On Friday, Melcor‘s new Melcor Real Estate Investment Trust posted its final prospectus. The REIT will yield 6.75%. It appears that this Initial Public Offer has successfully closed (has raised the money it was targeting). This created some transaction costs for Melcor and may mean that Melcor’s Q1 will not look that great. But Melcor has done this to benefit Melcor share owners and certainly if all goes according to plan, Melcor’s share price will benefit from this. I do not have any opinion on the REIT but I continue to like the Melcor shares.
Regarding Toll Brothers, I note a headline tonight that says: Home sales Begin to Slip as Buyer Demand Outpaces Supply. That does not exactly look like bad news for Toll Brothers.
Another headline tonight reports that News Corp will receive $139 million from its Directors and Officers insurance in regards to the phone hacking scandal. That is bizarre. It makes me wonder what companies are paying for directors insurance fees if these kind of payouts are possible. That’s not an expense item I have ever seen disclosed – with one exception. Berkshire Hathaway has disclosed that it pays zero for directors insurance because it does not provide any to its directors. If they mess up they are on their own. And I would bet that none of Berkshire Hathaway’s insurance companies are involved in paying out this money to News Corp. To be sure, they do offer that insurance but I suspect they know how to pick which companies to insure and were unlikely to have insured News Corp. And if they did they will have had the amount capped as they always do.