NEW YORK (TheStreet) -- Shares of Annaly Capital Management (NLY) slipped in extended trading on Monday after the New York City-based real estate investment trust unveiled plans for a dilutive public offering of 75 million common shares.
The company intends to use the money it raises to purchase mortgage-backed securities for its investment portfolio and for general corporate purposes. As of Sept. 30, Annaly Capital had roughly 622 million outstanding shares, so the offering represents an increase of 12.5%. In addition, underwriters will be able to sell an additional 11.25 million shares to cover over-allotments.
The stock was last quoted at $17.52, down 2%, on volume of almost 750,000, according to Nasdaq.com. In 2010, Annaly shares rose a little less than 3%. Real estate investment trust pay out substantially all of their earnings in dividends, however, which typically keeps a lid on per share performance. For fiscal 2010, the company's declared dividends totaled $2.65 with the final quarterly dividend of the year of 64 cents slated to be paid on Jan. 27 to shareholders of record on Dec. 28.
Wall Street is pretty bullish as 12 of the 16 analysts covering the stock are at either strong buy (5) or buy (7) with the remainder at hold. The analysts' median 12-month price target sits at $18.75.Annaly said Credit Suisse is acting as the lead book-running manager for the offering, while Barclays Capital, J.P. Morgan Securities, and RCap Securities are sharing the book-running manager duties.
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