understand why the dividend is listed at over
$2.00 a share, a yield of aprox. 40%. Is the
co.required to pay this because it is a REIT or will this
likely be lowered?
PS - I have no knowledge of REITS
and would appreciate any info. and if you'r wondering
why I'm here, simply because I am a value investor
and REITS in general are looking very undervalued!
and RP, if it's legal for Doc to get a "going
away present" in the negotiations, how can he
represent the interests of the shareholders? Sorry, but
that doesn't seem kosher, I think he has a fiduciary
duty. Oy vey!
But I've seen the kind of scenario RP outlines at
work before -- a "takeunder." It happened with two
stocks I owned -- Telecopy, which I had bought at 8 and
then averaged down at 4, was bought out by Xerox at 6.
I broke even, but that's now why I invest. Then
there was Convex Computer which I bought at about 7,
and soon after was taken out by Hewlett Packard at 5
or so. And to think, CCA used to be in the S&P
I may sell 1/3 of my position from my taxable
accounts - just don't know yet. My biggest concern is that
if the Market doesn't do well next year and PZN does
poorly and is bought out, forcing me to take a loss,
then next year I might not have enough sufficient
capital gains to write-off against.
getting carried away and way off track, but I can see a
scenario where the SI comes in at around $6 with a 40%+
position, drops pursuit of REIT, investors just aren't
interested, soft overall market, and the SI takes it private
at $2 above the market. Then we're all forced to
take all of our PZN losses that year.
but I'd welcome anyone telling me why it's unlikely.
Don't know how long you've been following this
board...I have been calling for PZN to drop pursuit of REIT
status since Q1 conference call disaster when they
revealed the new OPCO fees. Long story, but the net-net is
they generate insufficent cash flow to come pay out
95% of taxable income. I had given up on that
prospect but with the supposed upcoming participation by
the new SI I'm thinking PZN will pay the nominal
remaining special dividend but then take actions (including
shareholder vote) to drop pursuit of REIT status. I don't
think any SI would want a REIT; this one anyway. They
want the company put back together with OPCO, Doc and
jr. gone and since they'll likely own 30-45% they'll
get what they want.
Hopefully, buying in for
~$6 a share they can make a go of it. If they aren't
satisfied with the results, I predict they'll buy us out,
perhaps bringing a few of the Institutional
I can't address all of your questions. Everything I
know about REITS I've learned (painfully) with PZN
from some good posters on this board. However, under
the scenario outlined above, they wouldn't be buying
any of the Preferred and they aren't a REIT anyway. I
believe they can buy the common and just bring the
Preferred along for the ride.
Don't know about the 6
qtrs/BOD issue or change in ownership trigger issue. Those
sound like good protection.
the wall street journal has a section on stocks
and there short position fron nov. 15 to dec 15....
pzn went from appr. 400k shares short in nov. to over
4mm shares short in dec...once something positive
comes out on pzn and the short start covering, then we
could have a nice run...a announcement will come this
week and let's hope that it's POSITIVE..
There are some interesting twists to preferred
ownership that might prevent the scenario you
described.First no one can own more than 9.8% of the preferred
and PZN stay a REIT (REIT rules). Preferred owners
have the right to control whether additional preferred
can be issued or authorized and whether new
securities can be created which have distribution rights
equal to or greater than the existing
Also if dividends remain unpaid for more than 6 qtrs,
the preferred holders have the right to elect two
additional members to the BOD.
If somebody tries to
take this private aren't they obligated to make a
reasonable offer for the common and preferred? In fact, I
think that a change in ownership would trigger the
liquidating distribution clause whereby preferred(full $25) +
accrued dividends would have to be paid.
case, they would have to go to a C corp if they took it
private and chose not to pay the preferred dividends. To
remain a REIT they would have to pay income dividends to
the common and those can't be paid until the
preferred is paid.
Thought about that strategy and considered buying
the Preferred when it was under $13. My concern with
the Preferred is if this thing plays out whereby our
SI takes the company private, they may subsequently
stop the payments on the Preferred. There is
precedence for this, as the new owners focus on paying down
the bond holders and bankers there is no incentive
for them to remain current on the Preferred. Yes,
it's cumulative but years with no dividend stream
would be painful. It's happenned before.
A $5 3/4 stock is tempting when you know it has
sold at $40 in the past, and (supposedly) "has to" pay
out a juicy dividend. But the company has been short
on information, people have been kept in the dark,
and the only assurance people get is that the company
"intends" to qualify as a reit, and "intends" to pay the
dividend. But we are getting stories and opinion out of
analysts and "sources close to the company" that
Blackstone may put in $300 mil, and (I believe) Litt said it
may be as much as $500 mil. What is the new buyer
getting for this money? Doc steps down, and that is said
to be bullish. Currently, there are 118 mil shares
outstanding, and Blackstone is paying how much a share? Or
maybe high yield bonds with warrants? Or a convertible
preferred that leaves present common shareholders out in
the cold? Market cap of $680 mil and Blackstone is
getting how much of the company for $300 mil? $500 mil?
I'm tempted, but too many unknowns for me. Yes, I
know, by the time terms are known, the stock may have
moved higher, but I'd rather miss the first 3 points
than buy blindly on hope and faith in Doc -- he's the
guy who led us into this mess. It has ben a painful
trip, I hope you all recover your investment capital,
but I want to see how much Doc gave away in this
deal, and what he and his associates are getting out of
it. And how much of his personal fortune is tied up
in PZN afterwards, and on what terms?