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Medley Capital: Stock Watch

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NEWS

On June 5, 2018 Medley Capital (MCC) reached a new intra-day low of $3.42.

As the chart below shows, MCC has dropped (44%) in the past 12 months.

ANALYSIS

The stock is trading at a 51% discount to book value.

The current yield is 11.6% on the recently reduced dividend.

The only news or SEC filing in the last month that might be moving the price was the June 5 2018  announcement that the BDC intends to repurchase up to $20mn of its Baby Bonds.

See the BDC Reporter’s article on the subject.


VIEWS

We continue to believe that the BDC’s Investment Advisor Medley Management (MDLY)  will be compelled by this continuing decline in the stock price to take some sort of action before long.

This might involve selling the Investment Advisory contract to a third party; or merging the public BDC with MDLY’s private fund or selling off a portion of the portfolio.

(We doubt that MDLY would liquidate MCC in the manner that Ares Management has chosen to do with American Capital Senior Floating). 

With every new All Time Low, the pressure for MDLY to “do something” about MCC increases.

 

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