Prospect speaks to accounting concern; lenders step up

Should the SEC force financial statement consolidation of wholly-owned companies, there would be no significant change in Prospect's (PSEC) leverage, says the company, nor any negative effects on taxable income. "We expect no negative change in our dividend paying capacity or change in our dividend policy through consolidation."

Total commitments to Prospect's 5-year $1B credit facility were boosted by $45M to $837.5M. The extra $45M came from three new lenders, bringing total lenders to 27.

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Comments (21)
  • locutus49
    , contributor
    Comments (1057) | Send Message
    Great news for PSEC holders. I'm guessing i was not the only person to call their HQs with concerns.
    13 May 2014, 09:11 AM Reply Like
  • Cash King
    , contributor
    Comments (1129) | Send Message
    Glad I bought more yesterday. Wonder if it will go up or keep creeping down today?.
    13 May 2014, 09:16 AM Reply Like
  • locutus49
    , contributor
    Comments (1057) | Send Message
    Right now there is panic among some SA posters, so hard to tell. There is another press release with more details that leads me to believe lenders have done DD into the whole SEC thing and are comfortable with PSEC's options.


    I highly doubt that I was the only caller, but I did ask them to issue a release to calm investors. I also suggested they not get into a war with the SEC, but rather accede or work out a compromise.


    I'm sticking with my holdings.
    13 May 2014, 09:27 AM Reply Like
    , contributor
    Comments (214) | Send Message
    PSEC is dropping fast today.
    13 May 2014, 09:50 AM Reply Like
  • tom bernardi
    , contributor
    Comments (507) | Send Message
    so what's happening today?
    13 May 2014, 09:52 AM Reply Like
  • just a user
    , contributor
    Comments (73) | Send Message
    argh, wish i had some dry powder. (long psec)
    13 May 2014, 09:57 AM Reply Like
  • Dividends#1
    , contributor
    Comments (4346) | Send Message
    I just bought 2 more lots for an average cost of $9.66, overall cost basis now $10.15 in my brokerage account and $10.70 in my retirement accounts.


    Wow it traded down to $9.17.
    13 May 2014, 10:18 AM Reply Like
  • ChrisJArsenault
    , contributor
    Comments (132) | Send Message
    Wow, $9.17!! Wish I woke up a little early today!
    13 May 2014, 12:11 PM Reply Like
  • xxavatarxx
    , contributor
    Comments (4933) | Send Message
    Hey, that looks good now Dividends.
    Trading at 9.89 right this second.
    13 May 2014, 02:25 PM Reply Like
  • Broadcaster 1
    , contributor
    Comments (733) | Send Message
    The rapid down draft in PSEC is panic selling and over-reaction. The press release today will eventually calm fears.


    I'm long PSEC.
    13 May 2014, 10:22 AM Reply Like
  • mahgni
    , contributor
    Comments (30) | Send Message
    I just added nine-thousand shares at 9.71 to the sixty-thousand I have accumulated and I just may transfer some cash to buy more if it goes even lower.


    I like their business plan and love their dividends more than anything I see from this marketplace and I believe the comments from their top executives to be truthful.s


    I'm not sure why these "analysts" are expressing doubt in those executive's statements, but I now have ninety-six-thousand reasons to argue with them!
    13 May 2014, 10:34 AM Reply Like
  • tomterp
    , contributor
    Comments (43) | Send Message
    mahgni: Don't you mean sixty nine thousand?
    13 May 2014, 10:38 AM Reply Like
  • ChrisJArsenault
    , contributor
    Comments (132) | Send Message
    Thank you, PSEC, for trying to calm the waters with your published statements. I worked for a utility once that was in a similar (accounting) bind. In fact, the financial talking heads compared our company to Enron. The stock went down over 40% due to vapid talking heads scaring folks. Our management issued a statement clarifying the situation, at which point I bought heavily (24 hours later, just to be clear of insider trading rules.) Well, a few months later, the stock had recovered 100% and the vapid talking heads moved on.


    Just focus on the facts.
    13 May 2014, 12:05 PM Reply Like
  • locutus49
    , contributor
    Comments (1057) | Send Message
    Be careful I simply wrote the statement that people should focus less on insinuations of wrong-doing and more on facts. And that post was deleted.


    Insinuations are all too easy for writers and posters to make, and require no evidence to do damage. I wish SA editors would pay closer attention to hidden agendas and insinuations of authors who are likely to affect buy/sell decisions with their articles.
    13 May 2014, 12:21 PM Reply Like
  • AlaskanGoldMiner
    , contributor
    Comments (121) | Send Message
    Picked up another 1000 on a weeks-old limit order @ $9.55. Congrats to those who got in near the $9.17 low. I need to free up a bit more dry powder. Not sure we have seen the end of this yet. Long PSEC.
    13 May 2014, 12:57 PM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
    I just added another 650 to my hill of PSEC shares. Good move? Bad move? Must be I thought it was a good move. I think the seas will calm in a bit and these shares will actually show some appreciation soon, however; I'm in it for the dividend. Share appreciation is frosting on the cake. Good buying opportunity today, even if one wasn't an early bird for the big drop...


    Long, long PSEC.


    13 May 2014, 01:01 PM Reply Like
  • gvcole
    , contributor
    Comments (2) | Send Message
    Mötley Fool had a series of negative press releases today. They have many retail followers.
    13 May 2014, 08:55 PM Reply Like
  • timsabin
    , contributor
    Comments (76) | Send Message
    Before the drop, Motley Fool had a positive article: "If the price drops below NAV, you'd be a FOOL not to buy!"
    19 May 2014, 07:13 AM Reply Like
  • tjc4220
    , contributor
    Comments (11) | Send Message
    Management has manufactured earnings, in my opinion. It is a fact they have invested capital into portfolio companies while simultaneously taking a dividend. It is a paper shuffle. Compare the company's earnings to a scenario whereby they would NOT have executed the paper shuffle: less earnings. These are non-economic transactions with no bona fide counter party.


    I try to look through the accounting treatment (consolidate control portfolio companies vs. non-consolidation). The accounting treatment doesn't matter. I do not trust a management team that uses maneuvers like this to boost the bottom line. It can only continue so long. I sold my couple thousand shares. Not worth the risk of seeing the stock tank, since there is no upside. This stock used to trade at over $15 a share; those days are long gone, as per share book value consistently diminishes.
    13 May 2014, 11:13 PM Reply Like
  • locutus49
    , contributor
    Comments (1057) | Send Message
    When did PSEC trade at over 15 a share?
    19 May 2014, 02:15 PM Reply Like
  • Cash King
    , contributor
    Comments (1129) | Send Message
    Last time was May 27, 2008...
    19 May 2014, 06:16 PM Reply Like
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