As much as I understand from conversation of you two, one major difference is that Swanger thinks ADK will go (i.e. beome) a REIT while homebuilder believes in ParkCity/Fox that ADK should sell its real estate to REIT for $9/share. I got a few questions to ask. Maybe kind of naive questions, sorry for my ignorance.
1, Swanger once mentioned what ADK has for sale to REIT is too small. What real estate are ParkCity/Fox talking about? Why is it too small? Is $9/share a fair estimate?
2, Why ADK wants to become a REIT? If it does so, how much it would be a fair price (per share)?
3, If ADK sells its real estate to REIT, doesn't it need rent it back for its business running?
And an off-topic but ADK related question. What exactly are the reason ADK misstated in its previous SEC filing? My impression is that the mistake is quite trivial. However why it took them so long to file 2012 Q10? Did they mentioned it why?
Sorry, so many questions. Personally, I'd like to see Park City get a seat in BOD. Based on my previous observation on other stocks, this kind of proposal or actual execution of such proposal usually brings up stock pps.
1, Nonsense. Not too small by any means. The real estate consists of all the owned facilities ADK has. Keep in mind, ADK operates the opposite of every other company in its sector which is why Wall Street shuns them. Their ratio of owned to leased facilities is the opposite of the norm, hence their debt and why WS has no interest. The difference between the $9 and the roughly $4 is for some reason Sabra and Park are using vastly different number of owned beds, 3,500 vs 2,654..
2. ADK does not want to become a REIT. Brogdon is already setting up a REIT at his other public company.
3. Yes, it would be a sale/leaseback which actually makes little sense from a business point of view and would not be done if ADK was a private company but has to be done to appease WS. So ADK would continue to run the facilities it sells, for a short time until it sold the company.
The reason for the mistatements was that ADK was using a two bit small time accounting form that was light years over its head in terms of complexity of transactions. Should have moved to a Big 4 firm a long time ago. It's a big nothing in the grand scheme of things