In addition to Associated’s attempts to account for any further weakness in their loan portfolio, they also plan to bolster capital through a $400 million secondary offering. An offering of this size will undoubtedly be highly dilutive to existing shareholders, as the current market value of the company is under $1.5 billion. Associated will also cut their dividend for the second time this year, this time it will be slashed 80% from 5 cents per quarter to just 1 cent.
Source: Before It’s News
ASBC is another secondary offering/recapitalization that I am keeping on my watchlist. I’ll wait to see where this huge $400 million offering is priced and I will then evaluate whether I want to add it to my portfolio.
Also, like I said on yesterday, I won’t be reading into the Alcoa earnings. On an anecdotal basis, it seems that AA disappoints on earnings more than any other Dow component in both bull and bear markets. I’m frankly more interested in the KBH earnings and forecast in the morning.