I forget just which analysts downgraded... one from wm blair mabe on ddd, ssys or xone and others, the message seemed pretty much the same, growth rate for the tecnology not justifying the whacko-true-believuh p/e's. i just find the whole spectacle funny, like modern Pied Pipers and Modern Sheep, ready to do as told. I could care less which way the prices go or the debates... all i want is my cut of the automated trading foolishness. i will say one thing though, i don't know if the anal-ysts have ever done anything but sit in biz school and the offices of brokerages... have they ever tried to make anything? do they really know squat about invention and just how useful these machines are or aren't? has any of these guys ever tried to fabricate a gas tank for a cafe racer or devise a new vacuum cleaner part or light fixture? do we really want to give them the last word?... doesn't matter what we want though because the Sheep are going to give em the last word and between the Sheep and the Automated Trading systems, "nature" will take its inevitable course... see ya in the 20's or 30's.... the whole overheated mkt could tank anytime now and leave the bag holders with their rueful thoughts about that other sell-in-may nonsense... is a tricky game for tricky tricksters... imagine though if you could trade on what you knew your analysts were about to slam or promote! and the rich get richer, do you have to wonder how?
maybe the execs and directors feel they should be paying themselves more... yes that'd be good for shareholders, cheer them good ol' boys up... do a secondary and gift 'em the dough.
Sentiment: Strong Sell
hmm... let me think now, first it tanks on this filing, then when they announce a secondary it really tanks big... guess i'd better peel myself a plastic dinosaur for lunch!
Sentiment: Strong Sell
the investuh sheep need a new raised target before they buy more of this plastic dinosaur ca-ca.
Leader! save us... analysts welcome... buy buy buy!
Sentiment: Strong Sell
yo slicktop4... go look at the CLMT news today and don't whine about my not being positive on certain symbols.... i gave you CLMT on a short list and i'm sure you spent the day feeling righteous and sitting on your mouse finger... oh well... a word to the wise is sufficient, a thousand page diatribe to a brick and the brick does not move.
wrong again... i like for instance the pullbacks in SAN, BAC and now that it has crashed i like GLD. i even like CLMT where the div is large and growing and mangement gets more in divs on the big shares it owns than they collect in salaries so their interests are aligned with shareholders. if you want leftovers and table scraps from psec hey, you are welcome to them and maybe it will trade up from here... i was just noticing that it hasn't done squat for months while the whole mkt has been going up but of course you are collecting that div and maybe feel good about it and will probably continue to love it unless management smacks you up with another secondary. all i am saying is that if they do, it will benefit them (because they own the management company that gets fees based on capital under management) but will it benefit you? will they continue to be able to pay the current div no matter how many loans they make? is the share price safe in a general market pullback? or a business slowdown? i don't know but as i said, if and when they do another secondary and tank the price again, i might buy it again if it goes low enough. meanwhile enjoy your breadcrumbs, i hope they won't get old and lose their crunch. maybe it'll trade up but if it hasn't from november to now, why should its price improve if the market is stalled or pulls back? i wouldn't short it and i have never shorted it but doesn't it make you wonder why it hasn't traded back up to high 11's or 12 as management glibly claimed it was likely to do on one of their recent conf calls after they did the last secondary? could investors possibly be finding the pattern of post-secondary sell-offs tiresome to get hit for 20 or 25% on a secondary while they collect 1% a month in divs? duh! i don't know... maybe!
Except for the fact that the management benefits from constantly raising more and more money to manage, this is a pretty good company is my guess but I will wait until it has another secondary... that's the only time you can buy stuff like psec... you sure can't take a wild poke at it at random mooments in the middle of a general market sell-off! not unless that "sinking feeling" appearls to your sense of drama. Better to wait until they do another secondary and buy after the accompanying sell-off, its the only way to make money in this junk unless you consider sitting on your duff and waiting for divs as "making money".... personally i like a generous serving of capital gains along with my divs.. suit yourself but remember Lincoln's phrase about, what was it? soup so thin it was made from the shadow of a pidgeon? that's what your divs will taste like if you have lost them in advance by the stock price going down down down before you ever see the divs. so either lets these goofs fix the structure of their made-for-management company or wait till they screw shareholders with their next secondary.... it shouldn't be long now, they've been making loans like crazy for half a year. good luck to all and READ HOW THE COMPANY WORKS IN THE SEC FILINGS!!! so you understand who really benefits from all the new loans... it isn't you.
so i know when this junk reverses and becomes a good short?
poor pavi pavi... got caught short pavi? WAC is not an easy company to figure out so you would have no way to know if its junk or not... you shorted it because it was going down so maybe NOW you'll remember to say your prayers, oh yes... and maybe you'll learn not to short just because something has gone down.
its interesting that SAN couldn't trade up into the ex-date... therefore i am hoping it tanks real good in a post-div sell-off, after all, if people won't buy for the one main thing it has to recommend it then why would they buy anytime soon absent other good news? so maybe we'll all get a chance to buy in the low 6's... let's hope!
oh sorry, you said i was unclear about what i meant by PSEC not recovering from the last secondary in november... here's what i meant: the whole market has been going straight up since novemenber... until the last coupla weeks anyway... and PSEC has been stuck and overall has gone from 12 back to right around book value... that relative underperformance is what i meant by its price not having recovered from the last secondary. and just to be clear, i sold my shares into the bounce from 9.60 so i am neither long nor short... just happened to look back at the chart and think it is stuck... of course the 0.11 cent div is nice to collect if the price doesn't tank next time they want to raise funds or in a general market sell-off. as to the issue of how they raise capital, it is dilutive, they only raise money in proportion to some number close to the stock price... usually at some significant discount to the current price so if they issue 15% more shares and get 90% of the then current price for the shares its dilutive. of course they use a little leverage, i think i recall a modest number like 1.3 or something in the neighborhood so maybe they can keep up the great divs. they've done a remarkably good job at increasing the div so far.
ok i went back to the N-2/A filing withe the SEC on 10/29/2012 to check my memory on this subject which you say is "baloney". start reading on page 100 under the subtitle Management Services.
here are a few quotes copied directly from that area of the document:
We have entered into the Investment Advisory Agreement with Prospect Capital Management. Our Chairman of the Board of Directors is the sole member of and controls Prospect Capital Management....
We may make sales of our common stock at prices below our most recently determined NAV per share. Pursuant to the approval of our Board of Directors, we have made such sales in the past and we may continue to do so under this prospectus....
Our Board of Directors also considers the fact that sales of common stock at a discount will benefit our Advisor as the Advisor will earn additional investment management fees on the proceeds of such offerings, as it would from the offering of any other securities of the Company or from the offering of common stock at premium to NAV per share....
The total investment advisory fees were $82.5 million, $46.1 million and $30.7 million for the twelve months ended June 30, 2012, June 30, 2011 and June 30, 2010, respectively.... end of quotes.
Do you know how to multiply? compare what the management company makes to what is left over for sharehoders and i think you will see what i am talking about. Perhaps i am interpreting this relationship wrong but it looks to me like the management company gets a disproportionate benefit and the shareholdes get the risk... but try reading it and have your own opinion... to me it looks a bit like -- lemme think what's a good word that won't get censored -- incest?
It seems as though the glib assertion on the part of management that the price of PSEC always recovers to previous highs turned out not to be true. The last secondary seems to have done real damage and made investors wary of how the managers are using this company. I think the managers gets paid based on assets under management and that puts their incentives at odds with shareholders. There is almost no way to change the managers because the whole setup is too incestuous and too difficult to form successful voting blocks and why bother anyway when the easiest vote is simply not to buy the shares in the first place. I think the div is so high because sober investors understand that the management and shareholder interests are not aligned. These guys have been spending money like drunken sailors since the november secondary so the question in my mind is: when does it get slammed again in the next secondary? I'll buy it for a trade next time it gets slammed again but i wouldn't buy and hold this as an investment. i think you really have to ask: why does this trade around nothing more than book value and i think the answer is just what i am saying: management is working for management, not for you. But good luck longs, i'll be happy to join you after the next secondary sell-off tanks the stock again way below book and to a huge div... otherwise i am staying away.
its not how smart you are... insiders and underwriters (or their pals) short thru third parties before secondaries... partly to make money and partly to neutralize long positions. after the panic selling ends they close out the shorts and buy more shares. logic is that folks who bought too high for the div get screwed and say hey! i am losing some multiple of the div every day, i have to sell this, something must be wrong!!! the market is correcting, etc. first they look to see what is wrong and note the new requirement for sulphur. they use that to scare themselves even more, now they "know the reason" for all the selling and that firms up their resolution to sell and at most buy it back lower. but when the panic selling exhausts stocks like clmt go right back up, sellers miss the lows, they are too busy selling at the lows. so ask yourself: where do i want to double up my position? and buy these mlp's AFTER they do their secondaries... remember, since they distribute 90% of profits they raise money by borrowing or by issuing shares. if they borrow they are stuck with the interest costs but if they do it thru share issuance they avoid that. if you had advanced knowledge of the secondary and owned 100k shares that you could protect and you could make money all the way down and all the way back up, which method would you choose?! (well maybe You wouldn't cheat but plenty of people do). execs time secondaries for market tops and life is sweet. don't whine about the SEC not preventing this #$%$...there are two sets of rules in amerika, one for ruling elites and one for suckers. my guess: max downside on this is 31/32 in the current mkt environment so double here and double again if it goes one more level lower. the world isn't ending just yet and the baby boomers will kill for yield. i bought the panic... lucky i noticed it.
The div announced by the ceo was 0.60 euro for the year. As of today my Euro/UD Dollar exchange rate says that one euro will buy 1.28451 U.S.Dollars. Therefore the equivalent is 77 cents in American dollars. $0.77/6.80 per share = 11.3% annual percentage rate... as of today anyway.
From the annual meeting on March 22, 2013: “Over the last five years, we have paid our shareholders a total of EUR 26 billion. He added that the aim in 2013 was to maintain shareholder remuneration at EUR 0.60 per share and that the bank intends to apply the scrip dividend programme in all four dividends paid against 2013,which is also in line with the European Union recommendation to use scrip issues to pay dividends. Since its launch, four years ago, holders of more than 80% of the capital have opted to receive shares,” he said.
I'm not exactly sure how this div works but apparently it can be taken in "scrip", i.e. in newly issued shares or in cash. SAN has paid the same 0.6 euro div for the last 4 or 5 years, right thru the entire financial "crisis" so I guess the crisis was a lot less of a crisis for them than for some less well managed banks.
Of course the bears would like us to believe that Europe will soon be sinking back down into the molten center of the Earth and they reckon SAN will be swallowed up or melted down, I am not sure which.
What happened to all those hungries that "can't get enough of anything related to housing"??? golly, did they scamper back into the Roach Motel on the very day when some genius raised the target to 70??? My, my... shades of AAPL... remember? got to 700, tgt raised to 1000 and it tanked like crazy... I think maybe the hungry roaches are retiring to theri murphy beds and looking for crumbs elsewhere..
Yes I think you're right about European policy makers not wanting to have a bunch of inept bankers setting up a huge financial services industry -- read: tax haven and conduit for un-friendlies -- in their own back yard. I just find it interesting that a good big part of the folks who are losing in the "bail-in" are Russian oligarchs. Normally ruling cliques around the world treat and support each other better than they have in this case. But I am not really presuming that Cyprus is the reason for the sell-off in SAN to have taken this most recent leg down in its continuing downtrend. There could also be concerns about other Euro problems but the concerns might also be about the Eurozone macroeconomy, about UK/Mexico/Brazil or SAN might just be going down because its going down. And I am not saying that any of those concerns are not real. I just feel like Europe will revive soon enough and the gloomy disdain for it will fade as it resumes growing, same as it faded here in the United States. Hard core pessimists could recite a long list of reasons why U.S. would be in a near-permanent recession, which of course didn't happen. Economies are in general more resilient than that and re-balancing forces are built into the world system. China won't always have it so easy and EU won't be held back indefinitely. I also don't think the upcoming dividend will suddenly stop the downtrend, i just think that SAN is becoming undervalued and over the course of let's say the next 6 months is likely to head back up and not just back to 7 or 8 but considerably higher eventually. And it'll be nice to collect the div in money or shares along the way.
Sentiment: Strong Buy
I was right that there would be no panic run in Cyprus, no panic, no riots. I think shorts on SAN were hoping for something much worse. As for Cyprus and the new "bail-in" policy goes, I think the Cyprus solution is about the Europeans disliking Russian business practices and taking this opportunity to get back at them thru their Cypriot accounts, I don't think Cyprus is a template for anything. The policy that would be applied in Italy or Spain or Ireland.
However what Cyprus did for the SAN share price was to reduce it to tangible book value and the idea that you are going to be able to buy SAN at $4 or $5/share is unlikely. You can argue that the European economy is weak now and some economies will double dip and so what? SAN is getting most of its profits from other parts of the world so my guess is that the institutional investors who determine where SAN goes will be buying for the same logic that they buy BAC... because normalized earnings are a lot higher within a foreseeable future and whatever write-downs remain will either be minor or currently doubtful assets will actually improve. Recall that American real estate was never going to recover either according to the doomsters. The world economy is in the process of rebalancing as China's labor rates go up and more manufacturing moves to places like Spain and Mexico and back to the United States. Depressed wage rates in Spain will be a plus as time goes on. Maybe I'll be wrong but that's what I am guessing. I read that auto factories are already moving to Spain.
Anyway I've got half a position in SAN so if folks want to sell it for another 10 or 20% discount to book I'll be happy to take shares off their hands. Cyprus made for a good leg down in SAN which I think institutional buyers will see as opportunity not disaster. The sudden-expert pundits will blather on, people will miss the lows and in the low 7's they'll be chasing it, not selling.
The Doomsters love these situations!!! I am buying and when the big bust turns out to be a big nothing I am buying more... there's always some gullibles around ready to believe the world is ending.