1. 80% of NAV on expiration date of 10/30 .... .80 * 14.52 = $11.62
2. 95% * Volume weighted average of closing price on expiration date + 4 proceeding days. That weighted average was $11.75. So, price under this formula was 95% of $11.75 = $11.16
Offering placed at higher of $11.62 or $11.16 .... $11.62
As I indicated, a #$%$ person wrote the press release.
I was an idiot. I participated in the offering. Only for a very small number of shares though. It kept me motivated to track the results. Based on how they priced it, I knew it was a busted deal right out of the gate. But, I have traded these often and track every one I can to understand the trading patterns. The last couple have killed my P&L though. So, I'm not an expert. Still, I'm intrigued with them given the number of different angles one can trade them depending on how they are structured. This one was structured by a mentally challenged idiot. I suspect that's why they're having so much trouble getting shares allocated. Behind the scenes of this deal, chaos probably reins. This is the most poorly managed closed-end rights offering I have ever witnessed. And, I've tracked and traded more than I have fingers and toes to count with.
The fund manger CFO needs to be fired, along with everyone else who touched this botched offering.
What's up with the terrible performance of this fund? NAV down almost 10% for the year, while overall mkt at breakeven. They've been sitting on a pile of cash throughout this last month while the market has surged 9% or so. No excuses for such poor performance.
They botched the formula for pricing the offering. As a result, they only raised a fraction of what should have been raised if it was priced correctly. Why is this important? It's important because they opened a window and threw the offering administrative costs away. This was our money they spent on this inefficient, ineffective offering.
Not only have they proven themselves complete clowns in executing on an offering, they royally botched the press release about the results. This press release is among the very most confusing I have ever read in regards to the results of a CEF offering. The actual offering price was $11.62. But, to read the release, you would think it was $11.75.
Honest to gosh, there are complete and utter idiots running this fund. Run, don't walk, to the nearest exit.
Is there a reason this fund is under performing what a 3 year old can do? How much do they pay the idiot fund managers? I'd like their job. I could throw darts at a board and do better. Or, I'd collect their salary, subcontract the stock selection out to a monkey and still beat the pants off these clowns. I'd bet that Trump's hairpiece could even do a better job at stock selection. If not, there's a big rock out in my backyard that could outperform. Heck, these clowns should come over to my house at midnight and get stock tips from the possum that digs through my trash cans. They couldn't do any worse, that's for sure.
Honestly, why are the people who manage this fund actually employed?