Activist rumblings at American Capital

"The Company needs to pause on large-scale transactions and rebuild its credibility the only way it can: by solidly executing its organic operations for an extended period of time," writes Marcato Capital in a letter to American Realty Capital (ARCP) lead independent director Leslie Michelson. Marcato owns about 2.4% of the company.

Equity sale: "We were extremely frustrated by the Company's recent equity issuance at $12 per share.  We found it disturbing that the Company would issue equity after repeatedly stating publicly that it had no intention to do so, and at a price that it has repeatedly acknowledged undervalues the shares."

Deals: "ARCP's rapid acquisitions ... have made the Company's financials complicated and difficult to understand ... The best evidence of this is that the Company itself seemingly cannot keep its own financials straight."

Shares +0.25% premarket

Previously: Over one-third vote against American Realty executive pay plan

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Comments (14)
  • Steve Rasher
    , contributor
    Comments (4663) | Send Message
    I very much like the direction and growth ARCP has taken, but agree it is now time for the board and management to step back and execute on what they have in hand. Steve Rasher
    3 Jun 2014, 08:32 AM Reply Like
  • David2011
    , contributor
    Comments (13) | Send Message
    Agree. For those who bought for the "spin-off", or with the assurance that no units would be issued at the current price, ..., management has been frustrating. The bonuses management is awarding itself for a much lower valuation, because golf is not in their schedule, demonstrates a "tin ear" or worse. I am substantially long and unhappy with this investment.
    3 Jun 2014, 08:33 AM Reply Like
  • embryorambo
    , contributor
    Comments (282) | Send Message
    About time the Bob's at ARCP got called out for acting like a bunch of clowns
    3 Jun 2014, 08:38 AM Reply Like
  • marialexus
    , contributor
    Comments (9) | Send Message
    I too am frustrated! Glad to see Marcato Capital being active here. I have been long ARCP for quite a while. I was looking forward to the "spin-off" and possibly getting back some principal then all of a sudden "never mind, we are going to sell it, issue a bunch of stock at a huge discount and help finance a troubled restaurant business". I am not a happy camper, but I will give it a little time to see if settle down to business for a while.
    3 Jun 2014, 08:52 AM Reply Like
  • Dzeee
    , contributor
    Comments (7) | Send Message
    I feel used and abused by management at ARCP. I have 15000 shares, and would sell if I wasn't so upside down. I've been patient, time to redeem yourself.
    3 Jun 2014, 08:56 AM Reply Like
  • COBeeMan
    , contributor
    Comments (2979) | Send Message
    I'm buying as much as I can below $12.20. You whiners should just sell now and move on!
    3 Jun 2014, 09:27 AM Reply Like
  • tsudaes
    , contributor
    Comments (22) | Send Message
    Totally agree with the activist.
    3 Jun 2014, 09:31 AM Reply Like
  • bale002
    , contributor
    Comments (478) | Send Message
    Join the chorus.
    3 Jun 2014, 09:53 AM Reply Like
  • 745
    , contributor
    Comments (388) | Send Message
    Think I'll buy a little more of the stock and then take my wife out for a nice lobster dinner!
    3 Jun 2014, 09:57 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2865) | Send Message
    The pay package is absurd. Also not thrilled with the equity raise, but DRIP the dividends and wait it out. Real estate is a long term hold, not a short term investment.
    3 Jun 2014, 10:11 AM Reply Like
  • konihug
    , contributor
    Comments (144) | Send Message
    Maybe it makes sense to wait it out, but, really, the way this company is making so many huge deals in such a short time does not create confidence. After reading about the Lobster deal, I cancelled a buy order I had already placed to add to what I have already. I am still happy that I cancelled it. I am waiting for a few "consolidation quarters" before putting more money to work here. Dividend yield is nice, of course. I hope they at least keep the dividends where they are now. Don't think they can raise them.
    3 Jun 2014, 11:12 AM Reply Like
    , contributor
    Comments (6705) | Send Message
    With this Marcato letter, the lawyers & litigation will be the next hit-- a la PSEC and others where there is actual or perceived poor management / decisions.


    Brad Thomas is supposed to be talking to Schorsch again today-- hope he gets something other than the fluff of cut-short Street interview-- he is not even allowed to talk about what was in the interview since it is their property; how silly.
    3 Jun 2014, 01:05 PM Reply Like
  • raykrv6a
    , contributor
    Comments (3641) | Send Message
    NV_GARY. The thought of some type of lawsuit coming up in ARCP's future has crossed my mind. I certainly wouldn't mind having the SEC examine the trading of the equity to make sure it's on the up and up. I certainly would like to see ARCP in the news for good stuff and not the issues we are seeing. Money isn't everything.
    3 Jun 2014, 01:45 PM Reply Like
  • COBeeMan
    , contributor
    Comments (2979) | Send Message
    Maybe that will finally get the price down around $12 so my order can execute!
    5 Jun 2014, 09:25 AM Reply Like
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