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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (47051)	2/14/1999 1:23:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Bonnie, CEF rights offerings are a way for a mgt. co. to increase its fees at the expense of shareholders. Basically, for each share you own, you get the right to buy a % of new shares at some sort of discount. That sounds good, but value cannot be created out of a fixed pool. That means your current holdings are diluted. Also, since it costs money to get the info to the public, you actually lose money on these scams. To Royce's credit, his are some of the most efficient rights offerings in the biz. He usually only stiffs shareholders for 2% or so, while most cream them for up to 7%. But my feeling is that even petty theft is theft. <G> And 2% can mean a lot in a CEF. I know it irritates the heck out of a cheapskate like me. MB