I was happy to see that the Oxford Lane Capital Corp. (NASDAQ:OXLC) shares that I bought via the recent rights offering were credited to my brokerage account today, thus ensuring that investors will indeed have them well before the record date (March 17) for the upcoming March dividend (regular dividend 60 cents, plus a 10 cent special).
The rights offering was so over-subscribed that the company decided to issue an extra 2.4 million shares. While I'm happy to see the additional interest in the stock by institutional investors and others, the overhang of the additional shares has brought the price down below the $17 rights exercise price. The 70 cent dividend, that we're now assured of receiving, helps to salve the wound a bit in terms of the dropping price, and we'll see whether the price drops all the way to $16.30 (i.e. $17 minus the amount of the dividend) after the ex-dividend date. Investors who had hoped to arbitrage the rights offering by buying at $17 and selling out post-dividend at a profit may be out of luck. What is less clear are the pluses and minuses of the rights offering and expanded investor base for long term holders.
Disclosure: I am long OXLC.