Arbor is repurchasing shares with house money. The firm’s loans are bust and they are sitting on many billions of losses. What are they doing?
Also, is their chairman who bought shares a week ahead of this going to have sec problems?
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I'm not intimately familiar with their financials, but share price is down ~20% since Aug and they have a bunch of cash on the balance sheet. A buyback sounds accretive to me as long as FFO stays positive.
I would view the management purchases as a positive thing - most companies have windows in which management can buy shares, so I wouldn't reach much into the timing other than it's probably during said window.
Arbor is not repurchasing shares. They announced a potential buyback authorization to goose the stock. There is a big difference!
So they pulled out?
An announced byback does not require any shares to be purchased. It is a decently common startegy to juice the stock price.
They never pulled in.
Just announcing authorization to execute a buyback doesn't mean you have to buy back a single share. Totally discretionary.
Happens day in and day out in markets - companies announce buybacks to try to prop up the stock even if they don't or can't buyback anything.
Sneaky sneaky! That feels like stock manipulation
https://viceroyresearch.org/wp-content/uploads/2023/12/Arbor-December-U…
Who is running the math on their interest and asset value tests? Shouldn’t they be failing?
While I agree with the overall sentiment of their conclusion, talk of 8% caps largely discredits their knowledge of the industry. Caps peaked at 6-6.5% and will likely settle a bit lower with this drop in rates. With that said, still a level that results in significant equity being wiped out.
8 caps will be generous by the end of next year on c deals.
The money for them is gone for a long, long time.
I have already looked at deals in this market at 10 caps.
If you look at the last 20 years, 8 caps can be very realistic
You show my an 8 cap in Phoenix and I'll show you my underwriting which has it at a 6% cap. We underwrite across 1/3rd of the country and have yet to see tax adjusted cap rates higher than 6.5% in any market. Demand is still out there buying sub-6% for the most part. This is specific to $20m+ transactions.
That sounds like a lot of time and a decent amount of conviction.
Markets move slowly but betting on the wrong side of the move will end in ruin. Breadth of geography generally pales in comparison to decades of market cycles.
Best of luck to you!
Tides? Is that you?
Godspeed if you're buying 70's garbage under 6.0% today.
Anyone think that maybe what's giving $ABR stock price some support is a lot of wanna-be boomer dividend investors that just purely screen stocks based on dividend yield? ABR hit 14%+ distribution yields when it hit its 52-week low and a lot of dividend investors bought in not even thinking about the possibility of a distribution cut (or perhaps even scrapping distributions altogether if they face solvency issues).
So many comments on SeekingAlpha all praise ABR for their high dividend to "fund their retirement" without even addressing the elephant in the room which is "why is their distribution yield so high? why is their distribution yield in distressed territory?"
I don't have much to add, just find it interesting to point out that sometimes the distribution yield offers support to stocks. If ABR cuts their distribution in the spring though then the stock will tank, just going to come down to whether they can keep paying their distributions without cutting.
Very good point. I see many posts on X suggesting it's a good stock to buy to get a strong dividend. If they ever need to cut the divy, I'd expect a lot of these investors to sell.
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