You paid $8.31 per share? Really? My sincere condolences.
I'm hoping to buy back most of the shares I dumped at $9.xxxx, when the falling knives become catchable...until then, I'm sitting this one outout and keeping my cash on the sidelines.
so, in the interest of balance, let me note a few items that I think are negative:
(disregarding, for the moment, the issuance of new shares, which is being beaten to death by folks with heavier cudgels than I wield)
1»Weighted average coupon rates on CRE loans declined from 6.6% to 6.1%
2»Real Estate investments declined by more than $53 million ($1,658,659,000 - 1,605,316,000)
3»Multifamily and Retail occupancy rates both declined (RAIT only, excluding IRT numbers)
4»Investment Interest income down by $10.539 million (2015Q2 vs 2014Q2)
5»Investment Interest expense up (2015Q2 vs 2014Q2)
6»As an inevitable result of 4 & 5, Investment Interest margin down $10.598 million ($27,123,000 to $16,525,000)
7»Interest expense (non-investment), G&A expense, Real Estate Operating expense, etc. are all up, bringing total expenses up by more than $18 million, from $59.622 million to $77.653 million
NOTE: Real Estate Operating expense was way up even though the number of multi-familiy units owned declined by more than 1000 units. What's up with that?
8»Total equity down by more than $4.8 million (from $582,990,000 to $587,842,000)
9»Total shareholders' equity $378.956 million, less the liquidation value of the preferred shares ($231.733 million), stands at just $147.223 million, or $1.77 per share.
10»After "adjustments", the $520.128 figure, based on 89,268,462 shares outstanding yields a BVPS* of $5.82
*(B)ook (V)alue (P)er (S)hare
NOTE: Item 10» may be considered positive, momentarily, in light of the current market price of RAS common shares, but as recently as 10 days ago, RAS was selling at a significant premium to book value. A larger premium, in percentage terms, than the current 10% discount. The $5.50 price established for the dilution offering represents about a 5% discount, comparable to an industry-standard DRIP discount.
"the credit quality of a company borrowing at credit card rates will not be impacted by any FED moves"
Sounds just a tiny bit sarcastic: am I mistaken? Credit card rates DO get adjusted upward from time to time, but then, they aren't locked to LIBOR+[2|3|4]%, as some other forms of borrowing are.
Oh, crud: here comes another "trading around a core position" long-winded lecture!
Hold onto your hats, the big windy is about to start blowing hard!
Note (2) on page S-3 of the prospectus:
"Based on 82,150,475...weighted-average shares outstanding...The weighted-average shares outstanding excludes the dilutive effect of securities totaling 7,117,987...shares...as these securities are not outstanding for purposes of our quarterly dividends. These securities will be included in weighted average shares for purposes of CAD when, and if, these securities are converted to common shares."
On the next page of the prospectus (page S-4):
"Common shares to be outstanding after this offering 90,895,723 shares"
That number, per note (1), "Excludes up to 1,200,000 common shares issuable upon exercise of the underwriters’ option."
Note (2)on page S-4 says:
"The number of common shares outstanding after this offering is based on 82,895,723 common shares outstanding as of June 30, 2015. This number does not include: (i) 1,927,330 common shares reserved and available for issuance under our incentive plans as of June 30, 2015; (ii) 7,918,919 common shares reserved and available for issuance under our common share at-the-market offering program as of June 30, 2015; (iii) 7,766,850 common shares reserved and available for issuance under our dividend reinvestment and share purchase plan as of June 30, 2015; (iv) 20,554,051 common shares reserved and available for issuance upon conversion of our outstanding convertible senior notes; (v) 9,931,000 common shares reserved and available for issuance pursuant to common share purchase warrants held by, or issuable to, ARS VI Investor I, LLC, or ARS; and (vi) 213,958 common shares reserved and available for issuance pursuant to the redemption of Class B membership units of our subsidiary."
Using the 92,095,723 number, and "Adjusted book value" of $520.128 million, BVPS calcs out to slightly less than $5.65 per share.
92,095,723 = 90,895,723 + 1,200,000 oversubscription, if fully exercised
The "Consolidated Statements of Operations", from Exhibit 99.1 of the 2015.07.30 8-K lists "Weighted-average shares (basic)" 82,150,475 and "Weighted-average shares (diluted)" 89,268,462, a difference of 7,117,987 shares.
Note (2) on a following page:
"The weighted-average shares outstanding excludes the dilutive effect of securities totaling 7,117,987"
"these securities are not outstanding for purposes of our quarterly dividends. These securities will be included in weighted average shares for purposes of CAD when, and if, these securities are converted to common shares."
on page 32 of the 2015-05-08 10-Q:
""we sold the following securities to the investor for an aggregate purchase price of $100.0 million: (i) 4,000,000 Series D Preferred Shares, (ii) warrants exercisable for 9,931,000 common shares (which have subsequently adjusted to 10,479,889 shares as of the date of filing this report); and (iii) investor SARs exercisable with respect to 6,735,667 common shares (which have subsequently adjusted to 7,107,948.84 shares as of the date of filing this report)"
"The warrants and investor SARs had an initial strike price of $6.00 per common share, subject to adjustment. As of the filing of this report, the strike price has adjusted to $5.59."
One might suppose that the 7,117,987 share differential represents 7,107,948.84 (SAR) shares as of 5/8 further adjusted thru the 7/30 filing date.
Strike price of the SAR units has probably also moved from the 5/8 adjusted value of $5.59 per share.