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American Capital Agency Corp. Message Board

  • dt37b dt37b Sep 18, 2012 6:54 PM Flag

    SPO at $35.50

    Done after the close -- buyers get the dividend.

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    • yourbestfriendintheworld yourbestfriendintheworld Sep 19, 2012 6:43 PM Flag

      (going back to top of thread because Yahoo cuts off replies at 5 re's...jerks)

      Okay. So DB was fronting shares for an "institutional seller".

      But the rumor of a SPO set off hard selling at a discount. Which is illogical, because a secondary-market seller like this institution has no reason to offer a discount, unlike the issuer, who almost always offers a discount.

      So whoever was selling last night was undercutting themselves and giving up the dividend in the process. That's going to leave a mark. But it wasn' t the institution; nobody with 11 mil to dump would go near the AH book without a torch and a machete'.

      Volume today could have included this institution's shares.

      What I worry about is that the resulting price action may have forced the company and its underwriters back to the negotiating table to recalibrate the SPO price. That could cause a delay and that could mean next week is more likely than this week, and that means the inevitable flood of antsy buyers will bid the price up and my protective Puts could turn out to be useless if the SPO goes at 34.00 or above. Bummer.

      Meanwhile, DB ought to be out for blood looking for the leaker, because the overnight action took almost a dollar out of the nominal value the institution could have received if the sale had gone on peacefully.

    • What is SPO? I bought 2000 shares after hours yesterday at $35.95. If I do not get div. I have a loss.
      Can some body explain to me SPO?

      • 1 Reply to munirqasim42
      • First off, you will get the dividend.

        Secondly an SPO is a Secondary Public Offering. It is how this sector usually raises capital to grow. It introduces new shares to the market, but at the same time adds to the balance sheet. If you're a long term investor it won't matter to you. If you're trying to play the market, good luck.

    • Well that is the problem with a stock with a large stake owned by institutions. The downgrade probably had a big role in the sell off.

    • Could someone tell em where they saw an announcement regarding the spo or if they announced a date for it. I haven't been able to find anything on this, thanxs.

    • yourbestfriendintheworld yourbestfriendintheworld Sep 18, 2012 7:09 PM Flag

      No. Pointless. The turmoil of underwriters trying to move shares in the middle of the night at ex-div is silly. Their clients can't do anything until morning, and wouldn't understand why they're buying shares from the underwriters at 1.25 above the market price. They wouldn't know whether to buy at previous close or close-minus-dividend, and it'd be a customer-service nightmare. The SPO price paid to the company would be 1.25 higher and would result in far fewer shares moved, and the expense of turning around and returning the div to the traders in a month would be wasted effort. Nightmare with a chance of lawsuit.

      Now, announcing tonight that it would be issued in the morning, that's possible. Also significant turmoil, as the SPO and the ex-div hit on the same opening tick, and the world goes insane with blood-lust.

      Best scenario: announce the SPO tomorrow night. Separate the action by a day, give everyone a chance to change hats, avoid anyone who doesn't get the drill getting litigious over it.

      And if they wouldn't mind sending me an email telling me I'm right, I'd appreciate it.

    • Where are you getting this from? No SEC filing...

 
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