I think RAS will be looking for a much better than 8% yield before doing another follow on offering. $10 won't cut it on a 20 cent dividend. If they can do bonds at better yields (and they can), they'll do bonds.
I don't think RAS next issue will be based on the dividend so much as RAS cash needs, the markets reaction to the dividend, and the cost of capital in the bond market.
1 - I don't see RAS doing a follow on offering from above a 7.5% yield so long as it can get money from the bond markets at about 7.5%, RAS price will have to move higher (and its yield lower) before we're likely to see a follow on offering. Given the usual shenanigans that surround stock offerings I would guess that RAS won't even consider doing a follow on offering if the yield on the common is less than 7.4% (that's what it was just before the last follow on offering). Given the persistence of RAS dividend increases, I'd like to see RAS wait for something closer to a 6.6% yield. Bond yields are lower than follow offering yields over the long term.
2 - RAS had $120 Million of unrestricted cash at the end end of 1Q and proceeded to raise $60 million from a bond sale and recover about $50 million from the securitization. That $230 million ought to be enough to finance two more securitizations this year and participate in two IRT follow on offerings. The securitization would cost about $110 million total. The continuing investment in IRT would cost about $20 million. That should carry RAS into 2015 with over $100 million of unrestricted cash even if they do no additional fund raising. Bottom line, I wouldn't count on new fund-raising before next year.
I think that longs would be pretty happy if RAS managed to securitize the level of new bridge loan production (upwards of $550 million) those numbers suggest. If production is faster than that RAS may need to reaise money sooner.
I read the filing from 3/27/14 again.
I am wrong about the cash. RAS got their cash before quarter end and therefore, I was double counting. I believe you are wrong about the warrents and the SAR that RAS issued as part of the deal. However, I think the most likely scenario with how things are going for RAS would be for them to issue a 180 day unsecured note in order to fulfill their obligation to Almanac. This would avoid dilution and permit RAS to control how and when it funds its balance sheet. There will be no urgent need for Almanac to cash out. They can ride RAS for quite a while and will enjoy doing so.
Plus, another $35 million from the Preferred D issue. That's $265 million. Plus, at some point Almanac can hand RAS another $57 million.......or so.......it will be new additional shares, but it seems you were correct and Almanac is in no rush to do it. They will let RAS put cash to work and raise the operating performance as well as raise the dividend before "burdening" RAS with unneeded cash.
RAS is in a very sweet spot right now.
I think we've discussed this before, but selling a stock when you get to break even is one of the most fundamental errors investors make. I know people who sold Apple at about $20 because it had "finally got back to break even". I advised them not to do it (based on the growing success of the ipod). 30x later ...
So what does make sense:
1 - If you don't believe in a stock, or at least believe you have identified a better opportunity, you shouldn't wait to break even to sell.
2 - If you do believe in a stock, or at least that it will do better than alternatives, you should assess likely future returns rather than settling for break even.
3 - If you believe a stock will rise 25% and reach your break even you should consider growing your position and eventual profits.
I'll be happy if RAS gets to $10 this year, but I still think it will make $11 (and pay me at least 57 cents in dividends on the of the 17 cents I've already collected this year), so while I'll probably sell some of my position at $10 (taking profits and setting up a cash position in case RAS subsequently goes to $9.50), I'll keep most of my position at $10 and look for $11. Further, I think RAS will go to $13 next year and pay at least 91 cents in dividends for the year. I imagine I'll take profits at several points between here and $13.00, but that I'll arrive at $13.00 with at least 80% of my current position and a bigger total quarterly dividend than I have now.
Obviously, what you do is up to you.