Wheeler Real Estate Investment Trust (WHLR) shares traded steady even as SLKW Investments issued a statement cautioning the management and recommended a dividend policy that is tied to actual cash flow as opposed to projections.
SLKW warned against hurrying acquisitions or due diligence to mitigate short-term diminution of AFFO [adjusted funds from operations] from additional preferred dividends.
It noted that additional preferred B dividends and new preferred D dividends will lead to short-term dilution in AFFO available to common shareholders. It pointed out that directors of the REIT owe a duty to both preferred and common holders.
“Wheeler is undervalued by the market based on the potential for growth of AFFO, and we hope that the board will further consider our recommendations so that this potential is no longer obscured,” the statement added.