Two Investors Now Own 13% of BEE
With the recent SEC filing by the Vector Group we now know that Vector and Bill Gate's Cascade Investment Company own just over 13% of Strategic Hotels and Resorts. With the stock hovering around $1 and everyone assuming that their debt is greater than the value of their luxury hotels, the addition of another activist investor like Vector is promising. I've been burned too many times by cheap stocks in the dollar range, and never really thought I'd see REITs at such low levels. Despite my historical experiences, BEE might yet be a winner, but the gamble still feels risky.
I see several potential outcomes for Strategic Hotels. (1) The economy doesn’t improve and BEE is forced to sale assets at a discount or simply declares bankruptcy. (2) Economy improves, hotel bookings rise, and BEE soars. (3) Large investors take the company private in the $3 – $4 dollar range.
I’m fine with either (2) or (3). My preference would be (2).
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Jul.23.2009. 22:02
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