RE:RE:BPY trades at 70% discount to NAV - is dividend safe?After my analysis of this company a couple weeks ago I pulled the trigger on 30k shares as I believed it was severly undervalued and I have done well on it.... that being said, I dont know if there would be a bid on it, but could BAM take it over? Sort of like Enbridge did with Enbridge income fund..
Vette08 wrote: Excellent video and thanks for sharing. Anyone who invests in the stock market should understand your analysis of the CF statement and the Balance Sheet.
My comments:
(1) I believe BAM would rather privatize rather cut the dividend on its "flagship" real estate asset. I would predict a short term suspension of the dividend rather than a cut. Will be interesting to see what happens. May 11 earnings release is a big one.
(2) BAM would likely privatize BPY if it truly has funding or lender issues and then work out any issues behind the curtain.
(3) You say that BAM would lose managment fees of $159M if it is privatized, however, in the big picture, 1/2 of those fees are effectively paid to BAM itself as they own over 50% of equity. And if BAM truly believes in the $30/Share NAV, then saving 50% of the cash on the annual dividend ($650 million per year) and buying shares/privatizing at a ridiculous discount to NAV makes a ton of sense (ie if they truly believe in their published NAV)
(4) I did not see your first video re governance, however, you need not look any further for governance issues than CEO Kingston recently selling $30 million in BAM stock.....he is NOT independent. Nothing wrong with this at all, but we as unitholders just need to understand where the CEO's true allegiance is.
My conclusion - EXPECT a privatization bid, especially if this Virus Panic becomes protracted.
Still long,
Vette