Alcentra Capital: Insider Sale & Stock Price Drop
On Tuesday November 14, 2017 Alcentra Capital (ABDC) filed a Form 4. Here are the details, brief analysis on who was involved and the implications for this much battered BDC stock.
On November 9 and 10th, ABDC Chairman and former CEO Paul Echausse sold 25,000 shares in total, at prices between $7.29 and $7.68.
The average price was $7.45 on the 9th and $7.32 on the 10th.
Mr Echausse had 68,946 shares before the sales began. At the close on the 10th, 43,946 shares remained.
Until April this year Mr Echausse was the CEO of ABDC, when he vacated the post for David Scopelliti.
He remains Chairman of the BDC, a Director and a member of the Investment Committee.
With ABDC reporting poor results in the IIIQ; reducing its dividend and with its stock price dropping by 50% since May 2017, the sale by a key insider was not encouraging for the BDC’s other shareholders.
At time of writing, ABDC’s stock has fallen to a new record low: $7.14.
We acquired a position in ABDC as part of our Special Situation strategy, prior to the IIQ 2017 earnings release, at $10.3 a share on the premise that the price had bottomed out.
At that point ABDC had dropped (30%) in price from its spring 52 Week High.
Subsequently the stock price has imploded further and we added a small amount to dollar cost average.
If ABDC drops even further, we may add to our position.
We note that even after an apparent sell-off on November 8, when 9x the normal volume of shares traded hands, the stock price has dropped another 5%.
The sale by the insider will not helped shareholder confidence and there may be further drops coming up.
We are Long ABDC’s Unsecured Notes, which we purchased many quarters ago.
We intend to maintain our position.Already a Member? Log In
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