I understand what management......is saying but at some point you have to divorce their spin from the actual facts and see if the two tell the same tale.
1) I understand they think their assets are undervalued by 50% but is part of getting that 50% back cutting your distribution? RioCan, reported today and they have a higher AFFO payout than Dream. Will RioCan say they will attempt to unlock shareholder value by cutting its distribution by 33%? I know part of that 33% cut will possibly go toward the pool of cash intended to reduce debt and buy back shares. However, is all of that 80 million a year they are saving from the distribution cut necessary especially against the backdrop of 1.2 billion in asset sales and a new 800 million credit facility? The new payout ratio is 67%. Too low in my opinion if everything is as management says. BEI.UN's payout ratio is about the same and they just raised their distribution by 10% today. Boardwalk also announced a strategic initiative today to close the gap between shareprice and NAV and it sounds nothing like Dream's strategic initiative.
2) The large increase in credit facility to reduce debt when their net debt to gross book value is 48% doesn't seem to make sense against the backdrop a normal reit universe.
The only conclusion I can come up with is either management is (1) positioning itself for a transformational acquisition/merger or (2) they are weary of a steep market decline, or (3) there are skeletons in Dream's closets they are trying to mitigate.
Stock may move up tomorrow, may move down, I dont know. All I know is that today's narrative from management doesnt sound like the complete story. Looking forward to the CC tomorrow.
Personal disclosure: Dream is too small a position for me to complain about (1.24% of the portfolio), just offering my opinions.