Seeking Alpha
Editor's notes: American Residential Properties is dizzyingly overvalued given its flawed business model and growth limitations. Arnold sees at least 40% downside, with potentially 75% downside if valued based on earnings capabilities.

Thesis

American Residential Properties (ARPI) is a newly-formed company that purchases, renovates and leases single family homes in the US on a large scale in order to generate a revenue and profit stream it can then distribute to shareholders. The company first issued stock in a private transaction in May of last year and has since become publicly traded earlier in 2013. The business model this company, and others like it, employs is fundamentally flawed promising returns of capital based upon false notions of economies of scale and management expertise. The fact is this is a poor man's game and I intend to prove that ARPI is enriching no one but its executives and that any shareholders that...

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