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Virtus Diversified Income & Convertible Fund V.ACV.P


Primary Symbol: ACV

Virtus Diversified Income & Convertible Fund (the Fund) is a diversified, closed-end management investment company. The Fund's investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of convertible securities, income-producing equity securities and income-producing debt and other instruments of varying maturities, of which at least 50% of total managed assets are invested in convertibles. The Fund has the latitude to write covered call options on the stocks held in the equity portion. The Fund's investment advisor is Virtus Investment Advisers, Inc., and its investment subadvisor is Voya Investment Management Co. LLC.


NYSE:ACV - Post by User

Comment by happyhuntingon Nov 21, 2019 12:25pm
106 Views
Post# 30378775

RE:RE:writing on the walls

RE:RE:writing on the wallsYou are completely ignoring the elephant in the room - Greenspace's debt burden!

With deferred consideration included - $8m of which is payable next month - they have over $20m in debt and growing.  Any buyer takes that debt on. Why would you do that in a business that cotinues to haemorrhage cash?  The answer is only if there is an opportunity to quickly grow the brands, but the big ones are now looking close to maturity in the Canadian market.

Last quarter net sales were $11.3m.  That gives an annual run rate of $45m. 

They are desperate with little negotiating power and time running out, so a sale price in the 0.5x-0.75x net sales range is realistic.  i.e. $22.5m - $34m.  Take off $20m of debt and that leaves $2.5m - $14m for equity holders: $0.03 - $0.175 per share. 

If they don't sell something quick, the debt holders take over and it could go to zero.

Given that risk to the downside, I would steer clear.  Anyone buying this thinking that they are going to get $0.35 per share is living in a fantasy land.

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