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Prospect Capital Corporation Message Board

  • caminocasa07 caminocasa07 May 13, 2014 3:23 PM Flag

    Stock Buy Back

    IMHO PSEC should launch an aggressive stock buyback program---
    Anywhere under $10.00---This would eliminate the dividend on the
    repurchased shares, and the stock would be purchased below
    book value---enhancing the value of remaining shares oustanding--
    This would be a better use of capital than most of the loans they are
    making at this time--
    Simultaneously of course the company should suspend indefintely
    the stock issuance program

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    • I am not sure if convertible preferred shares count as capital or leverage for a bdc but I was looking at what call did where they sold the puts to get an even lower price. I would suspect the price would be in the high 8's and then if the price went up they would get over $1 a share or they would increase the nav per share In the buyback. they could always sell the shares again later.

    • only question, where the money to come from?

    • this company will never buy stock back, that is against their policy the only way they do business is to sell more stock so they can make more loans. Only if they liquidate will they buy back stock. They doubled the amount of their shares last year. Once they quit selling stock this price will collapse even more. They have no income to buy stock, they spend all of it and more on distributions. Do you think they would borrow money to buy stock, You really are clueless on this company

    • 100% agree that this screams for a stock buy back, and I think there is a decent chance they do it. However, I think there may be somewhat of a conflict of interest inasmuch as management fees may be adversely affected in the near term by a buy back.

      Still, at this big a premium to NAV, a buy back ought to occur for the long term benefit of everyone involved.

      Do you think they will do it?

      Sentiment: Strong Buy

 
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