It's actually pretty simple. People are confused because the overcomplicate what's going on. Since acg is earning half what it pays out, every dividend reduces nav. What confuses people are the old 14% notes. They actually pay 5.5% because their rate is reflected in NAV. Since acg recapitalized in the worst possible market, showing extremely poor management, you could argue for a 15% discount to nav rather than the huge premium. Since they continue to pay out money they don't earn and continue to reduce nav, it probably isn't a strong buy until it get to $6.20 to 6.50
Let's see, ACG earned $.23 in first qtr. If they can continue for 4 quarters, that's $.92 for the year. How is that earning half of their dividend which is now $.99? Most gov't bonds in secondary market are selling for premium. Stands to reason, ACG which is mostly gov't bonds should be selling for premium.
Well it looks like I am going to agree with you on whats going on. The only question I have now is how low the share price will go. With interest rates so low it may trade at a premium for for longer than I think. But I do think unless they start earning money to pay the dividend the share price will go into the $6 level. Here is a link for those who need it. It should clear up any doubts about the earnings. http://biz.yahoo.com/prnews/020515/clw022_2.html
1. believe people are starting to accept that acg is not earning its divs
2. have not scince well into last year
3. pulled of the rights offering (finalized 2 days before end of year)only to 'confuse' what was really going on and to replace the management fees lost when total value of fund fell so much.
4. could actually care less about shareholders, they like others, are not paid by what they earn for us.
5. are dedicated to keeping shareholders in the dark as much as possible on operations of the funds.
6. are not especialy well managed or advised as proved by timing of rights offering.
7. are decietful, by raising divs after rights offering with no income to back it up and knowing it could not be earned with most of rights offering going into treasuries yielding 5% (by their own rules)
8. i will stop, this is all old stuff i have mentioned many times before...........and it just upsets me to think so much of it is going on...........