Prospect Capital Corporation's (NASDAQ:PSEC) shares are crashing. After losing more than 5 percent on Wednesday after releasing weaker-than-expected 3rd quarter earnings that missed analysts' earnings expectations by a wide margin, Prospect Capital's shares continued to drop on Thursday, losing another ~4 percent. What should investors do now?
A year ago, Prospect Capital was a bargain, and I aggressively pushed income investors to gobble up a couple of shares when they sold for a nearly ~50 percent discount to Net Asset Value. I then started to recommend selling Prospect Capital into the strength in the 1st quarter, largely because the BDC's Net Asset Value discount had disappeared, and because bullish sentiment in the high-yield sector was overheating.
