Sell #1: Sold RNY
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.
10foot portfolio versus the index. True story.
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.
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