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American Capital Agency Corp. Message Board

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  • alw59saw alw59saw Oct 31, 2012 10:14 PM Flag

    Buyback Program

    No. Why did AGNC management say in the buy-back announcement that they intend to buy back shares when the current market price is below book value, thus INCREASING BV? Did they lie to us? OR, are they stupid, not "knowing" what you "know"?

    Sentiment: Buy

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    • You are late to the party AL....;-)

      That question has already been asked and answered. I'd tell you to look through my discussion to discover the answer yourself, but knowing you were the kid in school, who looked to the back of the book for the answers, rather than reading the chapters, I'll help you out.

      When the company does a repurchase below current BV, it increases BV. When they repurchase above current BV, it decreases BV. That coincides with their statement and also the fact that the PPS is above current BV. Therefore any buy back at current prices will decrease BV.

      There.... your MO is safe AL. You don't have to do any DD as usual....you can just blurt out stupid statements and keep your reputation intact...;-)

      DocReits

      • 1 Reply to reits_r_us
      • Ah, but you made an UNQUALIFIED statement that "BV, therefore goes down." That's a LOT different than saying, "When the company does a repurchase below current BV, it increases BV. When they repurchase above current BV, it decreases BV." --- that's the more general case that applies here. I know better than to "blurt out stupid statements" as you have done in this thread. Too bad you let your ego assassinate one's character, given the solid advice that you've given to this board over time.

        Sentiment: Buy

 
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