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Why Spirit Realty Capital is Down 48 Percent Thursday

In late afternoon trading Thursday, shares of Spirit Realty Capital, Inc (NYSE: SRC) are down nearly 48 percent but it’s not because of horrifically bad news.

The REIT merged with Cole Credit Property Trust II after gaining approval from stockholders on June 12, 2013. Thursday marked the first day that the REIT traded as a combined company.

Here’s why the stock is down today:

Spirit Realty Capital stockholders received a fixed exchange ratio of 1.9048 shares of common stock of the combined company for each share of Spirit Realty Capital common stock owned. Based on Spirit Realty Capital’s closing price of $18.55 per share on July 16, 2013, the inverse exchange ratio is valued at $9.74 per CCPT II share and reflects a positive cumulative total return for CCPT II stockholders.

In other words, just like a stock split, it was just an accounting adjustment.

The combined company now owns 1,900 properties in 48 states.

[stock-tools exchange="NYSE" symbol="SRC" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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