Just last month (June 2018), AFIN published an “estimated per share” net asset value of $23.56. On July 29, shares of AFIN were trading at $14.80. That’s 40.8% less than what a broker sold it for, and 37.2% less than the company’s independent board last month said it was worth.
Bruce Kelly of InvestmentNews stated, How on earth is the listing of AFIN an ‘optimal result’ for its shareholders? To call it anything less than a disaster is a joke.
In June, VEREIT, the successor to the former real estate investment company American Realty Capital Partners Inc. set up by Nicholas Schorsch, paid Vanguard Group $90 million to settle a 2016 lawsuit. As reported by Joseph DiStefano in a philly.com article, “Vanguard sued after Schorsch admitted, in public disclosures filed with the Securities and Exchange Commission in 2014 and 2015, that company officials had exaggerated profits.”
According to Vanguard Group’s lawsuit, “the true primary purpose in Schorsch’s buying spree” was “to rob from shareholders and give to himself and his friends.” Additionally, the lawsuit claimed that Schorsch “transferred hundreds of millions of dollars to entities controlled by him and by other senior insiders” in 2013 and 2014.
According to Vanguard’s lawsuit and as reported by Joseph DiStefano in a philly.com article, Schorsch and his associates overexaggerated earnings in reports, “convincing Vanguard and other professional investors to buy the stock, after certifying the company had solid financial controls and honest financial reporting.”