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Jbay76 (< 20)

Annaly selling more shares...AGAIN!

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February 15, 2011 – Comments (4) | RELATED TICKERS: NLY

For the second time this year Annaly Capital is selling another 75 million shares for what it says will go towards either "mortgage-backed securities for its investment portfolio and for general corporate purposes, which may include additional investments and repayment of short-term indebtedness."

They said the same thing last time, which was last month.  How many times are you going to do this to us NLY?!?!?!  Really, how many MBS's are there to buy before enough is enough.  What are the chances that they are using this public offering to help pay for the next round of dividend allotments?I am thinking that the chances are pretty good that a portion of the funds raised will go to that end......

I did some DD before buying shares and thought that this company was undervalued at that time and price, but this dilution of shareholder value is something I did not see coming. Heck, we are only 2 months into the year, they're on a tear, a 1:1 ratio of months lived in this year and number of offerings.

Any ideas out there.  Thanks to Male pattern baldness I can't pull out any hair in frusturation, its too early to drink my disgust away.........WTF NLY...

4 Comments – Post Your Own

#1) On February 15, 2011 at 10:28 AM, wjcoffman (67.50) wrote:

What's your holding timeline?  What is/was your investing "thesis" or purpose for buying?  Do you have "exit" criteria?  Seems like the interest rate "market" is leading them to take advantage of the MBSs and it appears to me they do this for a living.  Is short-term indebtedness = paying dividends?  Good question.  Where's the metric on the financial statement to indicate that's what they're doing?

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#2) On February 15, 2011 at 1:26 PM, ravens9111 (63.38) wrote:

I don't like this stock at the moment. If you read my pitches you can see why. Total MBS volume is on the decline. They can't make as much money if originations in MBS shrinks. Even if the "spread" increases, it won't be enough to compensate for the loss in volume. Refinancing is DEAD now and when rates go higher, it will be even worse. Purchases is the only way to compensate for the decline in refinance volume. Do you think  purchases can make up for a 50% decline in refinances? I don't think so. The stock will have to cut its dividend. When that happens, the stock will sell off. The new stock price will reflect a yield similar to what it is now. The only question is how much will they cut the dividend. 

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#3) On February 15, 2011 at 3:04 PM, cccisback (< 20) wrote:

I am surprised that the stock hasn't dropped even lower today to reflect the diluted shareholder value and even to a discounted value. 

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#4) On March 07, 2011 at 2:59 PM, Jbay76 (< 20) wrote:

@ravens9111...thask for the comments, they really helped me improve my understanding of the situation.  I'll go back and read your pitch of the stock.

Thanks

J

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