This news is from Schwab. Hope its not more common shares:
"New York Mortgage Trust Registers Mixed-Securities Shelf For Up To $500M
Jan 14, 2013 17:19:37 (ET)
(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)
January 14, 2013 17:19 ET (22:19 GMT)"
The shelf gives them the option to issue additional stock whenever they feel it's beneficial; this is not an announcement of another offering. However, there's little doubt that they will make another stock offering very soon after the shelf is deemed effective by the SEC. Another stock offering is almost certain within the next month.
So let me get this straight. NYMT has a market cap of $330 million but they want an option to more than double it. I can't say I like what management is up to here. It seems like they are just itching to double their management fees.
The filing doesn't say that they will issue any common stock. It's a standard shelf filing so that they can issue some debt, preferred stock or common stock, or some combination of all three. It's likely that they will issue some common stock, but probably won't issue all $500M as common stock. It will probably be mostly debt + preferred stock.
A bigger MREIT is a good thing. I like the idea of the money being interest free. Looks like MREITS pay a fairly high interest rate when they borrow.
These are good size offerings, maybe get some big investors involved.
When I first started studying high div stocks, I noticed one thing very quickly, as did we all. They all seem to keep issuing new shares. This firm seems to have had secondaries each of the last several quarters. It's like I'm afraid to hold this stock for too long.
REITs must pay out 90% of taxable income to maintain REIT status. Therefore, the only way they can grow is to raise new capital. Would you prefer that they remain stagnant and thus become in effect a self-liquidating trust?