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Brookdale Senior Living Inc. Message Board

  • stantonpartners stantonpartners Mar 20, 2008 12:49 AM Flag

    dividend cut = managment sucks

    I have no position short or long but help me out ,is this the same co. that is majorly owned by FIG fortriss -the same guys that sold there ipo to stupid americans at a much higher price? why is it that their stock is burried and that all of their holdings have high yields that need to be cut? the stock buy back are we stupid enough to believe that they will actually exicute it.....seems like alot of hot air I will believe it when the really but the shares-- not bs about it seems like when there is smoke there could be fire.

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    • Wrong. IPO was $19, which is $15.25 after having paid dividends since 2005. that's a 19% annualized return even to this pitiful price. Now, there was a secondary in July '06 at $39.50, which is well under water. Selling high and buying low seems like the prudent thing to do. If you have followed the company over the past year, you would know why they are doing this--read the transcripts and presentations.

      By the way, $150mm will be about 6 million shares out of 100 million, of which Fortress owns 60 million and some other large longer-term firms own another 5 - 10 million. So, they are buying back up to 17%-20% of the shares that smaller holders own...that's pretty big.

      It may be a lot of hot air, and without growing cash flow it amounts to nothing really. However, if you can use cash and borrow mortgage debt at a blended cost of 3% - 5% and buyback stock with a high degree of confidence in a return of greater than 20%, it may be a hugely accretive move.

 
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