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American Capital Mortgage (MTGE) prices its 20M share secondary with gross proceeds of $513M...

American Capital Mortgage (MTGE) prices its 20M share secondary with gross proceeds of $513M ($25.65/share). Shares -3.5% premarket to $25.65. Shares closed yesterday at $26.57 vs. Dec. 31 book value of $25.74. (PR)
Comments (3)
  • Boog
    , contributor
    Comments (103) | Send Message
     
    Someone explain to me why a 50% increase in the number of shares outstanding hasn't resulted in a significant drop in share price - since the book value per share is now about 1/3 less... ? What am I missing?
    12 Feb 2013, 10:22 AM Reply Like
  • 4skin
    , contributor
    Comments (2) | Send Message
     
    Boog, how do you get 1/3 less BV? They're probably netting somewhere around $24.36 per share after expenses, putting the new BV somewhere close to $25.20. A drop of around $.50. Are you not counting the cash they're getting in exchange for the new shares?
    12 Feb 2013, 11:23 AM Reply Like
  • Boog
    , contributor
    Comments (103) | Send Message
     
    Ah-ha! My bad... I did indeed not include the cash they will receive. Duh! :-( Thanks for the response....
    12 Feb 2013, 11:35 AM Reply Like
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