Thu, Aug 21, 2014, 12:59 PM EDT - U.S. Markets close in 3 hrs 1 mins

Recent

% | $
Quotes you view appear here for quick access.

RAIT Financial Trust Message Board

  • muckahoy88 muckahoy88 Oct 6, 2013 11:43 AM Flag

    DILUTION VS. STOCK PRICE

    DF You STILL didn't respond to boxy. He says when private stock sale caused a 25% price drop
    when announced. That actually happened. Is that stockholders reward for loyalty? You are
    wrong suggesting that's okay, because in the long run it is good for stockholders. Maybe so
    but the iIMMEDIATE effect was huge loss for shareholders That is NOT a good thing.
    Furthermore it IS UNNECESSAR TO SEE SHAREHOLDERS SUFFER while waitig for stock
    to comeback to breakeven. MANY cos. offer subcription rights or warrants or whatever permitting
    stockholder participation AND get .MORE money from HIGHERr stock price AND no price crash.
    Quit your temporizing & dumb support of rotten mgts decision.All these millionaire bosses do is
    reward their friends at shareholder expense This questionable action borders on illegality IMHO'.
    Only a narcistic personality endeavors to [unwittigly] foist HIS half basked opinions & prognosis on
    others. You MAY NOT REALIZE it but you come across as some divine oracle. I can't wait to read your
    self serving response. Clever you may be but DIVINE you are not. Just cool it bud.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Finally, given the subject line of this thread, I'm going to repeat my most recent statement about "dilution and the stock price.

      RAS has leveraged it's secondaries into a substantial increase in cash earnings.

      The world waits for no man. Business opportunities were opening when RAS did the secondaries, and management at least had the good sense to keep the size of the secondaries down compared with competitors like NRF, NCT, and RSO. You can't always wait for the market to price your stock properly before you raise money. You can try to minimize the damage, as RAS did with its Preferred D offering. NRF and RSO all raised a lot more money in support of securitizations that weren't a whole lot larger.

    • You say "Quit your temporizing & dumb support of rotten mgts decision.All these millionaire bosses do is
      reward their friends at shareholder expense This questionable action borders on illegality IMHO'.
      Only a narcistic personality endeavors to [unwittigly] foist HIS half basked opinions & prognosis on
      others. You MAY NOT REALIZE it but you come across as some divine oracle. I can't wait to read your
      self serving response. Clever you may be but DIVINE you are not. Just cool it bud."

      That's just a straight up personal attack, and you should cool it. Attacking others personally is basically an "I have no ammunition but I want to kill you" statement. If you have no ammunition, perhaps its because I'm right.

      I would point out that I have made many specific responses for which there is copious supporting evidence in the pendantic putz thread. Box has not challenged much of it, and he has, his challenges have been easy to diffuse with evidence.

      Here's reality. RAS is coming back from a near death experience. It was never as close to death as some people think, mostly because it always generated cash in excess of its cash expenses (every single quarter), but there were certainly times when a single major cash setback could have, if it was big enough to overwhelm the companies shrinking moat, put the company into bankruptcy. There has always been risk in investing in RAS. I have never denied that risk. I have simply tried to put the risk in perspective relative to the opportunity, which has always been much larger than the risk in my estimation. I have persistently indicated that the opportunity was long term and that economic forces could slow it. That is exactly what has happened. It remains that RAS has been out of the woods for over two and a half years, that its price, on average, has been trending higher, and that its dividend has returned and is much higher.

      Many people say that RAS is paying them to wait for higher prices. I agree with that.

    • You proceed to say that "MANY cos. offer subcription rights or warrants or whatever permitting
      stockholder participation AND get .MORE money from HIGHERr stock price AND no price crash."

      RAS actually does that. It's called a drip program, and a lot of stockholders participate in it both for the purposes of dividend reinvestment and commission free investment in the company. Actually, I participated in dividend reinvestment programs for most of twenty years when I was a young investor. Nothing else around allows you to buy three shares at a time without commissions.

      That's not a complete replacement for the things you suggest, but I don't see ANY REIT that has offered that kind of offering over the last few years, and for the simple reason that ANY announcement of a stock sale, with or without "warrants or whatever", brings a rush of retail and hedge fund shorts running based on the expectation that they will able to push the price down. And they run for good reason. They are usually right. Beyond the always available option of buying DRIP shares, this statement is pretty much pure fantasy.

    • As was the case with the opening statement of box's "pedantic putz", your post is kind of scatterred. I've repled to the "private stock sale", but there's more.

      You say "You are wrong suggesting that's okay, because in the long run it is good for stockholders. Maybe so
      but the iIMMEDIATE effect was huge loss for shareholders That is NOT a good thing.
      Furthermore it IS UNNECESSAR TO SEE SHAREHOLDERS SUFFER while waitig for stock
      to comeback to breakeven."

      There are certainly times when RAS stock price has dropped in response to a public offering. The Preferred D wasn't one of those times, but drops like that are pretty routine for secondary offerings. Many traders try to sell short in anticipation of secondary offerings on the presumption that they will be able to replace the shares from less expensive secondary offering shares. That's actually illegal, and the SEC levied some big fines on companies that were caught doing it recently, but it can be hard for the SEC to detect, especially for retail investors that play on a small scale across multiple accounts.

      Longs like me often buy in the wake of secondary offering price drops.

      It doesn't always happen. RAS went up after its most recent secondary (mostly because it sold out immediately)

      That said, and I want to make this as clear as I possibly can: no company can control its stock price, especially in the short term. It can only decide to take advantage of business opportunities that would be good for shareholders over the long term or not. The long term value of the decision to do the Preferred D is pretty clear now. The long term value of all of RAS recent stocks sales is pretty clear now. I'm sorry if you are impatient about share price set backs that often have nothing to do with managements actions (the biggest reason the share price has been down since early May is worries interest rates that RAS' management has made moot with match funding, but it is your problem. Don't blame it on RAS.

    • box posted a long series of statements. As best I can tell they were all wrong. I tried to respond to all of them with the actual facts of what happened. If I missed one, my apologies, but his "pendantic putz" post was a disorganized jumble.

      That said what "private stock sale caused a 25% price drop when announced." I can only recall one "private stock sale" over the last six years. That was the October 1, 2012 announcement of the Preferred D sale to Almanac. Perhaps I've missed one. If so, please correct me by providing specific dates.

      As it happens, the Almanac sale did NOT lead to a 25% drop in the share price. Quite the contrary. The almanac sale was done at a premium to the price on the announce date. The close on October 1, 2012 was $5.26, but the warrants issues were for $6. There was no significant decline in the share price after that announcement. Indeed, by January 11 the price was above $6. It has stayed above $6 ever since.

      To me that looks like pretty good and creative deal making on the part of management. The biggest cost to shareholders is that it put a well qualified expert on real estate and closed end real estate funds on the board of directors (not much cost).

      Stockholders are NOT suffering as a result of that deal. The price is up (even now) 27%,, but has been up as much as 68%. Dividends are up 67% from the dividend that went ex-div 9 days after the Preferred D announcement, from 9 cents to 15 cents.

      But as I said, perhaps I'm missing something. Do be specific if you figure out what it is.

      • 1 Reply to davisfoulger
      • You sound like a broken record. By this time we all know co. came back from the dead.
        That's not the issue. Subscription offerings do not necessarily cause stock downdraft.
        As I said they mostly are positive. Last example NYNY. Check out the pricce action I have
        no desire to harm you The main point is pointing out your nefarious agenda & foisting it around
        I explained you might not realize it but you come across like G-d. Infallible! More descriptive :
        I watched wonderful true story of master WW2 spy Disko Popov who in Aug 1941 met with
        J.Hoover. He tried to warn the arrogant & obstinate Hoover of pending attack on Pearl Harbor..
        End of meeting Hoover says "you're trying to teach me my business?" Popov stood up &
        replied "I don't think anyone can teach you anything!" and stormed out. Mister this ain't school
        you're teaching! I'll not post here again. But IMHO here's D grade for your persoality.

 
RAS
8.0501+0.0401(+0.50%)12:58 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.