As long as hedge funds and large institutions and mutual funds exist, there will ALWAYS be enough buyers to gobble up hundreds of millions of SPO shares. It won't even be humans making those trades; they use computers and programs to make those trades. Think SKYNET.
>>I sometimes wonder if this massive increase in shares will bring the AGNC price per share back to $28>>
Look to history...what did they do last May? They wanted to authorize a "massive" doubling of the outstanding shares from 150m to 300m. They did that. OK.
What was the PPS last May, right in the middle of the year of OT, HARP and SEC.? 29.20-30.37, from beginning of May to end of May.
What is the PPS now after this huge doubling of the shares? Exactly the same, and that after coming through the year of grief. So now they want to double it again. Great! That's the way they grow the business. It's worked so far, why would you think it would be different now?
I have this sneaking suspicion that at next May's mtg in 2013, they will ask that share count be raised to 1.2B shares from 600m, and folks will wonder , once again, about how the PPS will survive. You now know how to respond....history.
That will continue, indeed, as longer as they continue to grow the business (thru SPO's). But what happens in 20xx when they stop increasing share count and stop the SPO's? Future growth can then occur only through rising interest rates (and rate spreads) that generate more revenue (from mortgage interest payments). That's when the pps crosses $30 and stays well above that number end of BATESAT).
AGNC's future fortunes will follow interest rates and rate spreads ... up or down.