Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend -- Ignore unavailable to you. Want to Upgrade?

To: Jera Poole who wrote (1780)	2/24/2000 8:37:00 PM
From: Richard Barron	Read Replies (1) \| Respond to of 2561

Jera, I would be concerned as GHV broke below the level of 2. It then broke below 1-1/2. The players likely know that GHV is in trouble. Unless GHV gets above and stays above 2, I wouldn't add to a position. If you are establishing a new position, I suggest 1/5 of a position now, and 1/5 every 3 months if GHV is still trading above 1, or ETT finds new tenants. Even though ETT has covered their debt refinancing for another year, the street is going to punish them if GHV is in jeopardy. I would suggest ETT sell any nursing home that is near book value, and buy back the stock, eliminating the need to pay the 24% dividend. They could pay down the loan also, but I'd rather see the # of shares dwindle. If they could manage to sell 10% of the properties they could cut out almost 1/4 of the dividend obligations. Richard p.s. The properties are probably worth a lot more than the current value, even in distress. If there is another push to bail out nursing home operators by congress, then we could be past the worst of this around July of this year. Note: for a possible contrary indicator, today IBD(Investors Business Daily) devoted the bottom right corner to :CHEAP STOCKS, You get what you pay for, which listed the non-bankrupt nursing home stocks that lost between 15-90% last year. If congress doesn't help the nursing home operators out enough, it may take 2-5 more years to bottom out.

To: Jera Poole who wrote (1780)	3/1/2000 1:17:00 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 2561

Jera re ETT: GHV clearly has problems, though the ETT folks say they don't expect a filing and in April the 20% increase in Medicare reimbursements should help. The key to this: what might GHV BK filing mean for ETT? ETT's leases and secured mortgages should be at the top of the food chain - above unsecured senior and subordinated debt. GHV would have a choice to accept or reject ETT leases [as well as other contracts] Only if GHV was going to liquidate would they not accept the leases - no indication of that. So could GHV play hardball with the negotiations and maybe reduce the rents...sure but to what end? GHV's leases only amount to 1.6% of revenues [Sounds crazy but look at the 10/99 Q]. So screwing ETT doesn't really move the ball for GHV [One reason I'm not sweating the common CB - conflict of interest]. Does GHV have enough cash flow to cover ETT lease & mortgage payments, if BK relieved them of other unsecured interest? Looks like it to me. Used to be BK was like sell'em out on the court house steps, now it's more like a trip to a health spa..companies come out lean, mean, tanned, rested and ready to be better competitors with a lot of weighty baggage written off & left behind. And beyond the top of the food chain, there's the underlying property as additional margin of safety. None of this should be construed as implying ETT isn't high risk - it clearly is. But I suspect the rewards strongly outweigh the risk. Disclosure: I'm long ETT, am not a bankruptcy expert or attorney - just read up on it a bit in anticipation of what could occur. bob