Re: Dividend cut & special dividend
The path to $10:
- Selling remaining hard assets over time for near $7-8 per share.
- Reinvesting proceeds in digital at approx 17x earnings, which is equivalent to a 5-6% cap rate, close to the current dividend.
- Have the digital businesses grow earnings at the clip they've suggested (+10% per year).
- Raise significant 3rd party capital to do these deals, and charge this capital management fees.
- Don't cut regular dividend, use asset liquidation, 3rd party capital, and moderate leverage to grow the business. If the dividend is cut, especially before proof these digital acquisitions are working, the stock craters.
- Don't pay a special dividend if they need capital to grow.
- If management earns credibility, 3rd party capital is raised, earnings grow, eventually the market will notice and value the company in-line with peers, possibly $10 per share... in time.
I'm giving Ganzi the benefit of the doubt, seems to have a decent reputation within the digital industry. I'm thrilled TB is on his way out and new management is being layered in. That said, it's a leap of faith, good upside if it works, mushroom cloud if it doesn't.