PSEC

Prospect Capital ($PSEC) CEO Signals Strong Confidence With $75 Million Stock Purchase Over Nine Months

03/24/2025 20:05

Prospect Capital ($PSEC) CEO John Barry has been demonstrating remarkable confidence in his company by purchasing over $75 million worth of company stock over the past nine months. This concentrated insider buying is particularly noteworthy as it comes during a period when the stock has been under significant pressure. According to SEC Form 4 filings from late August 2024 through March 2025, Barry has acquired more than 15 million shares. What's particularly striking is the timing of his purchases, which have been concentrated during periods of significant stock price declines in late August 2024, mid-November 2024, and recently in March 2025. From August 30 to September 10, 2024, Barry purchased approximately 5.5 million shares at an average price of $5.24, representing a total investment of about $29 million. This came immediately after $PSEC's stock price had plummeted from $5.0 to $4.4 in early August. Then, from November 14 to 22, he acquired another roughly 7 million shares at an average of $4.57, investing an additional $32 million. This period also followed a sharp decline in the stock price from $5.0 to $4.1. This buying momentum has continued into recent months. On December 24, 2024, Barry purchased 2 million shares ($8.58 million), and in March 2025, he added approximately 2.77 million more shares. The recent purchases were made at an average price of around $4.30, representing the lowest purchase price point over the nine-month period. Barry's actions are reinforced by the consistent buying of COO M. Grier Eliasek. Eliasek demonstrated a pattern of purchasing 5,000 shares almost daily from late August through mid-September 2024, and maintained similar buying activity from mid-November to early December. Notably, on November 27 and 29, 2024, he made substantial purchases of 210,000 shares each, supporting Barry's buying pattern. CFO Kristin Lea Van Dask and directors Eugene S. Stark and William Gremp have also participated in this buying trend. Van Dask purchased 3,330 shares in June 2024 and 15,200 shares in November, while Gremp acquired a total of 20,000 shares in March 2025. Prospect Capital, established in 1988 and publicly listed in July 2004, is a Business Development Company (BDC) that primarily lends to and invests in middle-market private companies. The company has been distributing monthly dividends since the second quarter of 2010, making it popular among investors seeking steady income. On October 7, 2024, the company announced an extension and increase of its revolving credit facility to over $2.1 billion. This facility has a five-year term, maturing on June 28, 2029, with the revolving period extending through June 28, 2028. It also includes an accordion feature allowing commitments to increase to $2.25 billion. This move suggests the company is strengthening its liquidity position and preparing for expanded investment activities. Currently, $PSEC is trading at $4.22 (as of March 21, 2025), down approximately 23% year-to-date. The stock is trading below its 10-day moving average of $4.27, 50-day moving average of $4.32, 100-day moving average of $4.46, and 200-day moving average of $4.90, indicating an overall downward trend. It's worth noting that most of Barry's and other executives' purchases were made pursuant to Rule 10b5-1 trading plans, suggesting these are pre-planned, long-term buying strategies rather than opportunistic trades based on insider information. Additionally, the simultaneous buying by the CEO and COO (cluster buying) indicates a shared conviction in the company's value among the executive team. Financial sector analysts are taking note of these strong insider buying signals. They suggest that with the transition to a lower interest rate environment, Business Development Companies may see improved profitability, making the executives' actions particularly significant. Investors should also monitor $PSEC's ability to maintain its monthly dividend payments, the quality of its asset portfolio, and how broader market environment changes might affect the company. Despite the recent stock price decline, the strong buying commitment from the management team may be viewed as an important indicator that insiders believe the intrinsic value of the business exceeds its current market valuation.

You can receive notifications when news is published.