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  • Gramercy Capital Management Discusses Q4 2012 Results - Earnings Call Transcript [View article]
    Chris, I concur with the assessment that the "market" isn't assessing the value of the business appropriately given the stock market reaction to the report yesterday. However, I'm curious if it's just the laziness of the market or if we're missing something perhaps. I think DuGan is the right person to lead the revitalization of GKK. He's laid out a good plan that he intends to follow and he seems to have laid out a general valuation for the firm given his comments on NOI etc.
    Mar 20, 2013. 10:23 AM | Likes Like |Link to Comment
  • Grupo Prisa's Important Deal [View article]
    I agree with much of the facts you're pointing to and can't argue that we need to see that the company remain a going concern versus the alternative; however, I'm truly concerned that even if the current pricing of the new convertible preferred is 3x the current stock price, the base upon which you're comparing is artificially low especially given the underlying intrinsic value of the company that we both know is much higher. Hence, that's my reason to say that it's too low an offer. The conversion price should be way higher to mitigate the dilutive impact to current shareholders. Granted, the timing of such a deal is predicated on current stock pricing, but I think it's really unwise to issue stock at a time knowing that the intrinsic value is well above where its currently trading. The expected dilution could possibly have a short-term negative impact on the share price.

    Moreover, with the amendment to the current debt pushing it out to 2014/2015, I would have thought management would have ample amount of time to right the ship or at least steer it in the right direction so that the stock price could recover. Then, it could propose such a transaction that would be less dilutive. But, maybe there's cause for more concern based upon the European situation and its affect on the business. That might be a reason mgmt truly believes that now is the time. Interesting.

    I agree, the play is to continue to buy more given this news event if I believe it's undervalued. But, I'd much rather be in the preferred than the common under those terms given the relative seniority in cap structure and additional yield despite the 3x share price. Yet, I'm a small investor so I won't get a chance to participate in the offering like you, if you so choose.

    I do appreciate your insight as to the transaction and your commentary. Let's just hope that this new recap works (assuming it passes by vote) and the stock price begins to reflect underlying value.
    Jun 6, 2012. 04:47 PM | Likes Like |Link to Comment
  • Grupo Prisa's Important Deal [View article]
    Not sure why you prefer this Whitney as I understand this offer. You want more dilution? Granted the debt is dramatically reduced, which allows the company to conserve cash while providing a positive catalyst to the stock price. But, issuing equity at such low a low valuation given how undervalued this investment is seems like an awful decision. I understand Carlos Slim's predicament of an additional investment, he's getting a good deal with stock at cheap prices.

    Although the banks may give up higher yields on existing debt they have with the company for lower yields now, the banks get an added kicker with potentially higher yields if rates go higher due to a Greece exit and potential for financial panic. Not to mention the opportunity to get equity upside if management "rights the ship." Something doesn't add up. The conversion price should be way higher to make this seem appropriate at this time. And, I don't understand why you would want such a structure. Seems like there could be better alternatives in a different structure that would preserve our upside, reduce dilution, and yet provide breathing room for the company. Maybe I don't fully understand the offer, but am I missing something?
    Jun 5, 2012. 06:01 PM | Likes Like |Link to Comment