Yes, this looks like a VERY significant taxable event. The company in the past has consistently refused to provide ANY tax guidance. You wait until the end of Feb to find out what last year is all about, but then it is too late to do anything about it. That's why I did a Roth conversion in 2014. If my income is lower than planned, I let the conversion stand. If my income is too high, I recharacterize the roth conversion to a regular ira rollover. I created income which I can undo after the year is closed (until 10/15/15 for 2014 conversion).
We should all ping the company and especially the analysts to press for tax guidance this year. They may not have a precise number/percentage taxable, but they know the ballpark (plus or minus 15%) as I type. By mid November they will know plus or minus 5%. Why won't they share that with us?
Mine was the midpoint on between 200 and 400 million gain recognized on the distribution of nre stock on 400 million shares. Thus my number could be plus or minus 25 cents resulting in a range of 2.90 to 3.40. I hope the low end or lower is the actual.
Actually, what they are hoping for is much higher multiples post spin. Using the numbers from the nre spin presentation slides, nrf has 1.76 of cad pre spin. At 12.50, price is 7.10 times cad, a worse than horrible multiple.
1.76 becomes 1.50 for nrf and 20 cents for nre post spin. 6 cents is lost to the cost of another public company.
Suppose 1.50 post spin trades at 10 times (a dismal multiple for an equity reit). That's 15.00 for ex-nre NRF.
They hope nre trades at 25 times 20 cents, which results in a 5.00 price.
Thus, 12.50 becomes 20.00 (15 + 5), they and I hope.
Ah, now I got it thanks to a private email tip. It's my first grade math teacher's fault because she didn't teach me how to subtract (had to look that up too) 3 from 12.
Still don't know. Tipster told me it was 9.
Hmmmmm, that's really a tough question. My schooling leaves me struggling to arrive at an answer.
Somebody help me out. If NRF is trading at 12 and they get rid of NRE worth 3, how much is NRF worth after they distribute (big word....I had to look it up) NRE? Try as I might, I just can't figure it out.
I guess I flunked this question. BUT, it's not my fault (never take individual responsibility). It's always somebody else's fault. Poster didn't ask the question simple enough for me, so it's poster's fault.
Of course you can cite it.......it's in the public domain. At IV you can use message number. Here, I suppose it's by date and title.
I have no objection to a COMPLETE copy & paste, as some parts of my posts need the context (or prefix) of other parts.
I ask that you NOT attempt to paraphrase my posts as I am precise in my language, frequently using terms of art. An attempt at translation by a layperson may screw it up royally.
Help yourself. The methodology is valid. Just change taxable income, hence e&p, without the gain on nre distribution, add various gains....200, 300, 400 million for example, subtract preferred dividends and the balance is taxable to common. Then, taxable / total distributions to common = pct ordinary income. The balance is roc.
Since the properties are so new (and the best evidence of fmv is an arms length transaction between unrelated parties) I think all can agree that the fair market value of the properties was the purchase price at the time the P&S contracts were signed.
We are trying to measure the fmv of the stock distributed, not the real estate. However the dominant indicator of the value of the stock will be the fair market value of the properties (and other assets) minus total liabilities.
The fmv of the properties will be determined principally by dividing current noi by todays cap rates. Cap rates are influenced by a multitude of factors including, but not limited to, the vacancy rate, length of leases in place, financial strength of tenants, etc, etc.
The properties cost roughly 2.6 billion with roughly 1.6 billion in debt leaving stockholders' equity at 1 billion (960 million in s-11a). That's book value which I suspect approximates tax basis of the stock in nrf's hands. Absent demonstrable changes in market factors, I think we can safely assume no appreciation over cost of the iconic tower......it's just too new. Do that leaves us with appreciation on about 2 billion of older assets. If it's 10%, then 200 million of unrealized appreciation, 15% = 300 million and 20% = 400 million. I doubt it's less than 200 or more than 400. Thus, I think 300 is a reasonable guess.
960 of book value equity plus 300 of unrealized appreciation = 1.260 billion fair market value of 100% of the equity (net asset value). I think there will be closer to 400 million shares outstanding by the time nre gets distributed, so per share = 3.15.
Treasury shares do not get dividends. So another way of looking at it is 12 saves paying out 1.60 per year.
1.60 / 12.00 = 13.33% return on equity used to buyback one share.
BTW, if the stock price recovers to, say, 17, they can sell the treasury shares in the open market and the gain is not taxable. 5/ 12 = 41.66% tax free profit in this illustration.
A possible downside to treasury stock holdings is the payout required to eliminate income tax at the corporate level......100% of taxable income (90% to maintain reit status). These are aggregates, not per share. For a company whose payouts are under the thresholds, fewer shares outstanding call for more payout per share. This is not a problem for nrf since they are paying out return of capital dividends which, by definition, are in excess of taxable income (actually current e&p, a modifed form of taxable income).
As to the company buyback, I found no sec rules requiring a waiting period after announcement.
As to insiders (and I suppose the company buyback) all public companies have "closed windows" aka blackout periods, where insider trading is prohibited by the company. One bigshot in a small public company (not nrf or nsam) told me (about 15 years ago) that he could not trade from the first day of the last month of each quarter until the 4th business day after earnings were released. IF, notice I say IF, nrf/nsam had an identical rule and 3Q earnings are to be released on 11/5, then no insider could trade from 9/1/15 through 11/10/15. Trading would reopen on 11/11/15.
If that were the case, how did Hess get to sell nrf shares on 12/23/14, by which date she surely knew what 4Q cad per share would be? Beats the hell outta me.
I suggest you send that question to NRF/NSAM. As of a few minutes ago NOT ONE Form 4 has been filed reporting an insider purchase. Form 4 filing requirement is 2 business days after event. As of a minute ago, not one Form 4 has been filed for either company. Not one officer or director has purchased ANY shares of EITHER company. Yet they try to convince the outside world that the stock is undervalued by the market.
Money talks. Bullfeathers walk. (yahoo will censor real word I want to use).
It's an absolute outrage that Hamo, Tylis (especially), Gilbert and Hess, the chief looters and sellers of then high FREE, giveaway robber shares have not used ANY of their ill-gotten cash to show public support for the stock. Millions upon millions of cashed-in, excessive robber shares, and not one penny buying what they try to tell us is underpriced stock. Greed has no bounds.
That's green-with-envy gary cloaked in a new screen name. Probably doesn't have a pot to #$%$ in and licks the bottom of Obama's shoes for more welfare because the rich don't deserve what they earned.
Guys like me don't survive without a very thick skin. Posts like that are amusement. Failures by their own actions, so jealous of those who succeeded by their own brains and hard work, that they throw rocks from afar, pleading for more handouts. Tough s*h*i*t. Get a job.
And how many shares of each company are outstanding? It's the percentage that counts for purposes of conflict of interest, not the number of shares.
As of April 8, 2015, all officers and directors of NSAM collectively owned 2.54% of the stock then outstanding.
As of the same date, all officers and directors of NRF owned less than 1% (number not disclosed) of the stock then outstanding.
Straight from the proxy statements. I was too lazy to ferret out individual ownership.
Thus, the big shots collectively have MORE THAN 2.5 times the percentage ownership in nsam than they have in nrf. Guess which side of the bread the butter is going on.
BTW, I predicted this was going to happen well before the spinoff. At the spin, when everybody owned the same percentage of both companies 1 dollar out of the left pocket (nrf) was 1 dollar into the right pocket (nsam). At April 8, less than 1 dollar out of the insiders' left pocket becomes more than 2.50 into their right pocket.
....... It is not in NSAM's best interest for NRF to buy back shares, ............
NRF's directors, including the officers, have a fiduciary duty to do what is best for nrf, not nsam.
The big shots own a bigger percentage of nsam than they do of nrf.....a clear conflict of interest. We'll see what nrf does tonight, if anything.
VNQ down 2%......NRF down 11% on no company -specific news. This demands a statement from the company after the close. A "we know of no reason".....statement.
If they had more than half-a-brain, they would also announce a buyback authorization AND their intention on a 3rd quarter dividend.
The tutes are now in monkey see, monkey do mode. NRF has turned into such c*r*a*p since the filing of the proxy statement the tutes are doing reverse window dressing......nobody wants to be seen holding this dog at quarter end.
Nice job, Hamo. Award yourself some more robber shares.
I suspect a bunch of stop loss orders were triggered so I watched for a steady uptic from the low. I bought 5,000 at 12.4266 on the rebound. I'm hoping for a fat dinner trade since I own so much. if not, then 1.60 / 12.4266 = 12.875%.
It takes real strength to trade against a strong market. Major averages up big time. VNQ up .85%.
Yet NRF and NSAM down. Now, that's strength. Too bad the direction is down. That's what happens when the big boys turn sour on you. Since the filing of the proxy statements, NRF and, to a lesser extent, NSAM have done nothing right. This is what we get.
Yeah, that speech went over like a f*a*rt in church. Nevertheless, it appears they have some technology (and patents) which could be valuable to a big auto manufacturer.
VW is following the classic crisis management script so far. The next step is to do something which appears to be a genuine effort to right the wrong. CDTI is so small and so cheap that it is petty cash to VW. Another big auto may also be interested if the technology has real promise to become mainstream. If, say, Ford owned CDTI and the technology became mainstream, then they pay royalties to themselves (vs interval wiper cost).
I'm nowhere near qualified to evaluate the technology. My tipster says to be patient for several months and that is my current inclination.