I think something has happened here that is becoming more clear.
OK, the theory was that PSEC could issue equity that was dilutive to its own NAV IF it could then acquire assets that were at steeper discounts to NAV and then monetize those assets which in turn would result in substantial recovery of the delta (difference for those of you who live in Rio Linda) and right the PSEC NAV.
I don't think the thesis is going to bear out in part because PSEC was giving some portion of those discounts in order to cover the dividend. Then if the assets bought do not provide substantial appreciation such that the initial discount to nav that PSEC shareholders suffered is recovered then you have a negative thesis....
meaning that the issuances by PSEC were for nought... nothing.
This all started with Allied tearing into PSEC mgmt and PSEC mgmt's response was rather weak in its own defense of itself. Now, you have confirmation of what Allied claimed which was the need for PSEC to cut its dividend.
I think the dividend cut is in fact suggesting that the realizations from assets purchased did not in fact justify such dilutive equity offerings.
Perhaps PSEC's near zero borrowings is showing a weakness in their plan. Yes it provides the appearance of a very strong balance sheet but you now have perhaps issued too much equity and not used enough debt and that has resulted in negative capital returns for PSEC shareholders to the extent that the issuances were too dilutive and there is not going to be the bang for the buck relating to increases in nav to offset the dilution from the offerings.