I sold all. If it goes hogher might even short some. The $1 special dividend I don't think a good idea, except for WTM. i woudl rather have seen OB buy back shares, pay down mpre debt, or expand markets. Sucking out another $95 million from theor equity will also LOWER the book value per share. OVB tends to trade just above book usualy. It is a buy at book....but when you remove 95 million of equity...I figure the book value will DROP to about $12.15 per share..from about $13.25 now. If OB is around $14.50.and you get a $1.24 special dividend....then OB will open about $13.26 on ex div date......and the BOOK value will be reduced to about $12.15.which means OB will be selling $1.10 above book. Not a horrible area/price...but OB doesn't hold too far above book usually.
IMO? Bad move.....I would have rather seen debt paydowns, stock buybacks or business expansions.
I'm out. I don't want the dividend. but obvioulsy WTM does! I think WTM a better buy.
trying to short some at $14.70.and out of all long a few dimes earier.Be careful here. OB has risen MORE than the special dividend!
If stock is at $14.70..and dividend is now $1.21........it should open at $13.49 on ex date. But since OB is removing $95 million of equity from special dividend, the book value will drop to $12.15.
If it opens ex date $13.49 and book is lowered to $12.15.....that is a higher than usual premium to book....and my guess is analysts will have OB as underperform. OB s a better buy a dime or two above book.....not $1.25 over book..which it will be June 18
be careful. I wish OB wasn't doing this. Would have preferred stock buyback and debt repayment. WTM is now just sucking OB more than they should. And I betcha that analysts state that pretty clearly and they rate OB as an underperformer.
Merrill Lynch has stated several times that they would think OB a better buy ON:Y at book value. Book value will be about $12.15 June 18......
I hardly ever short things. But I think OB a tad rich now and analysts