I have been scratching my head wondering how in the world REIT's rose so much today. Then I found this link.
I am sorry, but by diluting shares, that causes a stock to go up over 25%???? Who is kidding who. Kimco was on its way to bankruptcy when it pulled this rabbit out of the hat. Kimco sold off over 90M shares meaning it basically printed up 90M more common shares on top of its current 271M common shares. Thats right. It went from 271M common shares to over 360M shares in one day. AND THE STOCK PRICE SKYROCKETTED???? SAY WHAT???? A 33% DILUTION OF SHARES???
Go figure. Other REIT's such as SPG have also done this recently. The idea is to raise capital from the private investor in order to pay of massive amounts of debt in order to boost private share equity while diluting common shares. Yet, for some reason KIM goes up 25%.
Another fact. KIM's debt is $4.5B. That's B for billion. The net proceeds from todays 33% dilution of their common shares raised about $717M to pay off debt. That means they still have a debt of $3.8b after the 33% dilution of common stock equity.
Now, you tell me, WTF????
This is why SRS took a dive today. It makes no sense at all how a stock goes up 25% after a 33% dilution of their shares. This is pure and utter manipulation. All the execs are doing is raising cash so they can cash out before the company goes bankrupt.
Now PAY ATTENTION! Keep in mind these shares were offered at $7.10 a share. 90M shares at $7.10. And then the stock shot up to $9.40. That means these investment firms somehow got their hands on these shares at $7.10 and turned around and sold them for over $9 a share to some suckers out there.
This my friends is a true ponzi scheme. Make no mistake. Print up more shares to make cash which does not come close to handling the overwhelming debt. Watch for these REIT's to be on an episode of American Greed coming to a television screen near you.
I am now quite confident in my SRS shares once again.