I'd be in favor, as I have written here previously, of SUI management using cash flow to reduce the large amount of debt. Having to roll a lot of debt at higher interest rates whenever higher rates come could materially impact SUI's capacity to fund its dividend if interest eates go up significantly.
Must be word has leaked out on Wall Street that Dar has a big position in Sun Communities and the herd has decided to all stampede in behind him!
Happy Holidays to all on the SUI message board.
Do you still own your January 2015 ACAS options or did you part with them when they were up in price recently on the reorg news? I'm wishing you well on these and think you might have a nice profit on them by year end.
Ok NMB. We'll see how you do and if you are as "right as rain" as you've been so far you should start contemplating what cut of meat you'd like and how you want it cooked!
How high do you think the price could go tomorrow? (Just a guesstimate. I won't hold you to it but I'll buy you a great steak if you come within .50 cents of the high of the day tomorrow!).
I'm jealous of you sitting on those options. You really called it beautifully, and you stuck with your intuition and showed a lot of guts even as the clock ticked away and the stock price drooped and you bought even more options! I'm glad for you. You deserve it, man. Well done.
P.S If you guess within .25 cents of the high of the day--in your honor--I will even throw in a bottle of champagne to help celebrate your windfall and to aid you in washing down that great steak!
Are you planning to hang onto your options or sell all or some of them tomorrow?
What is your guesstimate as to how high the stock price may go tomorrow given the restructuring news and cost savings measures ACAS announced today?
What is the typical discount to NAV that ACAS-like companies are currently trading at in the market?
That may give us a clue as to what ACAS may trade up to tomorrow.
At $16.26 as traded now in After Hours Trading, that puts ACAS at a 21% discount to NAV of $20.54 as reported in today's earnings release.
What is a sensible discount to NAV that ACAS might trade at given that it is now splitting into three companies, but its peers, I believe, are currently trading at discounts to NAV? And again, anyone know what % discount to NAV those ACAS peers are presently typically trading at?
Thanks in advance,
I think I recall you laid out a potential scenario wherein ACAS mgmt might release news today (Monday) indicating that the BOD affirmed the reorg plan and then that would give the market a couple of days before the conference call Thursday morning wherein mgmt would give a lot more detail on the reorg.
While I know that was just a guesstimate on your part, do you think we are still likely to get a news release today--or for that matter--at any time PRIOR to the conference call on Thursday morning?
Thanks in advance for your thoughts.
You will get a book value update when they release this quarter's earning (Nov 3 I yhink is the date). You could go back and read last quarter's release and see what BV was at that time, too.
Markets have a way of reminding companies that concrete action must be taken even when it appears managements are headed in the right direction. That "reminder" usually comes in the form of a lower stock price to help "focus the mind" of management.
The traders and short term boys will join the long term holders in all rushing into ACAS shares if management follows through on what we perceive is logical for them to do.
Patience is a virtue, but a very difficult one--especially among the young when hormones are raging, and markets!
I observed the method needed to preserve NOL's in a prior situation. It has to do with how the change of control is structured but it is quite doable.
Excellent reply. I saw the situation with an externally managed REIT blow up in shareholders faces previously. There is too much of a carrot for the external managers to fulfill their fiduciary duty to shareholders and they opt to fill their own pockets.
It seems, of course, as always--that we must simply TRUST ACSF/ACAS to be good guardians of our shareholder value. Perhaps FSC/FSFR have a bit of a shady history and track record in that regard that both ACSF and ACAS have no intention of duplicating???
Here is an incisive post about FSFR/FSC:
"Shares may trade higher due to FSFR's higher than average dividend yield for a senior floating rate BDC, but when next quarters results are official, and investors realize they won't be earning that dividend, reality will sink in and this thing will be priced along with other BDC's that aren't earning their dividend.
I don't think it's just a coincidence that FSC & FSFR both raised their dividend beyond what their portfolios are earning in an attempt to make their secondaries more attractive to investors.
The Fifth Street franchise has proven to be a wealth destroyer for shareholders, although it's a real money maker for the external manager.
FSC IPO'd in June 2008 $ $14.12. NAV was $13.02 at IPO.
Today FSC's share price trades 31% lower than the IPO price and NAV is 25% less.
FSFR IPO'd a mere 13 months ago at $15.00 and already is trading 17% lower than it's IPO price, and now with this highly dilutive secondary, has managed to destroy NAV per share by over 15%.
With so many BDC's where management operates in their shareholders best interest, I don't see any reason to consider the Fifth Street BDC's."
After Blank's post I looked at the FSFR situation. It's interesting that they indicate that they had the support of ISS (?) the shareholder advocacy group that opines on proxy vote issues and one other group for their pending massive share offering at FSFR. I did not read deeply enough to understand why FSFR felt they needed to do such a big, dilutive offering. The bit I read said they were to use proceeds to repay debt and use for corporate purposes and to make some further investments. Nothing seemed too urgent, NMB, It does cause on to worry that ASCF might like to do the same thing at some point in the future. It is in FSFR's best interest to increase AUM to earn a higher management fee, and shareholders must be concerned about dilution. ACSF has the same interest at heart. One wonders how FSFR got the approval of existing shareholder to do the share offering. ACSF share owners would have a say on such matters, and one would think they would certainly vote down such a proposal. From ACAS's standpoint, increased AUM at ACSF would bring in more $, so it is not as if ACSF is free from influence from ACAS either.