American Capital Agency Corp. Message Board
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What's in it for us?
Help me understand how this is good for us current shareholderss. Our shares were worth $30+ yesterday and the company announces they are diluting our stake by offering more shares and at a lower price than ours were valued?
I don't like it-
If you bought this stock without understanding the frequent issuing of shares in an SPO, then you are an idiot. You and your ilk caused the foolish price rise and now fall because you bought high and are selling low.
- 2 Replies to inthegameformoney
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Exactly. People who dont know what these mREITs are (or REITs in general) should not be investing into them no matter what people tell them. Research then decide.
SPOs are how REITs get capital for farther investing. This is how its always been. If you did not know that then do not invest in REITs until you do more reading. -
I blame Cramer.
His idiotic pumping without regard to fundamentals or structure is what makes things happen for the wrong reasons.
We'll be a year cleaning his wax from our ears.
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dilution..we've seen this before and with high divy's we come right back...
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Buy more.
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Your shares have a par value of 0.001 and a book value of 27.71. They are bringing your shares more cash in the form of excess book value on the newly issued shares. Your shares will be worth more in book value when this offering is done. And you will still get the dividend.
If you wanted yesterday's price, you had the opportunity to sell yesterday. Or you can recognize that this stock trades cyclically and will go up between now and the next ex-dividend date, which will occur within a few days of a very regular point in the quarter. And because of the increased book value, the price that this will climb to has pressure to go higher than it was yesterday, when everyone with a clue was fearing the SPO and keeping it relatively low.
How is this not a good thing? -
nothing.... less than nothing, i'm sure the dividend will be cut by at least 25cents in 6 months or at the latest by this time next year... and your shares will be roughly about the same.
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