Augustus

Deep Value in American Capital Strategies

A Reverse Split will d nothing to alter the problem of Share Price << Book Value. Book value will increase, probably faster than share price, if this one responds in price as most stocks do when they have the reverse split. the only purpose is to attempt to get the price high enough to maintain a listing. With shares priced below $5, there are quite a few funds that cannot buy it.

If this company is required to do an equity raise now the only outcome is massive dillution, very massive dillution. And it would also indicate that the MtM writedowns were not just "paper losses" but are due to actual imparements in the value of the assets. Otherwise they could just collect the debt and pay down the bank lines. Reducing that debt outstanding would not be a profit or loss generator so the cash should be available for the deleveraging. that would ultimately be more profitable for the existing shareholders than selling new shares at $2 or so.

S&P 500 Buy and Sell Ratings

Regions Financial is the Bank that Michael Shedlock recommended. It is the only buy recommendation that I know he has made since becomming a registered advisor. So much for that operation. It must be about as great as his economic nonsense.