American Capital Shareholders Terrified of Reverse Stock Split And/Or Bankruptcy
Bankruptcy has been on the table for American Capital, the troubled BDC, since it went into default in March. Another possible shareholder nightmare has been a reverse stock split. The firm’s CEO Malon Wilkus today tried to quell investor fears about those possibilities on its Q1 earnings call, but judging by the company’s stock performance (it’s down 34.9% as I’m writing this), his best efforts weren’t good enough. In tandem with the company’s dismal earnings news, the firm said it hired Miller Buckfire to advise its restructuring efforts and Citigroup to help it sell European Capital, the Europe arm of its business that American Capital absorbed last year. The European Capital sale may be in pieces if it can garner the best price, Wilkus said.
