Short Report Alleges GOF's Dividend Model Is Unsustainable, Stock Hits 52-Week Low
GOF is trading near its 52-week low of $9.25 (0.6% above the low) on elevated volume (6.8× avg).
Summary
The Bear Cave published a short report alleging GOF's dividend is unsustainable. Over eight years, the fund paid out $1.74B while earning only $564M, funding the gap through share issuance at a premium to NAV. That premium has now compressed toward a discount, restricting new share sales. The report also flags 15.5% of assets in Level 3 illiquid securities and claims recurring income supports only a 6-cent monthly payout versus the current 18.21 cents. Shares fell 5.65% to $9.52, a new 52-week low. A dividend cut or asset sales may be forced if the model breaks down.
At the time of this announcement, GOF was trading at $9.31 on NYSE in the Finance sector, with a market capitalization of approximately $2.1B. The 52-week trading range was $9.25 to $15.16. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Benzinga.