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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (29327)	12/19/2007 12:02:39 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78751

Yes, that's why some people have said these are Ponzi schemes. Dividends are paid to shareholders from proceeds from new stock that's issued. So it is alleged/assumed/stated by some. Stock issuance is a way of life for ACAS, ALD, other bdc's. It's the business model, and it's the way these companies grow. Periodic issuance of stock is not dilutive because the stock is issued above stated book value - not below stated book value (which would be dilutive). The money they get from the stock issuance is put to work: it's levered and the returns on that money increase earnings (and book value) over all the outstanding shares. ---------- Adding to my ALD position a little today. Here's an article from Jan. which describes some aspects of bdc's. fool.com