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American Capital Agency Corp. Message Board

  • faaqcee faaqcee Jul 11, 2012 1:49 PM Flag

    I Shall Ask Again-

    How can we tell if AGNC's management releases shares with a "drip" spo at any one time?

    How can one tell how many shares are out-standing for AGNC compared to last weeks number of shares.

    Since I'm asking twwo stupid questions, why not make it a hat-trick: Is it possible that AGNC is dripping shares today, and also did so yesterday, explaining part of the sudden drop?

    If that is the case there might not be a full-blown spo today, or even next week for that matter.

    Those with puts might want to consider that as being true(Olee!), or at least consider it as a possibility.

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    • Hi Foxy,

      >>How can we tell if AGNC's management releases shares with a "drip" spo at any one time?>>

      Remember the CF/Mitsu. Drip we had last year? NLY did a similar sale this year. The company will use the language "shares will be offered from time to time", then they list 300,000,000 or so shares. That is your "drip".

      No way that I know of determining when those are gone from the "Drippers". The single issue days are more popular with mReits and define the number of shares also. You can usually tell when these are distributed by observing the incredible lid on PPS days to weeks following the issue. Observe the last SPO by AGNC and more pointedly the SPO by MTGE two times ago.

      You can almost track to the day when the brakes were removed(shares gone). Having said that, you never know how many shares are kept in the treasury.

      There are many nuances, which might be nit picked to death, but for simplicity think of the outstanding shares and the float as being the same(disregard restricted shares). These( outstanding/float) are a subset of the authorized shares. Shares issued and bought back by AGNC and kept in their treasury are not part of the float. These are the shares which may now be dripped, but they are small in number compared to the issue(authorized shares).

      That is not exactly correct because of things like restricted shares but if you just use this simple definition you will know more than most. Is it possible for management to sell(drip) shares, from the few remaining in the treasury from the last spo? Yes. Is that going to make a significant impact on PPS movement...I doubt it.

      To your last question, no, AGNC , has not declared a drip SPO, as mentioned above. They filed and received authorization to have SPO's, after their normal fashion, to the tune of 600,000,000 more shares, until they have to come back to the membership(owners...all Longs). My guess is 80-100 million in the next SPO.

      Hope that helps...


    • Another dumb question, Why wouldn't you just do a continuous drip SPO to raise capital?

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