On the CC they said that they were going to pay in all shares and no cash. But they did not say the ratio and I so far have not been able to find it. I hope that they have sweetened the deal since I think they low balled RGP to start with.
You need to go to their website and click on the CC link. Instead of selling I would suggest that shareholders write to IR and ask them to tell management to start defending their book value and buy back shares. If they do not then I would sell.
If you are disappointed then everyone should write to investor relations telling them to buy back shares and support the book value rather than sell shares below book and destroying value and diluting shareholders and then lowering dividends as they are now doing. I wrote to them and said I would not be buying till they change to a more shareholder friendly company.
I sure hope you and those here who are so positive and blinded by your bullishness push the stock price well over $9 so I can buy the puts back. My thoughts are that Buzz had linked to the 10 K that gives fact instead of hope that you have. I too have looked at these assets and think one must be realistic about them. While I also think we are either near or at a bottom in oil and these investments will be alright no one will know till these CLOs are sold for a profit. Bottom line is if you are not concerned with PSEC selling stock below book and destroying book value while at the same time a larger share count is driving down earnings and the dividend then buy and buy big. I want out of this company but do not want to lose any more money. Also I am listening to the CC and when they were about to tell their exposure to oil in the CLOs another person stopped them and switched the subject, so I was right about what they would do.
This is per BDC Buzz; Author’s reply » Darnoc - Check out page 121 of the 10-Q. It shows $235,544,000 of direct oil & gas and $57,372,000 of direct energy. That accounts for 4.5% of the portfolio but does NOT include $1,123,283,000 in CLO investments with a footnote that says:
(1) Although designated as Diversified Financial Services within our Schedules of Investments in Item 1 of this report, our CLO investments do not have industry concentrations and as such have been separated in the table above.
I'm sure this will be discussed on the call
The 4.5% is direct exposure through their investments. This does not include the CLO's that are leveraged. Like I said maybe someone will ask in the CC today. One problem is that the CLOs are leveraged and this can knock down book even faster than their direct investments. You need to dig deeper to get to the truth. I owned another stock once CEG and they buried in their 10K that they were leveraged to something and the leverage collapsed the stock. Not saying this will happen here but leverage can kill a stock.
PSEC today said they have direct exposure of 4.5%. But does anyone know if that includes the CLO's. My thoughts is that it does not. Buzz said they have around another 18%+ exposure in the CLO's. The CLO's are part of the 30% allowed leverage the BDCs can have, so exposure here can be more than they say.
In the conference call hopefully someone will ask how much exposure they have to oil, and hopefully they answer it. Though I doubt they will publically answer the question because of fear of being sued for being wrong.
BDC's have to payout over 90% of their earnings to be tax avoided, but they can keep some of the money and pay an excise tax on it till they pay the money out. I guess you would rather management keep making investments that Might make money rather than buy their stock back that they are guaranteed to earn 20% on. I understand buy high sell low, but I usually like to make money rather than loss it like you.
I would agree with you. I actually would like to buy but I am tired of their management only working for themselves and not the shareholder. I had own PSEC since 2008 but sold to take advantage of the losses I had. If I saw them buying back shares I would join them in buying since this would put a floor under this stock. But seems many here think a dropping book value and dividend is a good thing, buy high sell low. I think the stock is up today because oil is rising and this is good for PSEC since they have a lot of exposure to the oil industry.
Finally someone who gets it! Though I think management will be forced to do what is right or a hedge fund will come in and make the changes themselves. I would hold PSEC for now since it is so undervalued. But if management does start buying back stock and paying down debt the stock will rocket back up to around the $10 area.
If they use their cash to do more deals then tell me where will they get a 20%+ gain with no risk? I would like to buy PSEC back, but I refuse to buy till they start caring more for the shareholders than how much more they can earn in fees. Look at how their book value continues to drop due to their selling stock for less than book. This is also partly why they have had to cut their dividend. Instead of working from a position of strength they are working from weakness. I would rather be a shareholder than a bagholder.
They stated recently that they have had a lot of pay downs from old investments. So this is where the money can come from.
The real question should be is why are they not buying back stock and debt, to keep debt to equity in line, when they can not get a 20%+ gain plus 12%+ dividend, with no risk, by just buying their stock back. If you know where we can get a better deal than this I sure would like to know, because I would sell everything I have and buy it.
Management needs to step up and reduce debt and buy back stock while the stock is more than 20% below book. Where else can they get an instant 20% gain plus dividends of over 12% with NO RISK? I think that many like me are waiting to see if they step up and do the right thing before buying. Otherwise why buy this stock if the company will not? If they do not step up then this tells us they are more interested in their own income than shareholders income and equity.
Seems we do have a voice and will be able to vote. http://seekingalpha.com /article/2830396-qep-midstream-partners-20-percent-near-term-upside-in-a-takeout-and-40minus-60-percent-longer-term