Remember when the 8K stated they had issues with Q2 (i.e. pre-warned)? That was a signal.
Yesterday's amended 10Q twice mentioned they may have to de-reit.
What does this mean?
1) Each of 1st 2 qtrs they had earnings available to common of .07; money was put away for preferred. Sorry folks, but this could mean that the a) pfd. continues to accrue, b) common won't get divvy at year end. Bad news?
2) BLK and Barclays combo will not have to sell their shares; in fact, they can now BUY shares to defend the stock price.
Net-net, I see this as positive. Common didn't want shares of stock and a tax burden for them. Preferred can wait for divvy for 1 yr.
HUGE that BLK can start lapping up shares or outright buy AHR.
You'll see... de-reit coming... it's a good thing.
If they stop being a reit the price is going to fall through the floor. It will be an admission they don't have enough cash for any kind of dividend. My pfds will get crushed badly as the divy is the only reason to own them.
why? google isn't a reit. I think its pps is pretty solid.
Ask yourself, why are reit prices traditionaly (relatively) low when they pay such a large dividend? That is, why do they have such high yields?
major shareholders just modified as part of a restructuring of debt deal...On January 1, 2009, Bank of America Corporation (“Bank of America Corp.”) acquired Merrill Lynch. In connection with this transaction, BlackRock entered into exchange agreements with each of Merrill Lynch and PNC pursuant to which each agreed to exchange a portion of the BlackRock voting common stock they held for non-voting preferred stock. On June 30, 2009, Bank of America/Merrill Lynch owned approximately 4.6% of BlackRock’s voting common stock and 46.3% of BlackRock’s capital stock on a fully diluted basis, and PNC owned approximately 43.9% of BlackRock’s voting common stock and 30.8% of BlackRock’s capital stock on a fully diluted basis
You might be right, but why would Blackrock, Merrill Lynch, and Barclays be accumulating shares. These are all related parties and they are lining up to buy more.
In the long run, the share price will benefit from restructuring and the buyout.
In the short run, a de-reit move may already be priced in. The stock is trading for 1/10th Book Value.
If you run a stock screen in Financials/Reits there are not many stocks cheaper.
Is that the only difference between the two filings?
I may have to print them out and read them.
I have about $10,000 worth of investments that are going to get called on Friday. I wonder how long the price will stay depressed like this.
If they announce a de-reit, would that send shares lower?
De-reit opens the door for BLK to buy as much as they want - including the entire company.
That's what I see happening. If they own > 50%, they can treat it as a subsidiary and account for AHR's accumulated deficit as a tax-loss.
This makes it valuable yo them... $2 a share or more, and I believe they become buyers in a big way.
We shall see. I would be very nervous as a short.