Franklin BSP Realty Trust (FBRT) Shareholders may have Claims
The White Law Group continues to investigate potential securities claims involving Franklin BSP Realty Trust Inc., (formerly known as Benefit Street Partners Realty Trust Inc.).
After Benefit Street Partners merged with Capstead Mortgage, the new combined company started trading under the ticker symbol FBRT, at the open of trading October 19, 2021. The stock closed on the first day of trading at $17.10 per share. According to Market Watch shares of FBRT closed yesterday at $13.27 per share.
According to a letter to shareholders, MacKenzie Capital Management, LP has launched a tender offer to purchase Franklin BSP Realty Trust Series F Shares for $10.25 per Share, explaining there is no need to wait until April 2022 to convert and sell your Shares. Shares of Benefit Street Partners were originally sold for $25.00 per share.
According to the letter, there is no assurance that the Series F will trade at the same price as today. Also FBRT’s share repurchase program has been terminated and the distribution reinvestment program was suspended.
Mackenzie notes in the letter that this is an opportunity to protect yourself against stock market volatility if you sell your shares through the tender offer, since it is possible that an “influx of sellers” could put “significant downward pressure” on Franklin BSP’s trading price once the Series F Preferred Stock converts to traded shares in April 2022.
How Does a Merger Affect Shareholders?
Companies often merge as part of a strategic effort to boost shareholder value, often by creating new business lines and/or gaining greater market share. However, the economic environment at the time of the merger, size of the companies and management of the merger process all play a part in future returns for shareholders.
Shareholders may experience a significant loss of voting power, and while the spike in trading volume tends to inflate share prices, if economic conditions are not favorable at the time of the merger, shareholders may see significant losses.
How to Recover Investment Losses
The trouble with non-traded REITs is that they are complex and inherently risky products. Lack of liquidity is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.
Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so may be held responsible for losses through FINRA arbitration.
If you have suffered losses investing in Franklin BSP Realty Trust (Benefit Street Partners Realty Trust), please contact The White Law Group at 888-637-5510 for a free consultation with a securities attorney.
To learn more about the firm’s investigation please see:
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on the firm, visit www.WhiteSecuritiesLaw.com.
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