You don’t see this headline every day: Voltari exiting mobile ads, entering real estate; shares +23.8%
Their SEC filing goes on to say that they are essentially firing the engineers and purchasing rental properties. This is an effort to preserve and maximize the shareholders’ capital. I wonder why the company did not just return capital to the shareholders and let them invest in themselves? After all, Voltari shareholders presumably invested in the company because they liked the mobile advertising business, no because they wanted to own office building in New Jersey.
The strategic shift is described as follows: “The Company intends to exit its mobile marketing and advertising business and enter into the business of acquiring, financing and leasing commercial real estate properties. The Company intends to lease such properties pursuant to so-called “double net” or “triple net” leases. As the Company executes its transformation plan, it intends to significantly reduce its workforce over the next several weeks, which process has begun.”
Perhaps the Board should be given some credit for seeking the best use of their shareholders’ capital and not just mindlessly pursuing a strategy which clearly wasn’t paying off. Perhaps the shareholders should evaluate their Board and management’s resume for the real estate investing skills and dump this stock on the bump if they don’t like what they see!
