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JER Investors Trust Inc. Message Board

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  • adecinvestor adecinvestor Dec 28, 2008 11:41 PM Flag

    The only reason that JRT went up after

    I disagree: The company is retaining cash but issue more shares, right? So 1 share on 24th is supposed to bring in another share plus 9 cents. So the total number of shares should double. Thus pps should drop.

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    • pps is not necessarily directly correlated with extra shares. While divvies/share are diluted, there is no net effect if you got more shares. Every company issues more shares at one time or another. They are just bought up. Fewer shares is often OK, but if there is a market for the shares, some extra shares has little effect on the price.

      • 2 Replies to gsk10002000
      • "...some extra shares has little effect on the price..."

        GSK, this may be true when the % of new shares is small. However, in our case, the % of new shares will be significant, 66% more if prices stay current, a higher % of the stock price falls. That is going to make a big difference in short term pps. In the long run, I don't see an issue, because as the company gets stronger, and markets recover, all shares will get stronger. But there is volatility (therefore, opportunity) in the short run.

      • "...some extra shares has little effect on the price..."

        Also, if a significant number of people try to sell their shares soon after grant, there will be additional downward pressure on pps (not a direct correlation from the number of shares, but resultant of people wanting cash instead of shares).

    • That's what I've been saying all along. So since you're saying it now, are you a basher/shorty? Or just me?