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Newcastle Investment Corp. Message Board

  • larsthebuyer larsthebuyer May 10, 2013 10:23 AM Flag

    Spin-off Bottom Line

    We will end up with around a $7.25 NRZ and a $5.25 NCT. NRZ growth may be a bit quicker as it will soon be expanding rapidly as much of the recently raised capital will be put to work there. NCT has great long term potential with the expansion into the senior market. Either way, with the economy and housing markets improving and the population aging...we have two winners and we are more diversified. Holders and buyers will be winners. Patience.

    Sentiment: Strong Buy

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    • I'm thick, but can you explain to me further where you're getting these guesses for the NRZ and NCT share prices? My understanding of the spin-off is that it isn't a split but rather a share dividend that has already had it's ex-date pass. You can already have sold NCT and still receive your shares of NRZ. So, I wouldn't expect NCT to drop much from it's present level. NRZ's price will depend upon it's capitalization.

      I've heard someone on this board state that a stockholder needs to hold their stock through the entire period of May 6th to May 15th, but everything I've seen on NCT's web site shows this as untrue. First, their press release states the distribution will go to "Holders of Record" as of 5 pm May 6th. Second, if you look today you'll see forms filed May 8th which shows 235,025,645 shares as being disposed of by NCT. The footnotes reaffirm that the spin off will be a share dividend and it will go to the May 6th holders of record.

      Anyone buying shares between May 6th and May 15th will just keep their shares at a price determined by the market - most likely around what it is now.

      Or am I completely misinterpreting things?

      • 2 Replies to reid_loper
      • Hmm, you are completely off on the share price. larsthebuyer is most likely going to be correct, but we can already see the price of the two companies as separate entities. NCT will definitely drop and most likely be priced somewhere between $5 and $5.50. Just follow the price of NCT.WI and NRZ.WI. NCT.WI is currently at $5.36. So, that is what price NCT would be if it were to split right now. My 15th, when we all have our NRZ shares, NCT will be, most likely, in the $5.xx range.

      • "can you explain to me further where you're getting these guesses for the NRZ and NCT share prices?"

        They're not totally guesses. NRZ is already trading on a when-issued basis (NRZ-WI) at $6.97. Subtracting that from the NCT price gives you the post-distribution NCT price, were it to happen today.

        "My understanding of the spin-off is that it isn't a split but rather a share dividend that has already had it's ex-date pass."

        Your understanding is wrong. The ex-distribution date is May 16th.

        "You can already have sold NCT and still receive your shares of NRZ."

        No, you can't. You have to own NCT as of the close of trading on May 15th to get the NRZ shares. If you were a holder of NCT on the record date but sell before the ex-date of the 16th, the NRZ shares will be deposited into your account on the 15th but will be removed within a few days and forwarded to whoever owned the NCT shares as of the close on the 15th.

        "I've heard someone on this board state that a stockholder needs to hold their stock through the entire period of May 6th to May 15th"

        That's wrong too. You can buy NCT as late as the distribution date, May 15th, and still get the NRZ shares. With the 16th being the ex-date, it can't work any other way.

        "the spin off will be a share dividend and it will go to the May 6th holders of record."

        Yes, but if a shareholder of record sells before the ex-date of the 16th, they will have to forward the NRZ shares to whoever owned the shares as of the close of the 15th.

        "Anyone buying shares between May 6th and May 15th will just keep their shares at a price determined by the market - most likely around what it is now."

        Absolutely not. The share price of NCT will be reduced by about the share price of the when-issued NRZ on the May 16th ex-date.

        "am I completely misinterpreting things?"

        Yes. Completely.

 
NCT
12.99Sep 19 4:07 PMEDT

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