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CapitalSource Inc. Message Board

  • palovesr palovesr Jul 15, 2008 11:01 PM Flag

    IPO Shares

    Do current shareholders of CSE get
    any shares of the IPO based on CSE
    shares held?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Sometimes REITs will have to wait a while until prices become realistic before they acquire anything. Some REITs will pay anything for the sake of growth.

    • It really doesn't matter who was president as it was mostly congresses doing in their attempt to balance the budget. They reduced lengths of stay after a health crisis and the amount's of Reinbursements to skilled nursing facilities. Since the operators (the people who employ the medical professionals and run the facilities) were tied to long term leases the only way they could cut costs was to reduce staff and utilize lessor qualified personnel. Many filed for bankruptcy and had their rent (leases) reduced or just went out of business. This left the REIT holding the mortgage in a fix because they had the interest on the loans they carried to pay. A lot of shuffling around to find new operators buyers for properties. OHI went for about two or three years where they suppended the dividend on both their common and three issues of preferred. There common was down to around a dollar or two. They have in the last 8 or 9 years paid up all the accrued preferred dividends and called two issues and have been paying an ever increasing dividend on the C shares.

      There is one law congress has never been able to get a handle on and that is the law of unintended consquencies.

    • "Congress almost destroyed the Healthcare system in the early 90's by cutting back on Medicare payments bankrupting a large number of REIT's and nearly destroying the industry"

      If that is the case then it seems best to sell some of the hcare reit asset to diversify the risk - which cse is doing with the spinoff.

      Also did that near destruction of the healthcare system come under democrat administration of Clinton?? If yes, that is even more of a reason to sell of some of the hcare reit in the IPO with the dems in the lead for the white house...history has a way of repeating itself.

      I don't see how there is a dilution either too...seems they are likely to get a higher PE multiple for the hcare reit than if cse keeps the asset in the current undervalued diverse cse re portfolio.

      gl

    • REITs that fail to grow don't die by going away they get gobbled up. Lack of growth is an indicator that management is mostly satisfied with their salary, bonus an benifet package and have instilled a do-nothing board that is also satisfied and will proceed to suck the business dry. This is more common in Small Hotel REITs. If your not making meaningful acreative acquisitions every year or so it would to me be a signal to look for an exit point. Don't mean to promote by OHI (which I have follow for many years since they rebuilt themselves after the debacle of the 90's) is what I see is a template for how a reit(healthcare) should be run.

    • I agree with everything you say except "Reits must grow or die". I think they can stay the same for quite a while without much consequence. Normally, they don't grow too fast.

    • no. unless the deal's a dog, in which case you can Buy all you want:)

      mojo

      long

      • 1 Reply to mojoinjun
      • Since current shareholders own the reit too, it is a double screw job. The company gets the money to lend, or whatever they chose while the shareholders get nothing. My bad they do continue to own whatever ownership the company keeps. I suppose this is unlocking the reit value. It remains to be seen if reit's have the value purported. Not exactly a great IPO time as stated before. I think they should wait.... till conditions improve. Do we get to vote?

 
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