This is a story about a shrewd property investor who paid 3.3 cents per share for properties worth 12 cents per share and then sold said shares for 0.9 cents.
I sold RNY Property Trust (ASX: RNY) at $0.09 per share on Friday 21/07, realising $124.55 after brokerage, for a loss of $410.90, or 76.4%. The reasons are straightforward and listed here.
Upon reflection, I think the company could go to zero. The reason it is showing net tangible assets of between 1 and 3 cents is because it didn’t market the ISB assets, only the ACORE ones. Although the ACORE assets are in a different part of the country, given how wrong I was about the market for them I certainly wouldn’t trust any of my estimates of the ISB assets.
With that in context I couldn’t sell fast enough which is why I broke my rule about not commenting within 7 days of a buy or a sell. These rules obviously need some work but are again a reminder not to follow me in or out of companies. In the future I may elect to sell first and write later. That seems the smart option at this point – still thinking it over.
A side note, don’t ever set your portfolio up so you can compare its value to the market every week. That way lies madness – I don’t know how the fund managers do it.
I saw that Aurora has subsequently requested a meeting of unitholders with a view to changing the management of RNY. I would ordinarily get behind that idea, although as they pointed out in their announcement, there are ‘poison pill’ agreements that could make it difficult. I am no longer a unitholder, but it could be interesting to watch from the sideline. I will try to remember to tune back in in a year or so to see how it went.
Edit: It was subsequently announced that Bridgeport, one of the ISB assets, sold for 10% above its listed price. From memory that’ll free up something like $1.5m before fees in cash for RNY unitholders, and the company’s mcap at the time I sold was just ~$2 million. From one of my fav Twitter accounts; here’s a video of the 10foot investor versus RNY: https://twitter.com/BagholderQuotes/status/893289791017689090
Subsequent edit: In their monthly update today (10 August) activist fund Sandon Capital revealed that they’d also done some dough on RNY, although it was a tiny position of their portfolio. It’s reassuring to know that even some of the pros got this one wrong.
Just reiterating I sold my 15,500 RNY units at $0.009 per share, netting $124.55 after brokerage for a loss of $401.90, or ~76%.
I don’t have any financial interest in RNY Property Trust or any other companies mentioned. This is a disclosure and not a recommendation.