The key to the whole thing is what happens after exD. Will it recover the amount of the dividend? This is influenced by investor's feelings towards WMC, but also towards MREIT's in general.
Essentially, investors have to put WMC in its own class; out-performing all others. ((Personally, I think it is, but what does the market think.)) MBS are down more in December, but their performance for the first two months of this quarter was brilliant. If you can take the volatility, I would probably hold 'cause these guys look like they can take the heat, and the stock will recover exD. If it drives you bananas, and the stock runs up past $17 in the next day or two, sell. If you like to trade, sell now above $17, and buy back down $3.50 after exD.
Agree, Mario. There are MREIT's that pay no more than RSO, and I consider any MREIT riskier than RSO. I have a butt load of this stock, and am happy to get the 13.5% yield. All things are going in the right direction for RSO .... I'm staying with it.
You get the $0.80 divy in cash, that part is easy. Then you get $1.55 for every share you own prior to exD in the form of stock. If you had 1000 shares prior, you will get $1550 towards the purchase of more shares. So, depending on the share price the day before exD, you will get something like one more share for every 11 shares you own now. This results in fractional shares, but I guess the brokers can handle that. On exD, the share price will be reduced by $2.35.
I sold 20,000 shares, but still have 30,000. At a $4.00 gain, I'm going to take a look at that Porsche Cayman again. I think I deserve it for clicking those keys several times.
I never short, but it would seem so. The shorts would owe their brokers whatever the brokers would have had they held through the spin .... seems to me. Also, shorts pay dividends if they're short the day before Ex-D.
Agree Dawson ...
If Dar helps someone with a $100, that a good thing. I don't know his real feelings about it, nor do I care. Don't look a gift horse in the mouth. He did a good thing, and if he feels good about that .... yeah, so .......
In the commercial world, every deal is different. Generally, it's like your home wherein the mortgage is paid off over time, but it is likely to be replaced by other mortgages on other properties that the REIT buys as Dar says below. Unlike your home, however, commercial properties earn income and have expenses that your home does not. So, it is dangerous to generalize too much.
When I was younger, I was VP/controller of several billion dollars of commercial real estate. I worked for the 2nd largest limited partnership syndicator in the U.S. so I have some experience with this. That industry died 30 years ago when Congress changed the tax laws so that passive real estate loses [from depreciation] could not be deducted from regular income anymore by the limited partners. R. E. loses from limited partnerships can only be deducted from R.E. income now. That was a major benefit lost, and people looked elsewhere for better opportunities.
I think you're missing the point of the spin. Having the management company lumped in with the REIT meant that the whole thing was valued by the stock market as a REIT ... a much lower valuation than the management side should have gotten. Now, the REIT will still be valued that way, but the management side will be valued as a management company at twice or more of the REIT valuation. The stock price action lately shows the value of that.
College books have gotten really expensive. One of the grandkids was telling me about her $75+ textbooks.
I always give our housekeeper a few hundred extra this time of year, and it really helps her out. And I always give extra to the food banks, homeless shelters and humane societies this time of year. I would like to thank Hamo for bumping our earnings so far this year from 24.5% to 29.5%. Merry Christmas to the boyz at NRF.
I don't know how they predict anything. About 50% of NCV's bonds have a convertible feature. Those are hard to predict, but the market is at an all-time high. They also leverage their bond buying. With repo and other short-term rates extremely low, NCV could bump the leverage a little to maintain the divy if they want. In short, I don't think anyone knows, but it is obvious that NCV wants to maintain the $0.09 ... look at the divy history.
" ... those who give quietly ... " are introverts, nothing more. Braggers are those who exaggerate the truth, or who tell the truth for the purpose of making others feel bad. I don't see that in Dar. I like to hear factual accounts of success .... gives me courage.
I also believe that helping grandkids now is a lot more useful that waiting 20 - 30 years until we're gone. So, we are making significant contributions to college and down payments on houses. When I think back on the difference it made for me to not get these benefits, I know it is the right thing to do. On the other hand, I don't have a lot of interest in giving 50 year old grandkids a million dollars each, or whatever. I'll probably find a good charity like the university where I attended college ... they had a lot more to do with my financial success than any of the kids.
I thought they were brilliant to goose the stock price some to better reflect the economic value of the company. Why sell stock at an under-valued price .... how does that help us shareholders. These guys are the best in the business ... let them work.
I like this management. So, what the heck, I added 5,000 shares to make it an even 50,000. Makes it easier to do math in my head.