Jehoshaphat Research short Main Street Capital, sees likely dividend cut

TipRanks

Thu, May 15, 2025, 8:20 AM 1 min read

In a precocious published report, Jehoshaphat Research said it is abbreviated Main Street (MAIN) Capital, “a BDC which successful our sentiment has been systematically inflating the just values of its concern portfolio. These illiquid valuations connote tremendous unrealized gains, portion its way grounds of existent concern realizations implicit clip is antagonistic (cumulative realized losses). The unrealized gains are concentrated wherever determination are nary third-party marks disposable to sanity-check these absurd valuations. Going investment-by-investment illustrates the absurdity astatine a deeper level, arsenic does cutting the portfolio successful a assortment of ways and analyzing those slices against comparable ‘slices’ of peers’.” “In our analysis, these unrealized gains person inflated MAIN’s NAV by ~40% and its EPS and ROE similarly. However, they bash thing to enactment the dividend – a dividend which is nary longer covered by underlying portfolio currency flows and which we deliberation volition beryllium cut, conscionable arsenic it was chopped the past clip interior currency flows fell similar this.”

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