Did they not have enough interest from the rights offering, so they had to do a secondary? Also, they announced this two days before ex-divvy? Scottrade has ex-date as Mar 13, 2014. I did not participate in the rights offering, so I bought some today at $16.75. I have no idea if I did the right thing or not. I figured, after the divvy, I was getting it for $16.05 per share. Well, now that they have managed to make a lot of shareholders angry ( especially the ones that took the rights offering), there is no telling where this will end up after ex-date.
I wonder why the Company did not offer more shares via the Rights approach? Why didn't they make a new share could be bought with each one Right instead of two Rights? Why make a complete Secondary Offering? Maybe they didn't expect an over-subscription of the Rights.
The Rights Offering and then the Secondary Offering look a lot like a double sucker punch which unnecessarily caught OXLC's investors off guard, one way or the other. While OXLC was talking about the Rights Offering well in advance, there was virtually no anticipation of the Secondary, especially coming right on the heels of the first Offering. Yes, we were presented with opportunities to acd cheek to jowl with the Ex. Div.date virtually dictated our purchasing at the most attractive prices almost by happenstance, followed by a long period of share price recovery.
Long story short, as they say, I'd have appreciated the company giving us the bigger picture rather than just concentrating for so long on the Rights Offering. We'd likely have been able to purchase even more OXLC at the best prices at foreseeable times.
You are describing the latest as though it was PLURAL, NOT SO! There was ONE secondary offering with RIGHTS offered to guarantee a price of $17 to those who purchased them...Had the price escalated ,the $17.00 holders would have been delighted, that didn't happen. If you want to see another similar situation in the beginning process, take a look at HQH. There was no first or second offering..there was ONE offering . Rights were offered to current holders. This ONE offering was extended because the company could see from the over subscription that there was more demand than supply so they extended the ONE offering and did not create a second offering as some believe. In order to actually perform a Second offering, they would have to file again with the SEC. Everything relative to this offering is contained in the original filings. Unfortunately sometimes investors don't read or fully understand what they are entering in to.
You did the right thing in increasing your position at a discount...by the way I also purchased more yesterday and today. By not participating in the rights offering, you and I both were able to buy at better price than the rights offering price of $17.00. The rights offering price of $17.00 was set buy the board of directors with advice from the underwriter at a discount of about 4% to 6% in order to attract NEW CAPITAL. You will read many comments on this board suggesting inappropriate behavior on the part of the company...absolutely NOT true. I was a CEO of a bank for more than 30 years and have participated in several stock offerings both as a seller and a buyer and I can say with very few exceptions that this appears to be a normal straight forward offering. The comments questioning a secondary offering miss the fact that it was a secondary offering and that the $17.00 was only determined by the company as a suggested amount for anyone who wanted to commit at a Sure price...the actual price was ultimately set by the market. Had the offering price surged to, lets say $18.00, at opening those who had purchased rights would have been able buy at the price of $17.00 and been "in the money" immediately. So it appears that we both benefited from waiting for the market price. Hope this was of help to you. Regards Dr. ehcowden
They had so much interest that in fact they were oversubscribed at 17.00. So, I think that as soon as management had all the monies credited from the rights offering in the bank, they sayed to themselves, "Hey, if these guys will give us that much at 17, then why not just do another?"
As to the X-Div, I believe you are correct. Buying at 16.75 just prior to X-Div will make your cost about 16.05, as compared to everyone who signed on to the rights offering at 17.00, assuming they don't get the dividend.
So, what's not to understand? You got in for about 95 cents cheaper than everyone else who signed on.
Next time around, when OXLC tries to pull the wool over our eyes, they may be in for a suprise. We've learned how this game is played.
Best of Luck, #88
Sentiment: Strong Buy
They only extended the current which they had the authority to do. There seems to be confusion with the Rights offering and the release of shares and then the Extension of the offering in process....it is one event with a few options: Rights or No Rights Guaranteed price if Rights are purchased no guarantee if rights are not purchased: Over-subscription to the offering: Offering increased to meet greater demand than originally estimated. ALL ONE EVENT WITH SOME TWISTS AND TURNS BUT NOTHING OUT OF THE ORDINARY. RESULT COMPANY EXCEEDED ORIGINAL A MARKET WAS MADE AND DEMAND WAS ACCOMMODATED TO MEET SUPPLY THOSE WHO PURCHASED RIGHTS WERE DISAPPOINTED BECAUSE PRICE SET BY MARKET FORCES CAUSED "RIGHTS" TO BE UNNECESSARY It,s like playing Black Jack with or without insurance, this time, the insurance (RIGHTS) was not necessary.
Rights exercisers do get the dividend. The new shares appeared in our accounts yesterday, well ahead of the record date (March 17). So our post-dividend break-even price is $16.30 ($17 minus the 70 cent dividend). Not as good as you did buying at 16.75, but as ehcowden said in the earlier post, we had the advantage of an option in the sense that we knew ahead of time the price we were going to pay. Nobody knows ahead of time whether an option is going to benefit them or not. In this case, with the benefit of hindsight, it didn't help us. However, with the stock so far holding its price close to the $16.75-$17 range (pre-dividend), despite having absorbed an extra 2.4 million shares in addition to the 4 million of the rights offering, it seems to be demonstrating a fair amount of resilience. Longer term, the bigger question is whether management can find attractive investment opportunities in the CLO market for all the new money they raised. If they can, and therefore continue to pay their 14% dividend, I think the market will reflect that in the stock price.