Prospect Capital Shares: Deep Value Opportunity or Value Trap?

Trading at a staggering 60% discount to its stated net asset value, Prospect Capital presents investors with a compelling yet controversial proposition. Is this a rare bargain or a warning sign of deeper troubles? The market’s severe punishment of this business development company stands in stark contrast to a significant vote of confidence from its own chief executive, creating a complex investment puzzle.

The core of the investment debate centers on an extraordinary valuation discrepancy. Prospect Capital shares currently trade around €2.25, while the company reports a net asset value of $6.56 per share. This massive 60%-plus discount defies conventional market behavior for business development companies, which typically trade near their NAV. Such an extreme deviation suggests either market overreaction or fundamental concerns... Read more...