User 305589

American Capital Strategies: Management Credibility in Question

@starkawa: regarding your concern, as i read it, the analyst started to engage in an accounting argument with mgmt. it is fine to ask questions for clarification purpose. but to come up and try to lecture people like malone Wilkus on accounting during a cc amid an extremely volatile and stressful market environment, imho, is weird.

American Capital Strategies: Management Credibility in Question

sorry but i can't follow your rant against mgmt and your 'credibility' stuff. Few if any would have expected the kind of october massacre especially in the bond markets that has happened. If the author and most posters here had really gone through the cc-transcript you would have noticed that the NAV-calculation is highly complicated and that they have to go by bond-yield-valuation models for most part. Now, when even AAA-rated paper gets no bids and even European government paper (greece, Italy, Spain) widens to the levels of corporate spreads versus German and US treasury debt, then you have an event that creates enormous pain and stress in a very short span of time. To blame mgmt for not having foreseen this kind of hurricane in the bond markets is dishonest or plain silly - choose whatever you like.
as for me, I have rarely seen a financial company's mgmt being that honest. straightforward, quick and shareholder oriented as Wilkus and his team. Sorry, but if you folks like to panic in the face of the stocks staggering collapse, feel free to do so, but don't blame management for your sudden change of perception.
Acas has its risks, no doubt but at current prices is an absolute steal. heck, you can even sell some atm or otm naked puts and get the stock essentially for about $3.
that they slashed the dividend, btw, is absolutely prudent-. and they didn't slash it because they didn't have the cash or the earnings - they absolutely have, but to preserve their capital and keep in compliance with their loan covenants. I would not be suprised to read an amendment these days that brings down the required NAV by a billion or a half. then all of a sudden people will realize that they simply panicked and the stock will explode back up towards $10-$12.