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Since I wrote up Grubb & Ellis (GBE) as a possible short, the company has released its Preliminary Results for Fourth Quarter 2009; Updates Fiscal Year 2010 Outlook.

The company's revenue and EBITDA for the fourth quarter of 2009 fell short of the previous guidance of revenue of $149 million to $161 million and adjusted EBITDA of $6 million to $10 million. They instead expect to report revenue of approximately $147 million and adjusted EBITDA of approximately $1.0 million.

The company now anticipates 2010 total revenue of $550 million to $575 million and adjusted EBITDA of $10 million to $15 million. The preferred stock has a 12% dividend. That's $10.8 million annually on the $90 million of preferreds, leaving potentially nothing for the equity.

GBE has a market cap of $97 million. I don't think there is any debt besides the preferreds so the enterprise value is around $190 million. That seems far too high for $10 million in EBITDA, reinforcing my suspicion that the equity has no value and the company is really owned by the preferreds.

Also notable is that the preferreds are convertible at $1.65, which is only 13% higher than current levels, and the preferreds constitute a huge "overhang."

The company will release its fourth quarter earnings before the market opens Thursday. Management will host a conference call at 10:30 a.m. Eastern Time to review the results. The direct dial-in number for the conference call is 1.800.706.7749 for domestic callers.

Source: Grubb & Ellis Reports Thursday: Equity Has No Apparent Value