This just-in-case-before-the-vote sell off is gonna make me about 20% more than I anticipated. The reasoning is obvious: tomorrow 150m more shares will get authorized and this might create some "omg, they are diluting" heads to panic. The problem with this reasoning is that it's not a corporate event. It's a shareholder event. This proxy vote is a shareholder vote. Ie, the vote of the people who'd be doing the would-be selling. Every corporate event does cause a short pull back of the uninitiated. But the event which people who own the stock have brought to be is not gonna cause them to sell the stock. Today's shorts are getting burned tomorrow.
Oh, and don't even bother with another "when is the SPO?" nonsense. It would be profoundly disrespectful to the shareholders to distribute the dividend to those who've held the stock for 20 minutes instead of those who have held it for a quarter. And this is precisely what happens when a company does an SPO right before a dividend. I would expect SPO within the 1st 6 weeks of ex-div. Earlier rather than later to avoid all the irrelevant QE2 and Aug 2 dates (which have 0 effect on this stock but still cause stupor in the markets).
"It would be profoundly disrespectful to the shareholders to distribute the dividend to those who've held the stock for 20 minutes instead of those who have held it for a quarter"
You mean all the longs got dissed last Dec 9th, and folks like me that made lots of money on options got non-dissed? I say BRING ON the disrespect to the longs!!
BTW...This is a perfect example of the advantages of trading options. The option trader doesn't care whether the spo occurs B4 or post EX. History says AGNC bounces back within a few days either way, whereas the long share trader suffers the dip in the PPS and corresponding loss in share price at the spo and can only hope for a BE on the bounce back.
Randy, I will be buying a boat load of OTM short month options at offer and some ATM-ITM mid month options and some deep ITM Leaps. Spend it all gents and ladies. I'm starting to itch to get rich!
it does not matter when spo is done wrt the div cycle. If new shares are to get the distribution - they pretty much have that in the offer price, so the new shares get the money they just paid in.
yes they do tend to act as a pack, it's because they are playing off of the same rule book and target the same asset class. The stars get aligned when paper is avlbl at attractive price, giving a yeild which would create a good spread against the expected funding environment.
... It would be profoundly disrespectful to the shareholders to distribute the dividend to those who've held the stock for 20 minutes instead of those who have held it for a quarter...
-- I believe there are many shareholders who have held for a (or even more) quarter will take the chance and add more position if a spo comes before ex. No disrespect, only more benefit. Good investors have to prepare and take, not miss any chance, and take no nonsense disrespect. I take ARR's recent spo a great example. Anyway, it's anyone's call. GL
Something tells me it isn't "anyone's call". With the odd exception, the MREITS act at very similar time. The stars must align. Exactly what those stars are, and what coordinates they must have to be properly aligned is still outside of our knowledge. But those in the know, know; otherwise they would not act as a pack as they did in March.
Well said....This is a finance company. It raises capital, leverages that capital, hedges risk and pays healthy dividends...Why some fear new issuance of stock is as you say a laugh. If AGNC has the opportunity to acquire good assets they should.