Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
As always, I find my understanding of the economy (and markets) is enhanced by a weekly reading of Jeff's WTWA. It certainly demonstrates not everything is worth only what is paid for it.
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
Q -- Good of you to post your comment here as well as at the article by Dividend Growth Investor...so I'll also re-post my reply from that article's comment stream: ______________________...
Thank you. I welcome both your private msg w/ DLR and your editorial.
My only reaction is...why didn't DLR publish this information (and more to address other Highfields charges) immediately after the Sohn Conference? DLR stockholders have suffered a $6/share haircut, which, assuming 'all is well' was completely unnecessary.
There is simply no justifiable explanation that this important information is ONLY available to those few STILL reading this comment stream...and only because you have kindly investigated and requested information...thanks again.
Rich p.s. I said earlier I would sleep on a decision to hold/sell...it may be that I made the correct decision to hold.
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
Q -- Thank you. I welcome both your private msg w/ DLR and your editorial.
My only reaction is...why didn't DLR publish this information (and more to address other Highfields charges) immediately after the Sohn Conference? DLR stockholders have suffered a $6/share haircut, which, assuming 'all is well' was completely unnecessary.
There is simply no justifiable explanation that this important information is ONLY available to those few STILL reading this comment stream...and only because you have kindly investigated and requested information...thanks again.
Rich p.s. I said earlier I would sleep on a decision to hold/sell...it may be that I made the correct decision to hold.
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
F&G (and Dividend Growth Investor) -- F&G, Thank you, but I don't require your advice on my options.
I'll try to make this simple for yourself, though it won't be brief. The issue goes to highly specialized accounting practices, and I am not qualified to tell others $DLR or Highfields is right or wrong (and I suspect you also lack the specialized skills to do so).
The above May 13th article is woefully incomplete in summarizing the Highfield charges as reported elsewhere 5 days earlier (information obviously available to the author). So what were the reported charges made by Highfields? They are contained in the following articles listed on FIN VIZ, Yahoo!, and other financial media sites:
a) From Bloomberg (May 8th) Digital Realty Trust Inc. ($DLR) is a stock to sell short because the manager of data-center real estate relies on access to capital markets to fund its dividend, Jonathon Jacobson of Highfields Capital Management LP said.
“Pricing is going lower, competition is increasing, and the company is tapping into capital markets as aggressively as they can,” Jacobson, the founder and chief executive officer of $11 billion investment firm Highfields, said today at the 18th Ira Sohn Investment Conference in New York. “Do you want to pay three times book value for this?”
The San Francisco-based company fell 6.9 percent to $64.25 at 6:22 p.m. New York time in extended U.S. trading. Jacobson said the fair value of Digital Realty is about $20 a share. Its dividend yield is 4.5 percent, compared with 2 percent for the Standard & Poor’s 500 Index, according to Bloomberg data.
The rate of recurring capital expenditures is” materially” higher than the company represents, according to Jacobson. Digital Realty’s competition includes cloud businesses from companies such as Google Inc. and Amazon.com Inc., and from other data centers that have joined the field since there is no barrier to entry, he said.
Investors have sold short about 18 million shares of Digital Realty, or 14 percent of the total outstanding, according to exchange data compiled by Bloomberg. http://bloom.bg/16vf0Ma)
b) From the WSJ (May 8th) Highfields Capital Management’s founder Jonathon Jacobson delivered a blistering attack on a real-estate investment trust that focuses on housing data-centers Digital Realty Trust.
Jacobson, who doesn’t typically talk about short positions, criticized the company’s dividend payments and suggested the stock could fall to as low as $19 from its close of $69.02 on Wednesday.
Digital Realty shares dropped 6% in after-hours trading following Mr. Jacobson’s presentation at the Sohn Investment Conference in New York on Wednesday.
A representative of Digital Realty wasn’t immediately reached for comment. He said Boston-based Highfields, which he said has a short position in the REIT, feels the company has a risk of big competition from technology giants such as Google, Amazon, and Microsoft.
Jacobson said the company’s spending per year will be too high to maintain its dividend payout, a key draw for the REIT. Investors are looking high and wide for dividend-paying stocks, he said, but not all are alike. http://bit.ly/10Ezida
c) From Barrons (May 8th) Beware the illusion of yield, says Jonathon Jacobson, the founder of Highfields Capital Management, speaking at today’s Sohn Investment Conference. Said Jacobson, “The problem is that all dividends are not created equal.”
You want cash flow growth – examples he listed are Procter & Gamble and Coke – rather than companies that must go to the capital markets to fund their yield. “Beware,” he says, of AT&T . Wireline is a melting ice cube and wireless is becoming more competitive. Also “beware” Linn Energy, because half of its distributable cash flow is from hedging gains, Jacobson says.
Another name on the beware list: a real estate investment trust Digital Realty Trust. It is a $69 stock worth $20, Jacobson says. It has a $9 billion market cap, and a 4.6% yield. The “fundamentals are deteriorating, and rapidly. The data center business is a commodity business with no barriers to entry, recurring capex is materially higher than company represents. The dividend is not sustainable and depends on continue access to capital markets.”
True adjusted funds from operations (AFFO) is 87 cents per share, not the $3.90 per share the company reports.
Here is a smoking gun, he said. Digital changed the definition of non-recurring capital expenditures in 2011 to include maintenance capex expenditures. The company is issuing shares aggressively, and continues to acquire new assets, but that a creates a bigger cash flow hole down the road.
“Shorting stocks is hard. I ask you – do you want to pay three times book value for this?” he said. Then he showed a slide of giant data storage boxes in a room. And then, a final slide that said $DLR’s dividends are being paid with funds from future investors. http://bit.ly/16vf12u
Again--I have no position on the veracity of the claims made by Highfields…but I do know better than to accept 3 sentences from a telephone interview as being a satisfactory response to the full scope of Highfields charges!
What else should we know? Here is one--What is this Ira Sohn Conference? It’s an annual gathering of some of the world’s best-known hedge-fund managers. Each is allotted 15 minutes to make their best case for an investment idea or two. Big pops or drops in the immediate aftermath of a mention from one of these guys is not unusual. Who attends in addition to Highfields? James Chanos, David Einhorn, Steven Eisman, Jeffrey Gundlach, among others.
Did other Sohn attendees recommend shorts? Yes, for example Seagate, Home Capital Group, and Chipotle.
Here's another--Would it be helpful to know a bit more about Highfields…are they the stupid villains they are painted to be? According to their website, “Highfields Capital Management is a value-oriented investment management firm which manages private investment funds for endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors. Highfields' investment funds have over $11 Billion in net capital invested worldwide in public and private companies across a wide variety of industries and security types. The firm was founded in 1998 and is based in Boston, MA.
If you don’t know which side is correct, what do you know? I know $DLR has failed their stockholders. $DLR should have immediately provided a detailed rebuttal to the charges leveled by Highfields (facts being the best defense). Instead management adopted an “ignore them” tactic. That tactic is clearly not working for stockholders (the owners of $DLR). The failure of $DLR to quickly respond creates doubt, which itself strengthens the short position of Highfields.
A few comments above, Dividend Growth Investor dismissed my communication concerns with “Of course $DLR responded to the Highfields Capital BS”. He provided a link to a WJS telephone interview of the $DLR CEO. What exactly, did the CEO say in response to the charges reported in the media?…
>>> Our operating cash flow provides for very solid dividend coverage. I don’t know if that’s ever been called into question before. <<<
>>> We don’t see ourselves as competing with a Google or Amazon. In fact, everyone is benefiting from the growth in … cloud whether Google builds its own data centers or whether [people] choose to outsource their facility with Digital Realty,” he said. “We have one of the strongest balance sheets in the real estate industry and we’re providing a very strong dividend coverage and consistent earnings growth over the year. We expect that to continue. <<<
That’s it!…that is 100% of the $DLR CEO quotes contained in the brief WSJ report of their telephone interview published on May 9th, the day following the charges made by Highfields. Nothing from $DLR since--not a word, nada, zilch, complete silence!
So why is $DLR’s silence important to shareholders? Before Highlands accused DLR of various accounting deficiencies at the Sohn Conference, $DLR opened at $68.87, and advanced by $0.43 to $69.30. When Highlands spoke $DLR declined sharply, closing up only 15 cents...and has continued to decline, and decline more:
May 8th: Close $69.02, Change +$0.15 May 9th: Close $66.07, Change -$2.95 May 10th: Close $65.51, Change -$0.56 May 13th: Close $66.72, Change +$1.21 May 14th: Close $65.45, Change -$1.27 May 15th: Close $63.76, Change -$1.69 May 16th: Close $63.52, Change -$0.24 May 17th: Close $63.03, Change -$0.49 Cumulative 8 Day Change = -$5.99 (-8.7%)
There are over 128 million shares outstanding. A $6 decline equals a $768 million haircut suffered by shareholders thus far. Had $DLR responded immediately and effectively, it would be reasonable to assume the damage would not be so great…maybe only quarter? Maybe a full recovery by this date?
Others are not concerned about $DLR’s silence, why should you be? SA sends $DLR email to 1,338 members. It may be that others don’t care that the share price is declining, or why it is declining, or if it continues to decline. I care. If I am the ONLY concerned stockholder, that doesn’t lessen my concern. IMO, shareholders should have every expectation of a full $DLR rebuttal.
The Business Model Of The Dividend Growth Investor [View article]
Pen -- Just to be clear, you are referencing my comment of May 15th at 10:19pm.
I have not noticed in any posts from either David in which they disputed my assertion with respect to earnings (perhaps you could help by identifying them for me).
Your challenge today (1:36pm) suggests a research project, and that will consume time. Therefore in the absence of confirmation here from others, I'll need to catch up to you in a future article, to which I will post details and links with respect to references to what 'you find hard to believe'.
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
Miss CBD -- I appreciate that you took the opportunity to address me. Having found myself in a similar position on more than one occasion, I relate to the situation you have described.
I also want to emphasize (and you also referenced it), I have no position as to who is more correct--Highfields or DLR.
On a related topic (portfolio management), it occurs to me to ask: Do you really need to hold that stock to remind you of the potential pitfalls of investing? Is it possible you believe that stock is 'dead money'...and if so, have you considered that you might improve your portfolio by be taking your loss, and reinvesting in something that has greater probability of advancing?
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
F & G -- I am more than aware of Brad's article. Furthermore, should you take a walk through that article's 120 comments, you will find my contributions...including my response to Brad's offer as follows:
<<< richjoy403 - I will reach out to DLR's CEO for a Q&A next week...Let me know of any specific questions you (or others) have....I can't promise the interview but I will request one. Thanks, Brad <<<
F&G, I don't know of your corporate background, but I assure you my own strongly suggests the executives of both DLR and Highfields are very bright people able to both walk and chew gum.
Thus though DLR's top execs may be out of town most of the month, the staff members (the ones who actually prepare such detailed responses) could have/should have, spent a few days following the Sohn Conference on the 8th, preparing a detailed response...and that response could have been reviewed for approval by those top execs on the 10th, 11th, 12th, 13th, 14th, 15th, or 16th, and released--asssuming they have an intention to make a timely full and detailed response to stockholders, and other interested parties.
Or, in brief...I cannot accept your assumptions as a reasonable explanation for delaying their response to events of May 8th to next month!
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
Q -- Thank you. I don't believe we are far apart.
I actually did see the WSJ's brief May 9th article, which reads:
>>> Digital Realty DLR +0.44% Trust’s Chief Executive Michael Foust said Wednesday’s smack down on the datacenter REIT by Highfields Capital Management’s founder Jonathon Jacobson “was largely mischaracterizing and drawing inaccurate conclusions from our accounting and financial disclosures.”
Jacobson, who has a short position in Digital, said at Ira Sohn Investment Conference in New York that Digital Realty faces competition from Google and Amazon and that its spending is too high to maintain its dividend.
“Our operating cash flow provides for very solid dividend coverage. I don’t know if that’s ever been called into question before,” Foust said during a phone interview.
Foust also fought back against the idea that Google and Amazon were competitors.
“We don’t see ourselves as competing with a Google or Amazon. In fact, everyone is benefiting from the growth in … cloud whether Google builds its own data centers or whether [people] choose to outsource their facility with Digital Realty,” he said. “We have one of the strongest balance sheets in the real estate industry and we’re providing a very strong dividend coverage and consistent earnings growth over the year. We expect that to continue.”
Digital Realty’s stock closed down 4.3% Thursday. <<<
As you know, the Highfields accusuations also went beyond those mentioned in the article.
My observation is that Fousts telephone comments were a non-specific response, issued 8 days ago. DLR has had ample opportunity to a full response (not unlike LNCO's in-depth slides and commentary in response to the February allegations leveled in Barrons).
For clarity, I should add--I am NOT suggesting the Highfields allegations are correct (for example, it is notable their auditing firm has not qualified their opinion),. But I do find it reasonable to expect DLR management to owe the owners of the company (stockholders) a more detailed response than thus far provided...including responses to the detailed questions you asked.
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
[Congratulations! A very auspicious 1st article...I look forward to more of the same.]
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
The Big Temptation For Dividend Investors Right Now [View article]
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
______________________...
Thank you. I welcome both your private msg w/ DLR and your editorial.
My only reaction is...why didn't DLR publish this information (and more to address other Highfields charges) immediately after the Sohn Conference? DLR stockholders have suffered a $6/share haircut, which, assuming 'all is well' was completely unnecessary.
There is simply no justifiable explanation that this important information is ONLY available to those few STILL reading this comment stream...and only because you have kindly investigated and requested information...thanks again.
Rich
p.s. I said earlier I would sleep on a decision to hold/sell...it may be that I made the correct decision to hold.
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
My only reaction is...why didn't DLR publish this information (and more to address other Highfields charges) immediately after the Sohn Conference? DLR stockholders have suffered a $6/share haircut, which, assuming 'all is well' was completely unnecessary.
There is simply no justifiable explanation that this important information is ONLY available to those few STILL reading this comment stream...and only because you have kindly investigated and requested information...thanks again.
Rich
p.s. I said earlier I would sleep on a decision to hold/sell...it may be that I made the correct decision to hold.
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
What If Long-Term Dividend Investors Buy Before A Crash? [View article]
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
I'll try to make this simple for yourself, though it won't be brief. The issue goes to highly specialized accounting practices, and I am not qualified to tell others $DLR or Highfields is right or wrong (and I suspect you also lack the specialized skills to do so).
The above May 13th article is woefully incomplete in summarizing the Highfield charges as reported elsewhere 5 days earlier (information obviously available to the author). So what were the reported charges made by Highfields? They are contained in the following articles listed on FIN VIZ, Yahoo!, and other financial media sites:
a) From Bloomberg (May 8th)
Digital Realty Trust Inc. ($DLR) is a stock to sell short because the manager of data-center real estate relies on access to capital markets to fund its dividend, Jonathon Jacobson of Highfields Capital Management LP said.
“Pricing is going lower, competition is increasing, and the company is tapping into capital markets as aggressively as they can,” Jacobson, the founder and chief executive officer of $11 billion investment firm Highfields, said today at the 18th Ira Sohn Investment Conference in New York. “Do you want to pay three times book value for this?”
The San Francisco-based company fell 6.9 percent to $64.25 at 6:22 p.m. New York time in extended U.S. trading. Jacobson said the fair value of Digital Realty is about $20 a share. Its dividend yield is 4.5 percent, compared with 2 percent for the Standard & Poor’s 500 Index, according to Bloomberg data.
The rate of recurring capital expenditures is” materially” higher than the company represents, according to Jacobson. Digital Realty’s competition includes cloud businesses from companies such as Google Inc. and Amazon.com Inc., and from other data centers that have joined the field since there is no barrier to entry, he said.
Investors have sold short about 18 million shares of Digital Realty, or 14 percent of the total outstanding, according to exchange data compiled by Bloomberg.
http://bloom.bg/16vf0Ma)
b) From the WSJ (May 8th)
Highfields Capital Management’s founder Jonathon Jacobson delivered a blistering attack on a real-estate investment trust that focuses on housing data-centers Digital Realty Trust.
Jacobson, who doesn’t typically talk about short positions, criticized the company’s dividend payments and suggested the stock could fall to as low as $19 from its close of $69.02 on Wednesday.
Digital Realty shares dropped 6% in after-hours trading following Mr. Jacobson’s presentation at the Sohn Investment Conference in New York on Wednesday.
A representative of Digital Realty wasn’t immediately reached for comment.
He said Boston-based Highfields, which he said has a short position in the REIT, feels the company has a risk of big competition from technology giants such as Google, Amazon, and Microsoft.
Jacobson said the company’s spending per year will be too high to maintain its dividend payout, a key draw for the REIT. Investors are looking high and wide for dividend-paying stocks, he said, but not all are alike.
http://bit.ly/10Ezida
c) From Barrons (May 8th)
Beware the illusion of yield, says Jonathon Jacobson, the founder of Highfields Capital Management, speaking at today’s Sohn Investment Conference.
Said Jacobson, “The problem is that all dividends are not created equal.”
You want cash flow growth – examples he listed are Procter & Gamble and Coke – rather than companies that must go to the capital markets to fund their yield.
“Beware,” he says, of AT&T . Wireline is a melting ice cube and wireless is becoming more competitive. Also “beware” Linn Energy, because half of its distributable cash flow is from hedging gains, Jacobson says.
Another name on the beware list: a real estate investment trust Digital Realty Trust. It is a $69 stock worth $20, Jacobson says. It has a $9 billion market cap, and a 4.6% yield. The “fundamentals are deteriorating, and rapidly. The data center business is a commodity business with no barriers to entry, recurring capex is materially higher than company represents. The dividend is not sustainable and depends on continue access to capital markets.”
True adjusted funds from operations (AFFO) is 87 cents per share, not the $3.90 per share the company reports.
Here is a smoking gun, he said. Digital changed the definition of non-recurring capital expenditures in 2011 to include maintenance capex expenditures. The company is issuing shares aggressively, and continues to acquire new assets, but that a creates a bigger cash flow hole down the road.
“Shorting stocks is hard. I ask you – do you want to pay three times book value for this?” he said. Then he showed a slide of giant data storage boxes in a room. And then, a final slide that said $DLR’s dividends are being paid with funds from future investors.
http://bit.ly/16vf12u
Again--I have no position on the veracity of the claims made by Highfields…but I do know better than to accept 3 sentences from a telephone interview as being a satisfactory response to the full scope of Highfields charges!
What else should we know?
Here is one--What is this Ira Sohn Conference? It’s an annual gathering of some of the world’s best-known hedge-fund managers. Each is allotted 15 minutes to make their best case for an investment idea or two. Big pops or drops in the immediate aftermath of a mention from one of these guys is not unusual. Who attends in addition to Highfields? James Chanos, David Einhorn, Steven Eisman, Jeffrey Gundlach, among others.
Did other Sohn attendees recommend shorts? Yes, for example Seagate, Home Capital Group, and Chipotle.
Here's another--Would it be helpful to know a bit more about Highfields…are they the stupid villains they are painted to be? According to their website, “Highfields Capital Management is a value-oriented investment management firm which manages private investment funds for endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors. Highfields' investment funds have over $11 Billion in net capital invested worldwide in public and private companies across a wide variety of industries and security types. The firm was founded in 1998 and is based in Boston, MA.
If you don’t know which side is correct, what do you know?
I know $DLR has failed their stockholders. $DLR should have immediately provided a detailed rebuttal to the charges leveled by Highfields (facts being the best defense). Instead management adopted an “ignore them” tactic. That tactic is clearly not working for stockholders (the owners of $DLR). The failure of $DLR to quickly respond creates doubt, which itself strengthens the short position of Highfields.
A few comments above, Dividend Growth Investor dismissed my communication concerns with “Of course $DLR responded to the Highfields Capital BS”. He provided a link to a WJS telephone interview of the $DLR CEO. What exactly, did the CEO say in response to the charges reported in the media?…
>>> Our operating cash flow provides for very solid dividend coverage. I don’t know if that’s ever been called into question before. <<<
>>> We don’t see ourselves as competing with a Google or Amazon. In fact, everyone is benefiting from the growth in … cloud whether Google builds its own data centers or whether [people] choose to outsource their facility with Digital Realty,” he said. “We have one of the strongest balance sheets in the real estate industry and we’re providing a very strong dividend coverage and consistent earnings growth over the year. We expect that to continue. <<<
That’s it!…that is 100% of the $DLR CEO quotes contained in the brief WSJ report of their telephone interview published on May 9th, the day following the charges made by Highfields. Nothing from $DLR since--not a word, nada, zilch, complete silence!
So why is $DLR’s silence important to shareholders?
Before Highlands accused DLR of various accounting deficiencies at the Sohn Conference, $DLR opened at $68.87, and advanced by $0.43 to $69.30. When Highlands spoke $DLR declined sharply, closing up only 15 cents...and has continued to decline, and decline more:
May 8th: Close $69.02, Change +$0.15
May 9th: Close $66.07, Change -$2.95
May 10th: Close $65.51, Change -$0.56
May 13th: Close $66.72, Change +$1.21
May 14th: Close $65.45, Change -$1.27
May 15th: Close $63.76, Change -$1.69
May 16th: Close $63.52, Change -$0.24
May 17th: Close $63.03, Change -$0.49
Cumulative 8 Day Change = -$5.99 (-8.7%)
There are over 128 million shares outstanding. A $6 decline equals a $768 million haircut suffered by shareholders thus far. Had $DLR responded immediately and effectively, it would be reasonable to assume the damage would not be so great…maybe only quarter? Maybe a full recovery by this date?
Others are not concerned about $DLR’s silence, why should you be?
SA sends $DLR email to 1,338 members. It may be that others don’t care that the share price is declining, or why it is declining, or if it continues to decline. I care. If I am the ONLY concerned stockholder, that doesn’t lessen my concern. IMO, shareholders should have every expectation of a full $DLR rebuttal.
The Business Model Of The Dividend Growth Investor [View article]
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
The Business Model Of The Dividend Growth Investor [View article]
I have not noticed in any posts from either David in which they disputed my assertion with respect to earnings (perhaps you could help by identifying them for me).
Your challenge today (1:36pm) suggests a research project, and that will consume time. Therefore in the absence of confirmation here from others, I'll need to catch up to you in a future article, to which I will post details and links with respect to references to what 'you find hard to believe'.
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
I also want to emphasize (and you also referenced it), I have no position as to who is more correct--Highfields or DLR.
On a related topic (portfolio management), it occurs to me to ask: Do you really need to hold that stock to remind you of the potential pitfalls of investing? Is it possible you believe that stock is 'dead money'...and if so, have you considered that you might improve your portfolio by be taking your loss, and reinvesting in something that has greater probability of advancing?
Rich
The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
<<< richjoy403 - I will reach out to DLR's CEO for a Q&A next week...Let me know of any specific questions you (or others) have....I can't promise the interview but I will request one. Thanks, Brad <<<
F&G, I don't know of your corporate background, but I assure you my own strongly suggests the executives of both DLR and Highfields are very bright people able to both walk and chew gum.
Thus though DLR's top execs may be out of town most of the month, the staff members (the ones who actually prepare such detailed responses) could have/should have, spent a few days following the Sohn Conference on the 8th, preparing a detailed response...and that response could have been reviewed for approval by those top execs on the 10th, 11th, 12th, 13th, 14th, 15th, or 16th, and released--asssuming they have an intention to make a timely full and detailed response to stockholders, and other interested parties.
Or, in brief...I cannot accept your assumptions as a reasonable explanation for delaying their response to events of May 8th to next month!
Highfields Capital Is Wrong Because This Digital Cloud REIT Ain't Going Nowhere But Up [View article]
I actually did see the WSJ's brief May 9th article, which reads:
>>> Digital Realty DLR +0.44% Trust’s Chief Executive Michael Foust said Wednesday’s smack down on the datacenter REIT by Highfields Capital Management’s founder Jonathon Jacobson “was largely mischaracterizing and drawing inaccurate conclusions from our accounting and financial disclosures.”
Jacobson, who has a short position in Digital, said at Ira Sohn Investment Conference in New York that Digital Realty faces competition from Google and Amazon and that its spending is too high to maintain its dividend.
“Our operating cash flow provides for very solid dividend coverage. I don’t know if that’s ever been called into question before,” Foust said during a phone interview.
Foust also fought back against the idea that Google and Amazon were competitors.
“We don’t see ourselves as competing with a Google or Amazon. In fact, everyone is benefiting from the growth in … cloud whether Google builds its own data centers or whether [people] choose to outsource their facility with Digital Realty,” he said. “We have one of the strongest balance sheets in the real estate industry and we’re providing a very strong dividend coverage and consistent earnings growth over the year. We expect that to continue.”
Digital Realty’s stock closed down 4.3% Thursday. <<<
As you know, the Highfields accusuations also went beyond those mentioned in the article.
My observation is that Fousts telephone comments were a non-specific response, issued 8 days ago. DLR has had ample opportunity to a full response (not unlike LNCO's in-depth slides and commentary in response to the February allegations leveled in Barrons).
For clarity, I should add--I am NOT suggesting the Highfields allegations are correct (for example, it is notable their auditing firm has not qualified their opinion),. But I do find it reasonable to expect DLR management to owe the owners of the company (stockholders) a more detailed response than thus far provided...including responses to the detailed questions you asked.