This stock is overvalued at $5. Otherwise, why
would mgmt sell it to the SI group for $2.21. In
effect, that is what they are doing. The SI group gets a
12% cash dividend for a minimum of 5.5 yrs. That is
$4.29 (5.5 * $0.78.) $6.50 - $4.29 equals $2.21. The
only condition is that they hold the stock for 5.5
yrs. (Of course, it's even less than $2.21 with all
the other perks that the SI group gets.)
This
makes me feel ripped off, and I bought the stock for $4
9/16 per share. I say, forget the S.I. group. Keep the
REIT, sell more common stock for $2.21 (actually maybe
someone else would even give us more), and skip the after
tax preferred dividend. (That might leave something
for us common shareholders.)
I just wonder
what Dreman plans to do.