holder. ARCC has chosen a perfect time and a high enough stock price to do a secondary.
BDCs in the past were doing secondaries when their dividend yield was 12% or more so to get it done at 9.25% yield bodes well for ARCC's ability to use the proceeds in a very accretive way for shareholders.