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Senior Housing Properties Trust: Making Money Never Gets Old

A Special Situation Play

Senior Housing Properties Trust (NYSE: [[SNH]]), a health care REIT, announced on 3 February 2015 that it had decided to raise funds by selling 27 million shares at $22.20 apiece, with another $4.05 million authorized to be sold by the underwriters via a greenshoe option, which they promptly exercised. Right on cue, a selling frenzy sent the shares down over a dollar to a low of $22.12.

Existing shareholders undoubtedly were less than thrilled to see a secondary and the concomitant drop in the share price. After all, the common wisdom is that secondaries will "generally hurt a company's stock price" due to the dilutive effect on per-share earnings.

However, being a bit of a contrarian, I tend not to follow the common wisdom in my investing. Those who are looking for a special opportunity to pick up what could turn out to be a bargain… Read More …