David is probably right. There were two unusually large sales this afternoon and several smaller but still significant sales orders in between. It looks like some large institution was selling. It might not be over. It is doubtful that the sales were about PHK. Whoever was selling probably needed the money for something else.
I've had this happen from time to time about a dozen times with other funds I've owned. Its scary. Another fund I owned (HPF) once dropped $0.40 a share within seconds in a sudden selling spike and then later recovered over the next few days. My experience so far has been that it never has any lasting effect. After it ends the price recovers. While we don't know for sure who is selling or why in my opinion this selling probably has nothing to do with the fundamentals of PHK.
Sometimes things really are simple. I have a second cousin by marriage. Years ago he inherited over a million dollars. At that time the rates on thirty year Treasuries were over 7-1/2%. All he had to do was invest the money in thirty year treasuries and he would have had an income of over $70,000 a year. Instead he day-traded the money and in a few years he had lost it all. When you try to short and trade in and out - that's when you lose money.
You know something? This fund currently sports a yield of 13.6% and has historically had a stable distribution and a fairly stable share price. You are over-thinking this. This is not a trading vehicle. This is a long term investment. If you invest today, set your account to automatically re-invest your dividends, and then just ignore it, your investment will double in five and a half years. Its that simple.
If that's not simple enough let me make it simpler. In five and a half years you will have your entire investment back. And all future dividends after that are "free." Very sweet.
It isn't likely in the near term. As of March 31st the fund's average net investment income since August of last year was $0.095 per month, which gives a distribution coverage of 90%. The UNNI is still a negative eight cents a share. I doubt we will see an increase in the distribution until the UNNI becomes positive. While I don't see a distribution cut, I think the likeliest course here is a steady distribution for the next year or two. (I'm getting these numbers from the Pimco web site.)
In my opinion this fund is a good long term investment for people who want the income. Or for investors like Silver who are dripping it. The distribution is steady, the share price is fairly stable, and the portfolio looks to me like it is well diversified. And Pimco is a good fund manager.
Shameless plug here. You may also want to look at Pimco's sister company Allianz Global. They have two funds that are similar to PHK and that look under-valued to me. They are NCZ and NCV. (In addition to PHK, I own shares in both NCZ and NCV.)