posted for a kindred spirit
free stock charts from uk.advfn.com |
DLN is arguably the nearest listed alternative to GPE.
Unlike GPE, DLN has avoided a dilutive equity raise (thus far). |
I've updated the header. |
Right, does everything have a price..
I've bought a very small amount.
"..never again is
what you swore
the time before.."
Quality lyric, courtesy of Martin Gore. |
Nick, I traded GPE (and it's previously incarnation). |
@EI was catching up on updating my watching s/sht and had to do a double check that i had entered the right figure for the latest NAV when i saw how different it was. GPE never came close to be of interest although with the share price drop yield has crept up from near the bottom of the list but still well below my min 6% threshold. |
The point I attempted to make on the GPE equity raise, was timing.
GPE could have raised capital 2 years ago at a materially higher share price and encountered far less equity dilution,
or having waited, sold a couple of assets at a competitive price
to attract buyers.
From a couple of the comments I received,
this elluded certain posters.
F...knows why, as it's as obvious as snow. |
The extraordinary dilution to NAV now laid fully bare by the H1 update.
I'm tempted to post in stronger terms but will remain polite. |
I just happened to look at the DLN
and GPE share price and noticed your post.
I was deeply unhappy about the equity raise, as previously mentioned and from memory said GPE was no longer investable (for me).
So now, following a dramatic recent share price fall, you could perhaps make a speculative buy call, but I am not holding and do not intend to buy. |
Well essential investor. What do you think now? |
hindsight, I've removed the header info as it's no longer appropriate. |
Perhaps nitpicking, but then it's not the rights issue that's diluting the discount, it's the assets they're buying.
That would be the same, regardless of the means of funding. Funding via rights would seem to be at least as good as funding through selling existing assets at a discount. |
EI is correct, as the shares were trading at ~30% discount the right issue has diluted that discount, unless of course they can buy assets with the new cash at -30% which seems very unlikely |
Accept a price cut on selling 3 or 4 assets? Erm, wouldn't that reduce the NAV?Don't look at the share price, look at the total value of your holding (including the nil-paid rights shares). That hasn't been diminished by the rights issue. |
You don't have to take up your rights. If you understand rights issues (I suspect many people don't) you will know they don't really offer existing holders bargain shares. Exercising rights works out much the same as simply buying new shares in the market (apart from saving stamp duty and dealing costs).
You could sell the nil-paid shares, or simply let them lapse and receive lapsed rights proceeds.
If you want to retain the same investment as before you could tail swallow (sell enough nil-paid shares to cover the cost of exercising the remaining rights).
If you want to retain the same percentage holding in the company you will need to pay to exercise all your rights. Don't feel obliged to do this though. As I said earlier, unless you have a large holding with material voting rights I see nothing wrong with dilution. |
Why does a rights issue per se make GPE uninvestable?
Its not an emergency rights issue to raise cash to fend off creditors.
As I understand it, the purpose of this rights issue is to supply the management with new funds to buy and/or develop new properties.
It seems to me that either
a) you think the management know what they are doing, and will be good stewards of this extra cash, in which case you pay up for the extra shares, or
b) you think they don't know what they are doing in which case you sell up, or
c) you think they generally know what they are doing, but that this is a bad time to buy new commercial property in which case you also sell up. (and if its a bad time to buy new commercial property, then its probably also a bad time to hold existing commercial property too).
I'd assume that if you were invested before then you would be in camp a), and should pay up for the extra shares. |
Why on earth did they not just sell a couple of larger buildings at a discount and avoid a capital raise.
For me it's uninvestable. |
Rights issues are poorly understood. What's your problem with 'dilution'?
Holders are better off today than before the rights issue was announced.
The only reason I can see you might be concerned about dilution is if you have a significant stake with material voting influence (I very much doubt anyone here does). Otherwise, does it matter what your percentage holding in the company is?
The rights price is set according to the risk appetite of the underwriters. Otherwise, for a given fundraise, it doesn't matter what price it is to existing shareholders. |
Thx Sky, Only small here, will hold on for now . API already my largest reit built few weeks ago and started building ASLI but its run away now |
I see GPE has a "Sustainability and Social Impact Director"!
Frankly, says all you need to know about this lot.
Pack your bags hindsight; sell and switch into ASLI for a secure 18%+ GRY to redemption over 12-18months.
ASLI has joined API in wind-down mode. |
* uninvestable for me following today, |
Utterly appalling treatment of shareholders and shareholder value. That dilution should be wholly unacceptable. It will take years for GPE to make sufficient profit from acquisitions with the cash.
I suspect all about building up the size of the company so as to boost management fees.
Has to be a good short... |
Stunned by the equity raise and equally by the sanguine equity market reaction. This is decidedly off sny future buy list. |
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