John F. Barry, the Chief Executive Officer of Prospect Capital Corp (NASDAQ:PSEC), has acquired 205,900 shares of the company's common stock. The purchase, made on November 15, 2024, was executed at a price of $4.40 per share, totaling $905,960. Following this transaction, Barry's direct ownership in Prospect Capital has increased to 72,612,839.113 shares. Additionally, Barry indirectly holds 324,288.654 shares through his spouse. This acquisition underscores Barry's significant investment in the company he leads.
In other recent news, Prospect Capital Corporation has expanded its preferred stock offering to $2.25 billion due to strong market demand. This strategic move involves reclassifying 20 million shares from common to preferred stock. Despite this, Wells Fargo (NYSE:WFC) has downgraded its price target for Prospect Capital from $5.00 to $4.50, citing a lower Secured Overnight Financing Rate (SOFR) curve and an anticipated increase in shares due to the conversion of preferred stocks.
Moreover, Prospect Capital reported robust earnings for the fourth quarter of fiscal year 2024, with a net investment income of $102.9 million and a net asset value of $3.71 billion. The company emphasized its strong balance sheet, diversified funding sources, and significant liquidity, along with a strategic shift towards first lien debt.
In addition to these recent developments, Prospect Capital clarified that there are no ongoing discussions about forced conversions of preferred stock by the company's board. These recent developments suggest that Prospect Capital is making strategic decisions to maintain shareholder distributions and strengthen its investment portfolio.
InvestingPro Insights
John F. Barry's recent purchase of Prospect Capital Corp (NASDAQ:PSEC) shares aligns with the company's strong dividend policy, as highlighted by InvestingPro data. PSEC boasts a substantial dividend yield of 11.97%, with the last ex-dividend date on October 29, 2024. This high yield is supported by an InvestingPro Tip noting that PSEC "has maintained dividend payments for 21 consecutive years," demonstrating a commitment to shareholder returns that Barry seems to endorse through his increased stake.
However, investors should be aware of some challenges facing the company. InvestingPro data shows that PSEC's revenue for the last twelve months as of Q1 2025 was $821.73 million, representing a 7.23% decline. This aligns with another InvestingPro Tip indicating that the "stock has fared poorly over the last month," with a one-month price total return of -13.94%.
Despite these headwinds, Barry's significant purchase may signal confidence in the company's long-term prospects. For a more comprehensive analysis, InvestingPro offers additional tips and insights, with 6 more tips available for PSEC on the platform.
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