Investors who purchased $104mm of Class A shares in GO Partners acquisition of 685 First Avenue now hold Go Residential REIT units worth only $39mm, a return of -62.1%.
Excellent write up full of documented facts! These Go guys and their new partner Tom are nothing but swindlers! This proves a lot about the Go group and their business plan to reap millions in incentive bonuses and through the shareholders under the bus and have a big smile on their face like that low life CEO had on his face during that pathetic interview! He came across as a con man which he obviously is ! This is one shady transaction by HR which after research isn’t surprising! These groups are treating this manipulation like it is a private company which it isn’t! If the securities commission doesn’t torpedo this deal and levy heavy fines with suspensions and more! They might as well consider themselves irrelevant and climb back under their rock! I will be voting NO when I get a chance! Wonder how they are spending those last distributions they are not paying the shareholder? Probably some executive lunches with their buddies making their next plan!
Curious how you alude to the bankruptcy risk? It currently has investment grade rating and I get an average of somewhere in the ~$800k unit range if we look at it like that which is clearly well below half of private market Manhattan comps. I agree with you the group appears to be somewhat incompetent so they can overleverage themselves again but as of now I don't see bankruptcy risk or even close to it. Would love to see if you see something we don't see other then they are shady actors in terms of risk which could lead to bankruptcy?
TBH, I wanted to publish before the market opened and I couldn't think of a cat image so I went with this. I'll switch it if I get a brainstorm because it could be misleading for people who don't read the article.
Thanks for the response. I appreciate your inputs. I did add GO units in this range even though I think they are sketchy actors, the assets in the REIT are clearly trading cheap and insiders committed close to $60 million worth with the bought deal which includes the great Alfred Teo, an ex-convict. When people look at the chart and read the word "Mamdani" the average person will unquestionably think bankruptcy is a potential, if not likelihood. Feels like a complete capitulation event with max negative sentiment, I have got some reservations but feel like the risk-reward is good in this group. If the deal fails they will be a wounded animal. Maybe a take private potential? If the deal goes thru the REIT is de-risked as you point out in terms of leverage. Overall I hope it fails but believe GO is cheap here, for a reason.
It's cheap for a bunch of reasons, but it may be within management's capacity to change that.
IIRC, Gotlib said in a cc that his cost basis over $15. I don't trust anything he says, and the basis will be a soft number because he got free shares as equity comp, but it's possible that he's right. Maybe these guys are schemers, but maybe they are just making some rookie mistakes.
It would change my mind if they were able to sell any of the Solow assets around current carrying value. That would prove that there had been real value creation, or appreciation. Repeatedly issuing equity sends the opposite signal, the numbers can't be trusted.
GO REIT had a ROFR if GO Partners sold 265 East 65th (the 6th property in the Solow portfolio). Instead a 45% stake was bought by RXR at only 2% over the 2023 purchase price from Solow. Why didn't GO REIT take that? The building is completely in sync with the existing GO REIT portfolio which GO claims has enjoyed huge appreciation since 2022/23. Instead GO REIT is stretching farther and farther to buy new assets from third parties. What's the strategy?
I was just mimicking the text on the Monopoly game Chance card. It does look like GO strategy is to use as much leverage as possible. That always fails in the end.
Excellent write up full of documented facts! These Go guys and their new partner Tom are nothing but swindlers! This proves a lot about the Go group and their business plan to reap millions in incentive bonuses and through the shareholders under the bus and have a big smile on their face like that low life CEO had on his face during that pathetic interview! He came across as a con man which he obviously is ! This is one shady transaction by HR which after research isn’t surprising! These groups are treating this manipulation like it is a private company which it isn’t! If the securities commission doesn’t torpedo this deal and levy heavy fines with suspensions and more! They might as well consider themselves irrelevant and climb back under their rock! I will be voting NO when I get a chance! Wonder how they are spending those last distributions they are not paying the shareholder? Probably some executive lunches with their buddies making their next plan!
Curious how you alude to the bankruptcy risk? It currently has investment grade rating and I get an average of somewhere in the ~$800k unit range if we look at it like that which is clearly well below half of private market Manhattan comps. I agree with you the group appears to be somewhat incompetent so they can overleverage themselves again but as of now I don't see bankruptcy risk or even close to it. Would love to see if you see something we don't see other then they are shady actors in terms of risk which could lead to bankruptcy?
TBH, I wanted to publish before the market opened and I couldn't think of a cat image so I went with this. I'll switch it if I get a brainstorm because it could be misleading for people who don't read the article.
Fixed it 😺 That big pile of junk really is in the courtyard of The Copper.
Thanks for the response. I appreciate your inputs. I did add GO units in this range even though I think they are sketchy actors, the assets in the REIT are clearly trading cheap and insiders committed close to $60 million worth with the bought deal which includes the great Alfred Teo, an ex-convict. When people look at the chart and read the word "Mamdani" the average person will unquestionably think bankruptcy is a potential, if not likelihood. Feels like a complete capitulation event with max negative sentiment, I have got some reservations but feel like the risk-reward is good in this group. If the deal fails they will be a wounded animal. Maybe a take private potential? If the deal goes thru the REIT is de-risked as you point out in terms of leverage. Overall I hope it fails but believe GO is cheap here, for a reason.
It's cheap for a bunch of reasons, but it may be within management's capacity to change that.
IIRC, Gotlib said in a cc that his cost basis over $15. I don't trust anything he says, and the basis will be a soft number because he got free shares as equity comp, but it's possible that he's right. Maybe these guys are schemers, but maybe they are just making some rookie mistakes.
It would change my mind if they were able to sell any of the Solow assets around current carrying value. That would prove that there had been real value creation, or appreciation. Repeatedly issuing equity sends the opposite signal, the numbers can't be trusted.
GO REIT had a ROFR if GO Partners sold 265 East 65th (the 6th property in the Solow portfolio). Instead a 45% stake was bought by RXR at only 2% over the 2023 purchase price from Solow. Why didn't GO REIT take that? The building is completely in sync with the existing GO REIT portfolio which GO claims has enjoyed huge appreciation since 2022/23. Instead GO REIT is stretching farther and farther to buy new assets from third parties. What's the strategy?
I was just mimicking the text on the Monopoly game Chance card. It does look like GO strategy is to use as much leverage as possible. That always fails in the end.