The news about the stock offering failure is not too surprising, though I like the reference to "due to market conditions" in the press release. Maybe the management team's stellar track record with JRT had something to do with it as well. Many investors are showing increased interest in the sector and some of them will find ways to invest via the public/private plan announced by Geithner this week-- but clearly they do not want to team with Robert, Weiss, et. al..
So what's next? I still believe there is value in this asset base and potential upside from buying back CDO bonds cheaply, finding a way to buy out the trust preferreds cheaply, and managing the large CMBS portfolio to have the losses come in way below the JRT projections in coming years (potentially huge upside embedded in the book writedowns not ACTUAL losses to date). It will be interesting to see if this management team, which has spent probably a month and a half preparing a prospectus and out on a road show NOT for the benefit of current shareholders, will get down in the trenches and grit it out to survive this market turmoil, work very hard to make it through just like Joe Robert has been telling us on recent conference calls. I'm not hopeful on that one.
If they need a few dollars to squeak by in the coming months, Mr. Robert should consider what Ivan Kaufman did at Arbor, lending the company $5MM bucks to survive. The loan was in a super senior first lien position and was paid off in short order by Arbor, but it helped them survive. I don't expect that of Robert (or anyone), but his name and reputation are on the door. What I do expect is that these folks try to do the right thing for loyal existing shareholders, no matter what steps that might entail. We'll see.