I admire your courage in buying Horizon. Greedy management is one thing; however, a rapidly falling net asset value suggests management that is truly incompetent. I have a feeling that the nav will continue to fall significantly due to poor screening of prospective investments.
This is truly amazing. A bdc with management that is even more inept than the management of FSC! Whatever else you can say about FSC, the earnings may not be all there, but at least the net asset value per share has been stable. This company's investments generate good income; it is too bad that only a little bit actually finds its way to the shareholders.
You are absolutely right. I would not have thought it possible but this business development company is even worse than Fifth Street Finance! Perhaps the same family runs both companies?
Thanks for getting back to me. It is clear that I better not file until right before 4-15, and only after I have checked with my broker to see if any last minute change to 1099 form have been made.
Why the big drop in FSC? Is it simply because of the problem with the indices? This stock has been hit much, much harder than PSEC by comparison.
I do not think there is any conspiracy here to destroy business development companies. Think about it for a moment-it is not easy to pigeonhole BDCs compared to other companies.
PSEC said in their last conference call, that while they can issue shares below net asset value, as a practical matter, they won't do it because they receive severe criticism when it happens. The company is large enough and has enough of a long term track record that they can issue debt securities.
Will the company be able to grow 40 to 50 percent a year? Well no, obviously, not anymore.
I can not see how a new BDC can prosper now. Removing BDCs from the indices is going to reduce
the ability to raise funds through stock offerings, and BDC debt is only going to be purchased by investors, if it is purchased at all, if it comes from large BDCs with a long term track record, such as FSC, PSEC, etc.
I have a tax question, and perhaps somebody can help. I bought 3000 shares of TWO, and I still have them. I received 147 shares of SBY, and then sold them immediately for a small short term capital gain. According to Etrade, which had my account, the 147 shares had an adjusted cost basis of about $2868, and the entire amount represented a non-taxable return of capital. When I eventually sell the 3000 shares of TWO, then I will subtract the $2868 from the about $30,000 I paid to buy the 3000 shares years ago.
Does this sound right or does the 1099 you received handle the spin-off in a different way?
FSC has finally surpassed its net asset value of $9.85. We need to be very careful. This company wants to do a stock offering if at all possible, but in order to do this, it must sell at a premium, so the discounted new stock can be sold to investors at current net asset value or higher. I think that a market price of $10.25 before x-dividend or $10.35 after x-dividend would provide a 5 percent discount to the market if the new stock offered were sold at $9.85/share. In my opinion, a 5 percent discount would be enough to get new buyers to come aboard. What does everybody else think?
I am stunned at how AWFUL the earnings report is! This company has ZERO net operating income from what I can see. The fees, expenses, and equity compensation that are paid during the quarter overwhelm the revenue received. How on earth does this company manage to stay in business???
I thought this was a terrible earnings report. I expect the dividend to be cut to fifteen cents per share. Note carefully that book value keeps dropping. This company is bleeding cash from what I can see. Their expenses are very high in relation to their revenues, in my opinion. Their AFFO calculation of fourteen cents per share is almost incomprehensible.
I picked up 11000 more shares at $11.00. Substracting the dividend gives a purchase price of $10.89, which is 1.5 percent above NAV. I consider this to be agood price, since the average BDC goes for about 10 percent above NAV.
Be aware that tomorrow could be an unpleasant day because PSEC was just deleted from the S&P 600 SmallCap index. Also, the stock goes x-dividend on Wednesday, so the price of the shares Wednesday afternoon could be much lower than it was on Monday.
I am very, very surprised by this news. You might want to contact the company (FSC) directly and ask for clarification. If Fidelity Brokerage does not have my tax info available by this Friday, I am going to make a big fuss. I am going to insist that Fidelity explain any possible delay to me in great detail, as I can not do my tax return in a timely manner facing this kind of delay.
I still believe that at least some of the dividend income will be return of capital; otherwise, how could the company pay much higher dividends than net income over the course of 2013?
Thank you very much. On Friday, I should be able to get Fidelity info and if they also say no return of capital, then that is it.
I have to admit I am a little bit surprised. The company cut the dividend because they were complaining that they were never able to actually earn the dividend. I was expecting a lot of return of capital.
I own a lot of FSC stock. However, Fidelity Brokerage is not going to make my 1099 available to me online until February 28 because they want to avoid having to send out a corrected copy later on.
Therefore, I am asking again: If anybody has received FSC dividend income on their 2013 1099, about what percentage is return of capital, if any, and about what percentage is long term capital gain, if any?
Thank you very much!
Has anybody had a chance to look at their brokerage statements? The 1099s were supposed to be available as of February 18. I am curious as to what percentage, if any, of FSC dividends for 2013 were either return of capital or long term capital gain, etc. Thanks!
Let me try to be more precise in my criticism. FSC apparently has a close relationship with certain private equity groups. The private equity groups do the heavy lifting here; after all, they make nothing at all if the buyout doesn't work, and obviously, they do not get paid interest as FSC does. By now, these private equity groups know what FSC wants in a loan, etc., etc., so where is this great effort on the part of FSC management? At least with PSEC, they do not sit around all day waiting for somebody to spoon feed them a deal. They are very active in looking for companies to buy, and they have been very successful. PSEC management earns their fees; what exactly does the management of FSC do???