tag:blogger.com,1999:blog-2080506270244832638.post51462291408661723..comments2024-03-28T07:17:13.573-05:00Comments on Clark Street Value: CIM Commercial Trust: Proxy Fight, Possible Liquidation or SaleMDChttp://www.blogger.com/profile/10679835609782815537noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-2080506270244832638.post-57368477348676442602021-09-16T14:04:35.093-05:002021-09-16T14:04:35.093-05:00Pretty incredible value destruction, but CIM is bu...Pretty incredible value destruction, but CIM is buying via one of their other funds:<br /><br />https://www.sec.gov/Archives/edgar/data/908311/000090831121000082/0000908311-21-000082-index.htm<br /><br />I'm bagholding a small position, at least until year end tax loss harvesting time.<br />MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-90252406455545872422021-09-16T13:38:11.081-05:002021-09-16T13:38:11.081-05:00Is some big lease going to be cancelled or somethi...Is some big lease going to be cancelled or something? What's with this stock?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-30825182651798680412021-08-04T21:19:28.866-05:002021-08-04T21:19:28.866-05:00I agree, I'm back in it a little higher than h...I agree, I'm back in it a little higher than here, but I have the proforma NAV at $17.45, even with the worst management and governance, 44% of NAV is too cheap. That's like BBX Capital or Biglari discounts, maybe appropriate, but the assets/business here are simpler and shouldn't get that kind of discount. With the rights offering, the balance sheet is also derisked significantly. But hard to what a catalyst is at this point, other than valuation.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-46970186777580344592021-08-04T16:23:16.048-05:002021-08-04T16:23:16.048-05:00At the current price of $7.71, the stock looks dir...At the current price of $7.71, the stock looks dirt cheap. Any thoughts?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-79663591905072702882021-06-10T13:49:07.921-05:002021-06-10T13:49:07.921-05:00I believe the voting is a little different, majori...I believe the voting is a little different, majority of shares versus votes cast sort of thing. All external REITs like Maryland law, but i don’t know the full legal background to thatMDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-14769038779842455982021-06-10T11:40:13.455-05:002021-06-10T11:40:13.455-05:00What is it about being a Maryland corporation that...What is it about being a Maryland corporation that makes it difficult to unseat an external manager?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-71802111510345030752021-06-10T09:22:13.218-05:002021-06-10T09:22:13.218-05:00Maybe they do, putting myself in CIM's shoes, ...Maybe they do, putting myself in CIM's shoes, clearly the management contract is more important to them than their investment in CMCT. So my guess is they poll investors they know are friendly to them, and do the math to see how much they need to oversubscribe to cement their control.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-12823106681724112292021-06-10T09:16:16.885-05:002021-06-10T09:16:16.885-05:00I imagine they will still raise close to the full ...I imagine they will still raise close to the full amount? I would expect the management team to fully participate in any oversubscription available and materially increase their ownership %. Agree that the rights are not transferable/tradeable so there will be a large amount of investors that do not participate, which will leave a large amount available for oversubscription.Charlie Anoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-24350852776988531622021-06-10T09:09:48.557-05:002021-06-10T09:09:48.557-05:00Yeah, pretty wild that they're restricted from...Yeah, pretty wild that they're restricted from participating. Makes me wonder how much CMCT is actually going to raise in the offering? Its not a tradeable right as far as I can tell, so I imagine quite a few investors won't participate. I'm still following closely, did sell my shares as I mentioned lower in the comments, hoping to be able to wait 31 days to get the tax loss, but things could get very interesting/cheap here before then. You also have the Russell rebalance as CMCT is getting booted.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-13182722156472315882021-06-10T09:06:54.657-05:002021-06-10T09:06:54.657-05:00https://shareholders.cimcommercial.com/static-file...https://shareholders.cimcommercial.com/static-files/273218ca-799b-463e-8beb-4b50ce6f045b<br /><br />It's even worse than I thought. Didn't realize activists would substantially be blocked from participating in the oversubscription given they already own 6% and there is a 6.25% ownership limitation. Will be interesting to see if they can hold up the rights offering based on the violation they identified. I do find myself more interested in buying back in with the stock down 10% today.. but difficult to know how this will shake out.Charlie Anoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-55825415975893678682021-06-07T10:58:28.121-05:002021-06-07T10:58:28.121-05:00Got it thanks.Got it thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-86959991327320031452021-06-07T10:47:43.159-05:002021-06-07T10:47:43.159-05:00The Russell 2000/3000 index updates its holdings e...The Russell 2000/3000 index updates its holdings every June, CMCT fell out of the index this year, so there might be some selling pressure later this month with index funds have to sell.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-54030733917325284702021-06-07T08:56:00.505-05:002021-06-07T08:56:00.505-05:00What is the Russell reconstitution? What is the Russell reconstitution? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-30437756709829391502021-06-04T09:40:57.883-05:002021-06-04T09:40:57.883-05:00I sold my shares today, had to sleep on it a few d...I sold my shares today, had to sleep on it a few days, but just don't want to put more capital into this vehicle given CIM's apparent anti-shareholder stance. Pretty terrible governance in my mind that the board would allow the management team to double the sharecount at 40% of NAV. We also have the Russell reconstitution coming up, CMCT might get knocked out, so we could see some forced selling around the reconstitution and the rights offering. Could be interesting again after those events.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-83404722524408877022021-06-01T14:23:17.923-05:002021-06-01T14:23:17.923-05:00Rights do provide some good trading opportunities,...Rights do provide some good trading opportunities, post rights stocks tend to go up after the selling pressure abates. But the value of the shares should only go up by the amount you oversubscribe to versus others who choose not to participate, their dilution is your gain.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-32712897206140210672021-06-01T14:06:12.322-05:002021-06-01T14:06:12.322-05:00I agree, I sold my shares. Wouldn't be surpris...I agree, I sold my shares. Wouldn't be surprised to see the shares drift lower if investors sell to raise cash to participate in the offering, and part of me thinks there could be an opportunity there. But I just think they've shown to be so value destructive it's not worth it to stick around and hope they change course while they continue to extract value. Also considered waiting around for activist response but doesn't seem like the market has been very responsive to their past letters and not sure what options they really have at this point other than to threaten litigation?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-63083323065138747892021-06-01T14:01:05.410-05:002021-06-01T14:01:05.410-05:00Sure, one would be diluted if they don't exerc...Sure, one would be diluted if they don't exercise the rights. But assuming that you do and activists should also, then the value of your shares goes up. You might be right that the intention behind rights offering might hint at entrenchment. I will wait and see. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-89719380051301725112021-06-01T12:40:59.217-05:002021-06-01T12:40:59.217-05:00Well said.
I haven't done anything yet with m...Well said.<br /><br />I haven't done anything yet with my shares, might wait for an activist to respond, but probably should sell now that the "management will cave and sell to protect their reputation" thesis is broken.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-64115060018083059272021-06-01T12:22:42.440-05:002021-06-01T12:22:42.440-05:00Yeah IMO the issue is that the structure they have...Yeah IMO the issue is that the structure they have set up confiscates value from common shareholders via the above market management fee/preferred equity. That structure is why the shares trade at such a large discount to NAV, in addition to management being incentivized to high-ball NAV to capture a larger management fee. They are now giving common shareholders a choice to either 1) put additional money into this structure where management will continue to extract value from you or 2) sit out on the rights offering and let yourself be diluted, resulting in additional value accruing to the management team via the oversubscription. This investment thesis relied upon breaking up this unfair management structure so that the value of the underlying assets would accrue to the common rather than management. Management is showing via this rights offering that they are willing to further entrench themselves and screw the common for their own benefit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-1654463221728363862021-06-01T12:16:08.571-05:002021-06-01T12:16:08.571-05:00Because $22 NAV (12/31/20 number) is based on the ...Because $22 NAV (12/31/20 number) is based on the current share count, by doubling the share count at $9.25, you dilute existing shares. The basic math is you average $22 and $9.25 since the raise is almost exactly the current share count. Rights offerings can be opportunities, but it usually revolves around an announced acquisition, the company needs to raise capital for a deal, fairest way can be to do a rights offering (if their are NOLs, a rights offering protects those), but here there's no announced deal, its just a capital raise and sort of a disguised way of management giving themselves more shares. You design it in a such a way that outsiders are unlikely to fully participate, CIM group will likely end up increasing their share of the company through the rights where if they just did a private secondary to themselves, it wouldn't be seen as fair (see the situation at NTP). But here they're out in the open about it, allowing others to participate, but knowing many won't.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-18891590420370180412021-06-01T11:28:39.939-05:002021-06-01T11:28:39.939-05:00What am I missing? If one were to buy into the ide...What am I missing? If one were to buy into the idea that NAV around $20, it would be a great opportunity to be able to buy additional shares at $9.25. The stock price should move up, shouldn't it? I am actually skeptical of the $20 figure. Weren't the shares trading in $14-$15 range before the pandemic. Pandemic induced work from home secular changes, definitely impaired commercial real-estate in the Bay Area. By how much is anybody's guess. Getting back to $14-$15 range again should be a challenge. How can they realize $20 value if they try to liquidate. So, if you assume $11-12 as fair value rather than $20, opportunity to buy at $9.25 may not be a bad thing. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-90868502227303569772021-06-01T10:54:22.496-05:002021-06-01T10:54:22.496-05:00I agree with the sentiment, pretty BS. Double the...I agree with the sentiment, pretty BS. Double the share count at 40% of NAV, increase their own management fees as a result under the guise that there a lot of acquisition opportunities out there, and also essentially backstop it by saying they'll oversubscribe to their rights, blocks the activists. Very disappointed, a bit surprised the shares aren't down more today, proforma NAV is probably $15-16, although its derisked from a balance sheet perspective.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-33974813848491016122021-06-01T09:33:30.017-05:002021-06-01T09:33:30.017-05:00https://shareholders.cimcommercial.com/static-file...https://shareholders.cimcommercial.com/static-files/8a77b201-f1c0-4c6a-bc74-238aebe19b7a<br /><br />They just announced intention to raise $137 million through a rights offering to shareholders as of June 11. What a joke. They are going to double the share count when you have unaddressed concerns from two activists groups and with the annual meeting inexplicably pushed back to Q4. They are straight up abusing shareholders. Would look for these activists to come back hard on them given there is not enough liquidity to get out and they are not going to want to double their positions in this piece of shit governance structure. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-10641306091805534592021-05-26T10:17:28.804-05:002021-05-26T10:17:28.804-05:00https://www.sec.gov/Archives/edgar/data/908311/000...https://www.sec.gov/Archives/edgar/data/908311/000089706921000238/cmw293.htm<br /><br />Lionbridge's proxy out, proposing Winthrop to take over the management. Some nightmares of a NYRT repeat in my head, but hopefully CIM is in the process of selling the company to avoid further reputational damage.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-606138998083451672021-05-26T02:58:38.422-05:002021-05-26T02:58:38.422-05:00I found the 12/31/19 estimated NAV source:
https:...I found the 12/31/19 estimated NAV source:<br /><br />https://shareholders.cimcommercial.com/static-files/f556de6c-7fc2-49cb-827c-c8e449651bf3Anonymousnoreply@blogger.com