But I digress.
THE HANDSOME MEN’S CLUB
When I wrote for New York Magazine, way back when (ATMs had not yet been invented much less credit default swaps), I did my best to alternate serious pieces – like one on ‘bank capital adequacy’ (we called it, ‘How Solid Are the Banks?’) – with more playful ones. (‘How Tall Is Robert Redford Really?’ was my favorite. You’d be surprised how hard it was to find out.)
Last August I offered this update:
There’s good news and bad news. The good news is that, if this deal is approved, our NRDC warrants get an extra three years to run, way out until October 23, 2014. Just in time for my 100th birthday! (I really have to change the photograph on this page.) The bad news is that the strike price at which they are exercisable will rise from $7.50 to $12 (though the price at which conversion can be forced will rise from $14.25 to $18.75). If you have no idea what I’m talking about, just as well. If you’d like a refresher, here‘s a recap of the various SPACs we have dabbled in as they looked 15 months ago. But if you do own the warrants, here’s the deal: The stock closed yesterday at $10.02. The warrants will now give you the right to buy it at $12 any time until October 23, 2014. If the stock should rise to, say, 60% in that time, to $16 (and assuming this deal is approved), the right to buy a $16 stock for just $12 would be worth approximately $4 – a nice gain on today’s 27-cent warrant price. But if the stock appreciated less than 20% – let alone fell – the warrants would expire worthless. And so, here in Casablanca, we wait. And wait. And wait.
☞ So here’s a further update: The deal did get done, I still haven’t changed the photo on this page, the stock and warrant symbols have changed to ROIC and ROICW (now known as Retail Opportunity Investments Corp.), the stock remains around $10 but the warrants are up four-fold, and a very smart real estate guy I know recently paid that much to buy some, $1.02, because he thinks the folks running ROIC are also very smart – and have $400 million in cash to play with, unburdened by any troubled real estate assets – and that with some not-too-crazy financing might assemble $1 billion or so in real estate at today’s distressed prices . . . so, who knows? The stock actually could be significantly higher by the time the warrants expire four and a half years from now, which could make for a further double or quadruple in the warrants.
This has released in me all the usual self-destructive psychological juices – my remorse over not having bought even more warrants at 27 cents (and not having more volubly urged you to do likewise) . . . my fear of hanging on only to see the stock never rise above $12 (if it even gets that high) and our quadruple morph into total loss . . . my irrational inability to buy more of something after it has quadrupled . . . my embarrassment over that irrationality . . . my dread at the prospect this rant may encourage you to pay $1 – albeit with money you can truly afford to lose – only to lose it, as I lost you money on FMD and WaMoops and several others. (Google puts! What was I thinking!) Indeed, it’s a wonder readers of this column have any money left that they can truly afford to lose.
In short: my smart friend’s casual remark that he had been buying ROIC warrants at $1.02 – while initially reaffirming – has thrown me into whatever would be the very manly (not to say hypermasculine) equivalent of ‘a tizzy.’ For now, my greed and fear have reached stalemate: holding on to my warrants for a big score (oink, oink), afraid to buy more (pi-kaw! pi-kaw!).
Oh. Redford’s ‘about five nine.’
Quote of the Day
The social safety net should be a trampoline, not a hammock.~Bill Weld
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