American Capital Agency's Secondary (And High Yield) Provide Opportunity

After going ex-dividend Monday, shares of American Capital Agency Corp (AGNC) were falling further after hours on news the company will be offering 27,000,000 shares of stock. Underwriters will have the possibility to sell an additional 4,050,000 shares to cover any overallotments. Investors who have held AGNC for a few quarters should have seen this coming since it is the 4th large equity offering since September. However, looking at the market response to previous offerings, investors might want to participate in this secondary. Here's a quick look at the last three offerings and the market reaction: On September 28, 2010, AGNC priced a public offering of 11.5 million shares of stock at $26, raising $285 million. Shares closed at $26.89 that day, and were approaching $29 one month later. On December 9, 2010, AGNC raised $219 million by selling 8 million shares. Shares closed at $28.64 that day, and closed... Read more