jasonjim

Open Letter to SEC: Wall Street's REIT Bait-and-Switch

I see nothing wrong about the transactions discussed in this article. It is normal business with a buyer beware sign. The banks win by having their loans repaid. DRE and WRI and other REITs win because they get rid of debt on their balance sheets. The purchasers of the equity offering who buy at a discount may or may not win depending upon how the market views the transaction. Since DRE and WRI and other REITs are in a much better position now to conduct their business I expect that their shares will rise, maybe considerably. So the purchasers of the new equity will win also. Everybody wins, so what is the problem here?

Duke Realty: Another REIT on the Mass Dilution Bandwagon

So Tyler, Mr. Smart Guy, what would your solution have been to resolve the serious debt problems faced by DRE? Instead of bashing the company, maybe a little credit is due the company for getting itself out of a financial mess in a very tight credit economy. When business improves in the future they can always buy back the surplus shares to improve the EPS. As you point out this is serious share dilution, but the share price has been mired at a very depressed level for a long time now, so the value is already diluted by over 200% compared to its previous highs because of debt problems. The new share issuance assures the market that the debt problem is no longer an issue. The price for this is 50% dilution, which is better than the present 200% dilution. The shares are now worth $20 IMO rather than the $8 or $9 range or less that we have seen for months.