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Cornerstone Progressive Return Message Board

  • divseekr divseekr Jun 17, 2013 1:04 PM Flag

    Rights offering or Ponzi Scheme?

    I want to love this fund...I really do, but I have grave concerns. With a payout ratio well over 100%, any dividend at that rate is going to include return of capital. As well, if they don't have the cash from profits to cover the dividend, the rights offering could just be a way to raise that money and keep up the ruse. Since matter can neither be created nor destroyed, unless there's a plan for this new money that's going to cause a significant asset and revenue increase, how can they expect us to believe there's not a forthcoming dividend decrease and book value decrease per share? Somebody tell me why I should participate in the rights offering...broker's going to charge me a $25.00 commission whereas I could buy them open market for only 7 bucks. Granted, I'm the little guy so I won't be buying 20000 shares at a time...it just doesn't make much sense to me. I'll hold what I've got, but I don't see a reason to increase my position...unless somebody can 'splain me this better!

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