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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • CommonWealth REIT (CWH) 9 comments
    Aug 29, 2013 4:37 PM | about stocks: EQC

    A Commonwealth is a unit founded on law and united by compact or tacit agreement of the people for the common good. CommonWealth REIT (NYSE:CWH) is a unit operated on the tacit understanding that its value will be expropriated via a bizarre and convoluted scheme for the benefit of the Portnoy family at the expense of the common shareholder. If their scheme is unwound as we anticipate, there will be a massive amount of value unlocked for these longsuffering common owners.

    The board and management's behavior has been shameless. In the most recent board meeting, when a board member was defeated for reelection by a large majority of CWH's owners, the board appointed the loser to replace himself due to the opening that his defeat created. This tactic is one that this group of people routinely employs. 78% of shareholders voting were overruled by the board. They could have saved the time and expense of an election if they simply disclosed in the proxy that they would overrule their shareholders.

    The only purpose of a CWH vote is for show.

    CWH has massively underperformed REITs in general.

    Where has the money gone? The answer is simple: it has been diverted into the pockets of the Portnoy family who externally manage CWH through RMR, a private firm that they own. While impoverishing the CWH shareholders, the Portnoys have grown rich by growing RMR's assets under management instead of generating CWH's shareholder returns. CWH owns great assets, but the externally advised management has hidden its value.

    Stocks: EQC
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Comments (9)
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  • czosnek
    , contributor
    Comments (251) | Send Message
    Great summary. Are you planning a longer article? Do you have any legal experience to have insight as to how the legal battle will play out?
    2 Sep 2013, 12:22 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11755) | Send Message
    Author’s reply » I am not planning a longer article at the moment. We have good legal counsel assisting us with our analysis.
    2 Sep 2013, 01:08 PM Reply Like
  • pault123
    , contributor
    Comments (93) | Send Message
    Can a leopard change its spots?
    Under Fire From Investors, CommonWealth to Change Its Ways
    23 Sep 2013, 06:53 PM Reply Like
  • jjason
    , contributor
    Comments (505) | Send Message
    Chris, Thank you for the comments. I agree with you.
    23 Dec 2013, 11:55 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11755) | Send Message
    Author’s reply » Holders of Over 81% of the Outstanding Shares of CommonWealth REIT Approve Removal of Entire Board of Trustees: (CWH)
    18 Mar 2014, 05:38 PM Reply Like
  • jjason
    , contributor
    Comments (505) | Send Message
    Thanks Chris. Your articles and comments helped.
    20 Mar 2014, 11:41 AM Reply Like
  • Patrick Lowry
    , contributor
    Comments (218) | Send Message
    Chris, good call on this. I love that the whole board got axed. I noticed this one a year ago when the 13D was filed but it seemed to shoot up quick on that news so lost track of it. I could hardly believe the things that these folks were doing when I read the filing. Type of thing you see in private companies with co-ownership, but not public. Gotta give credit to the activists. Wish we could change our government officials on an annual basis as well.
    19 Mar 2014, 05:16 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11755) | Send Message
    Author’s reply » Thank you. I agree 100% on the government.
    19 Mar 2014, 05:24 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11755) | Send Message
    Author’s reply » CommonWealth REIT Sells its Interest in Select Income REIT (SIR)


    CHICAGO, July 9, 2014 /PRNewswire/ -- CommonWealth REIT (NYSE: CWH) announced today that it has sold its 22 million shares of Select Income REIT (SIR) for $31.51 per share, to Government Properties Income Trust ("GOV") and Reit Management & Research LLC ("RMR"). Total consideration for the transaction, including accrued dividends, is approximately $705 million.
    The shares sold represent the Company's entire position in a non-strategic, non-controlling interest in SIR. The Company will evaluate options for the use of proceeds from the sale, including potential debt repayments and other corporate purposes.
    10 Jul 2014, 07:44 AM Reply Like
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