Yes, that PSEC report seems to say more that they don't know what leverage will be post spin that the other way around.
in our view, the spinout isn’t as exciting or as lucrative as was portrayed on the conference call.
He also doesn't have any basis for this type of claim.
It makes sense to me that if the businesses to be spun out are expected to trade at a premium to book value, and PSEC is trading at a discount to book value, then the spins should increase the share price of PSEC. Why not? If the spins are not expected to trade at a premium to book, then don't spin them out. However, if they do trade at a premium to book, then the spin should unlock value. As usual we won't know for sure until more detail is provided, but it seems reasonable to expect the spins to be a positive catalyst - this guy seems to have concluded the opposite, but based on nothing.
in the end and no matter what the vehicle, the same management team is operating the asset pools and this team just reduced shareholder dividends by 25% while their comp is up 30% yr/yr.
That's a fine complaint, but in analysing PSEC today, he neglects to point out that PSEC's share price is down ~30% year over year. THAT alone makes it a much more attractive investment than it was a year ago. Buy low, sell high, ya know. If he had been such a bear a year ago when PSEC was $11 then he would be a smart guy, was he? |
