I looked back at their projections for the company before the spinoff of NRZ. They were projecting earnings of 50 cents a share. Right now, even if you give them the 4 cents they say they would earn if they were fully invested with their cash they would be short by 2 cents. They are underperforming even their own conservative projections.
I think it definitely has to do with the idea of the Media acquisitions. They are unable to complete the senior center due diligence. All of their human assets are involved in the Media bankruptcy negotiations etc.
I think those interested in NCT that know the company would buy NRZ instead, at least in the next few days. I expect continued weakness and a drift towards $5.20. If they bring the media company our of bankruptcy as they projected there may be a pop then.... but that depends on a court ruling. That could take much longer than expected... courts are notoriously fickle. If the ruling is delayed for any reason the stock could really suffer. $4.80 perhaps.
I would wait at least a few days. At $4.80, even I might be interested again. I wouldn't expect much downside from there.
jabarnes, I don't think Wes or Ken ever promised that Newcastle's EPS would hit that 50 cents annual EPS projection by September 30, 2013 date certain. And, Wes indicated on the cc that Newcastle's assisted living properties are now delivering a 20%+ ROI, which is ahead of projections. Wes Edens and Randall Nardone are the two largest shareholders of Newcastle according to Yahoo Finance, which shows they have plenty of "skin in the game". Newcastle is undeniably a "work in progress", and in my opinion, it's way too soon to criticize management for failing to meet over-rosy projections.
Over the past two years, Newcastle management has tended to consistently meet or beat their financial projections, and I'd be surprised if the future turns out to be any different than the past.
I would guess that it's a subtraction. Questions to ponder is management getting diverted with their enthusiasm for the media business which is wholly outside their expertise. What happened to their senior housing focus.
Gate House has been around for years so media is not outside of their expertise. Management has said that they are going to be working on NCT legacy portfolio and Senior Housing. The debt to equity transaction is their work on the legacy portfolio turning an unperforming debt into equity. Acquisitions of senior care centers have been on going in the last quarter maybe not to the extent as previously predicted indicated by their lack of meeting projections. They have stated the the media spin off will occur shortly after year end. That spin off is of "value" and its going to be better than a normal dividend also making additional distributions. So they miss on their projections because their energies were focused on something else which had a window of opportunity, who cares! I don't.