Cornerstone Should Distribute Special Dividend for Unexercised Rights Value
Wednesday, September 1st, 2010Joe Eqcome submits:
Conclusion: Because Cornerstone Strategic Value Fund’s (CLM) current rights offering is non-transferable, the board of CLM should choose to distribute to those shareholders electing not to exercise their “rights” a special cash distribution equal to the estimated value of the “rights” in the open market.
Why? Those existing CLM shareholders not electing to exercise their rights are effectively transferring approximately $.27 per share of their value through dilution for each share they fail to exercise that is subscribed by another existing shareholder. If this were a transferable rights offering they’d be able to recoup such value.
