NEMnyWtch (< 20)

Bear huntin' - Grubb-Ellis

March 23, 2011 – Comments (1) | RELATED TICKERS: GRBEQ.PK

This is in response to that lovely article by Mr. Colin Peterson yesterday, bashing GBE, titled "Triple Bearish Whammy".  Here's my response to your article, and in all fairness, I am LONG this stock, which I have followed for years.  I'm an investor, not a short-sell trader.

Shot 1:  "The board decided not to declare it's 12% cumulitave dividend."  OK - not exactly a bullish signal Mr. Peterson, but come on - 12%, and given the long term headwinds in this industry, that's a shocker??  You even back me on this below.  Risk and return sir, so unruffle your fur and notice the word "cumulative".

Shot 2:  "extended the expiration for it's consent solicitation" followed by "The company had negative EBITDA in 2009 and 2010, so it is no wonder that they are deciding not to declare a dividend on the preferred stock."  My response to this is taken off the Q4 Earnings Conference Call where Ned Smith asks about this specifically, and the response from Mike Rispoli was that "we did not provide guidance - earnings guidance - for 2011.  I think the general comment was made that on a historical basis, this is a seasonal business with the first half of the year generally lower than the back half of the year.  But this was the extent of the guidance we provided..."

Shot 3 and the Bear goes down:  You quote the company has "engaged JMP Securities LLC on behalf of the company to explore strategic alternatives including a potential sale or merger of the company."  Maybe I just don't get it, but since when is a buy-out bearish???  Particularly an unsolicited one?  In addition, going back to the Q4 transcript, I will finish with another quote from Mr. Rispoli, "...the cash on the balance sheet plus the 6 million in proceeds is sufficient to run our business for 2011."

There are two star analysts covering this stock, you are not one of them.  In my opinion, you are trying to confuse the facts of a very complicated, multi-faceted business, to your benefit.  Notice this is the second GBE bashing article you have published lately.  Thanks for sharing, but I think we all get that you have a sell opinion on the stock.