I am betting on them making an announcement before this Friday stricly based on history. I cannot see them skipping a quarter. Last year is was on January 12th.
Quarter Div Declaration Date Ex-Div Date Record Date Offering Announcement
Q3 2010 9/27/10
Q4 2010 1/12/11 <--- last year
Q1 2011 3/21/11
Q2 2011 6/22/11
Q3 2011 10/26/11
Q4 2011 1/??/12 <---
What does THAT mean? Whales live in the sea; AGNC investors live on this BB --- you didn't answer the mail.
My questions was/is: Why would AGNC management want to sell shares at market (Cantor et. al.) when they can simply issue an SPO with the expectation of selling all shares in 1-2 days? What is their motivation? Are they the whales?
>>"2. It's not nearly enough to provide the volume of cash the company needs to expand at the rate it's expanding."
Then, why do it at all? What's the compelling need to sell shares at market when they can just do an SPO ans sell all its shares in "6. It's clear from the way the SPO sells out in 1-2 days"?
Something doesn't add up to your hypothesis.
1. The Cantor/Mitsubishi thing isn't new, it's been going on all along.
2. It's not nearly enough to provide the volume of cash the company needs to expand at the rate it's expanding.
3. If they did put that kind of volume out on a consistent basis, the stock price would be much closer to BV all the time.
4. This company does SPOs to grow because the 90% payout requirement means it can't reinvest its profits to grow. It distributes its profits to its current investors and uses the image of that cashflow to attract new investors (who are largely just the current investors doubling-up on their lucrative incomes).
5. This company doesn't need to do SPOs to stay in business, but it _can_ do SPOs _and_ stay in business, so it does (wouldn't you?). And it's good business. Money flying everywhere, even with the compressed spreads. I'd fire them if they stopped doing SPOs without a good reason.
6. It's clear from the way the SPO sells out in 1-2 days that they're finding plenty of investors, and that is extremely unlikely to change. The Cantor/Mitsu shares are probably going to whales who have the pull to convince the company not to make them wait for 3 months.
Short answer: it's all good.
The problem being figuring out when "the last three days before the announcement" is, before the announcement.
I was reasonably sure that the SPO would follow the recent patter of being right on the heels of the ex-div, and it wasn't. Right now I'm in that boat again, thinking it's either this week or not until after expiry.
As for AAPL, I still don't get how it makes high-tech money selling technology that I find childish in functionality. Maybe I should stop having an opinion and just listen to Mr. Mencken re estimating the intelligence of the American public on that account.
FWIW, if you had bought puts before that last (Oct 2011) SPO you would not have made money -- unless you bought them within the last three days before the announcement.
As memory (and the chart) reveals, the share price shot up almost one dollar (actually .86) three days before the SPO, only to come down to where it was before that spike after the announcement (minus a few pennies). If this pattern (smelling of possible manipulation -- maybe by the agents) repeats itself, then the way to prepare for an SPO would be to buy calls, not puts. (I am doing neither, as post-SPO PPS movement is historically more predictable).
Meanwhile short Apple puts are delivering once again for the umpteenth time. Ben is in them as well, I believe.
I would feel better if they could make their dividends without all these SPO's.
I mean, it's almost like they need new investors to maintain their finanaces. Isn't there a term for a system like that?
You have it backwards.
The fact that they can easily make their dividends means they can afford to do these SPOs.
This is emphatically NOT a Ponzi scheme. None of the dividend comes out of the new SPO money. All of it comes out of earnings.
Frequent SPOs actually cost them relatively, since SPO shares don't participate in generating revenue for the full quarter/year, but get full dividends for the period.
So being able to continually do SPOs and increase BV every time and keep the div up is a sign of massive strength.
That would make it the proper timing every quarter, and it isn't.
I also don't see where they'd be getting blowout earnings in what looks like a slack quarter with increased competition for MBSs from the Fed. Nominal earnings and coverage of the div are more likely, and the presumption of that result is enough to make this SPO work just as well as all the others.