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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (13043)	11/3/2012 12:07:03 AM
From: Elroy	Read Replies (1) \| Respond to of 34328

I have to admit I don't completely understand the secondary offering process for PSEC. They announced the offering after the close on Thursday. They announced that it had priced before the open on Friday They said they expect the deal to close on November 7th. My questions: 1. Why didn't they announce the price of the offering on Friday when it was set? 2. Why didn't the offering close Friday when it was priced? What exactly happens between now and November 7th when the price is set, but the offering isn't closed? The share price drop is pretty depressing. I bought after the previous offering (June?July?) at $11.08. I was pretty happy to get the monthly dividends plus capital appreciation of about 90 cents in the past 4-5 months. All that capital appreciation has been wiped out and in fact turned negative at the closing price of $10.86. As a result of this secondary I've lost two months worth of distributions in capital loss. There has to be a more shareholder friendly way to do these secondary offerings. PSEC is going to raise about $400 million in capital, but they lost ~$170 million in market cap in just announcing the offering. There's almost no way that can be interpreted as good for shareholders. I'd much rather have them sell preferred stock that pays 8% than issue new equity that requires roughly 11% annual dividend payment and hurts the share price by 9% on the day of the announcement.