The Short Thesis:
We believe that Gladstone Land (LAND) will suffer near-term capital depreciation as its dividend is cut further than the market expects it to be. Upon the announcement of the lower-than-expected dividend, we believe many of the shareholders will sell in search of better yield, thus dropping the market price. This thesis hinges on 2 points:
- The dividend will be cut to $0.04 monthly
- A meaningful portion of shareholders are anticipating a return to $0.12 monthly
The meat of this article will be dedicated to supporting these points. We will follow with an estimation of the magnitude of opportunity along with a discussion of the risks involved in shorting LAND.
Key thesis point #1: the dividend...
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