ARCP now yields over 12% after this mornings gap.

1.80 billion in revenue is down 33% today on a 12 million adjustment.

i understand investors don't like anything accounting related but this is a triple net lease company not some tech company running out of cash.

I picked up shares $8.35, tell me why I made a mistake.

If it's yielding 12%, the market is telling you a dividend cut is likely.

They reported that their previously reported numbers were wrong (and fraudulently so). They fired their CFO.

Based on the press release this morning, the sell-off was a bit overdone.

Huge money is made and lost taking risks in spots like this, I hope it works out for you.

Downside risk is no joke on this one. A company in the midst of numerous big deals was knowingly lying about the most important metric in their industry. Yikes

The CFO resigned.

Complicated company but be wary of the dividend. High dividends are used by Reits to get people to buy their shares so they can issue more stock. Many of these so called reits have less revenues per share than a decade ago, yet they have built empires on printing stock and using federal reserve debt to buy properties with other peoples money. They get paid on the size of the company, not really on performance.

GAAP wasn't adjusted at all. Insiders were loading up earlier this year. Nick owns a boatload. Trades well below book from my work.

http://online.wsj.com/articles/ameri...013-1414588112

From Wall Street Journal on 10/29/14
One of the largest U.S. real-estate empires was battered Wednesday by its disclosure of an accounting mistake and subsequent coverup that forced the resignations of two top executives, slashed its flagship company’s stock-market value by 19% and sparked a regulatory probe.

American Realty Capital Properties Inc., the primary holding of property mogul Nicholas Schorsch, said in a securities filing that it asked its chief financial officer and chief accounting officer to resign after determining the company had overstated a measure of income in the first quarter, and that the executives chose not to correct the error in the second quarter. Shares of three other companies overseen by Mr. Schorsch also fell.

The Securities and Exchange Commission intends to launch an inquiry into the accounting irregularities, according to a person familiar with the matter.

The revelation is a black eye for Mr. Schorsch, chairman of American Realty Capital and one of the biggest real-estate investors in the U.S. The college dropout and son of a scrapyard owner in recent years embarked on an acquisition spree that fueled one of the swiftest rises in the real-estate world.

Dont disagree with you just pointing out the potential downside.

And brushing off accounting fraud because it is a non-GAAP number is lol, particularly when the particular number they fudged is the key metric for triple net REITs.

$8.35 is a nice price. If this affects their access to capital, it's a huge problem. If not, then yeah, you probably get back to $12-$13.

Legally, yes. For all practical purposes, no.

No one at that level ever really resigns immediately unless forced out.

Schorsch isn't exactly an saint. He is one of the wonderful people who made his money pushing non-tradable REITS.

"Asked" means "fired."

Did you include potential legal costs? What about fines? They're going to get sued. And the SEC is going to investigate them.

Fair point.
It is looking like a stupid and illegal decision but nothing that really inflated anything substantially. This of course could quickly change.
http://mobile.bloomberg.com/news/201...concealed.html

I have position in arcp. Not a good open this morning! Wondering to take loss or add to position

Honestly, I find this compelling:
http://seekingalpha.com/article/2622...tal-properties

I don't know anything about valuation of REITS, but if it was fairly valued before, this is a no brainer buy now. Markets hate the appearance of impropriety, especially when there are unanswered questions and headlines about criminal probes. But you're betting two sides here:

- That the fraud goes much deeper and you lose what, another 30-50%?
- The the cover up is about the limit of it, major steps will be taken to be and appear clean, and overall doesn't mean much for the long term valuation, in which case it is 30-50% undervalued.

I think the odds are stacked at least 8-1 in favor of the second possibility. It's a pretty clear play IMO.

Awesome thx for the insight!

????

Now the FBI is involved.

http://www.reuters.com/article/2014/...0IK2CR20141031

I think the news is more than priced in. I like this mornings price action, lets see how it closes.

Greatly underestimating the downside risk if any deeper fraud is found.

You don't need to know anything about the valuation, or REITS to analyze the probabilities.

Not serious fraud ----> way undervalued compared to its previous valuation, gain 30+%
Fraud ----> You'll lose 50%?

If P(not fraud or fraud fixed) >> P(serious fraud), you buy. It's a no brainer.

https://globenewswire.com/news-relea...SDAQ-ARCP.html

RCS Capital Corp. (NYSE: RCAP) announced on Monday morning that it will not pursue its plan to purchase Cole Capital from American Realty Capital Properties Inc. (NASDAQ: ARCP) for $700 million. This is probably more of a prudent move by RCS as American Realty is currently under investigation for accounting issues. Investors will be highly disappointed here as the company had previously maintained that it still expected the unit sale to occur.

I'd steer clear of ARCP, but then again I'm more of a conservative investor. As they say greater the risk the greater reward. However, there is good chance this stock continues to move down and stays there.

Important to note that ARCP and RCAP have the same chairman (ex CEO of ARCP). Lol corporate governance

Both spell CRAP!

...you made up your numbers out of thin air.