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Adam Aloisi
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A full time investor in stocks, bonds, options, and real estate who previously worked as a financial/investment journalist/analyst. Previous industry stints include privately held SageOnline Inc. - where he held multiple positions - as well as Multex.com, acquired by Reuters, where he was an... More
  • Interview With Prospect Capital (PSEC) Co-Founder/President Grier Eliasek! 12 comments
    Feb 27, 2014 9:31 AM | about stocks: PSEC

    Readers: I will be interviewing PSEC's Grier Eliasek tomorrow afternoon, with an article posting in days to follow.

    If you have any pertinent questions for Mr. Eliasek or would like to discuss the company with me prior to the interview, please post them in the comment stream below or send me a one-on-one message. Your interaction here should provide for a more interesting interview.

    Regards, Adam

    Disclosure: I am long PSEC.

    Stocks: PSEC
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Comments (12)
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  • VeloMaster
    , contributor
    Comments (20) | Send Message
     
    Adam,

     

    Thanks for the appeal for questions and looking forward to your piece. My question is as follows: Could he please explain the business justification for PSEC's move into what is, for it, non-traditional investments, ie real property and auto loans? Do they have the expertise? And why not stick to their usual space, where they have had real success over the years?

     

    Tks,
    Velomaster
    27 Feb 2014, 11:00 AM Reply Like
  • goldenretiree
    , contributor
    Comments (1539) | Send Message
     
    Is the Nicholas deal going through? How much resistance from Nick's shareholders?
    27 Feb 2014, 11:34 AM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » @VeloMaster/goldenreti... thanks for the input. I do have on a list to ask him about the Nicholas Financial (NICK) deal, it's rationale, IRR expectations, but will also ask him to comment on RE and if he's still expecting an April close on NICK.

     

    AA
    27 Feb 2014, 11:57 AM Reply Like
  • DividendGamer
    , contributor
    Comments (25) | Send Message
     
    What does he feel the long term impact to the overall group of BDCs, and how it impacts PSEC specifically, with the recent news of the S&P Dow Jones has decided to remove all identified BDCs from its U.S. Indices?
    27 Feb 2014, 07:46 PM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » Hi DividendGamer...Given the downward spike in the entire group on the news, it's a very pertinent question to ask. Thanks for the input.
    27 Feb 2014, 08:50 PM Reply Like
  • Kame
    , contributor
    Comments (60) | Send Message
     
    Thanks AA,

     

    I second DividendGamer's straightforward question. I am also curious how he feels PSEC will do in an interest rate rising/lowering or neutral environment. I ask this because I had been pretty convinced that rates would rise. But now I am just not so sure.

     

    I'm still long PSEC.
    27 Feb 2014, 10:53 PM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » Hi Kame... I do have it on my list to query him about the macroeconomic environment and his inclinations/positioning for the portfolio.

     

    Thank you for the input!
    28 Feb 2014, 06:08 AM Reply Like
  • Prospect Capital Monitor
    , contributor
    Comments (15) | Send Message
     
    Hi Adam,

     

    I have two questions to suggest:

     

    1. Prospect Capital has been named a defendant in a class action lawsuit brought by Marvin Biver, a shareholder of Nicholas Financial. In the complaint, Prospect Capital is accused of violating the Securities and Exchange Act. Could Grier respond to this lawsuit? Will it affect the Nicholas Financial acquisition or its timing?

     

    The complaint: http://stanford.io/MAlpgk

     

    2. PSEC was recently dropped by S&P. S&P explained: “After consulting with clients concerned with certain reporting requirements, expenses, and investment restrictions relating to business development companies (BDCs), S&P Dow Jones has decided to remove all identified BDCs from its U.S. Indices.”

     

    Wells Fargo analysts Jonathan Bock, Ronald Jewsikow and Gregory Nelson warn that BDC shares will be sold off as a result of the index change, so investors should be ready for technical selling and volatility over the next few weeks. PSEC’s price fell 3% following the announcement. If PSEC’s price drops below its most recent net asset value per share of 10.73, will Prospect Capital continue its ATM share issuance program? Should investors be prepared for below NAV issuance?”

     

    Looking forward to your article. Thanks.
    28 Feb 2014, 12:56 AM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » Hi PCM... As I mentioned to goldenretiree above, I will be asking about the general progress on the NICK acquisition and the anticipated closing thereof.

     

    I will certainly ask him about this week's news from S&P, which I think we're certainly all interested in hearing his perspective about.

     

    Thanks for the input.
    28 Feb 2014, 06:37 AM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » Good morning readers. I have posted an article relative to my discussions with Grier Eliasek. which is now live.

     

    http://seekingalpha.co...
    3 Mar 2014, 11:12 AM Reply Like
  • lstahler
    , contributor
    Comments (859) | Send Message
     
    Great job Adam. Thanks so much! Did you ask or know why they keep selling shares? As that dilutes the income spread. Or are they doing it to keep the div. under 12%? As you say, many investors merely think that a stock is too risky if the div. is higher than a double digit.
    5 Mar 2014, 12:01 PM Reply Like
  • Adam Aloisi
    , contributor
    Comments (5503) | Send Message
     
    Author’s reply » Ist... I did not discuss share issuance with Mr. Eliasek - another question I had on my list, but not enough time. Hypothetically, if they are issuing shares ATM above NAV, this would considered an instantly accretive move - but obviously predicated on the investments being made thereafter.

     

    With the share price now sitting roughly in line with NAV - the wisdom of share issuance would have to be questioned.

     

    Regards, AA
    5 Mar 2014, 12:37 PM Reply Like
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