DIGITAL REALTY TRUST INC DLR S
May 04, 2010 - 10:29am EST by
mojoris
2010 2011
Price: 60.00 EPS $1.57 $1.89
Shares Out. (in M): 78 P/E 38x 32x
Market Cap (in $M): 4,600 P/FCF 32x 21x
Net Debt (in $M): 2,100 EBIT 179 278
TEV ($): 7,500 TEV/EBIT 42x 27x
Borrow Cost: NA

Sign up for free guest access to view investment idea with a 45 days delay.

  • REIT
  • Insider selling
 

Description

Recommendation 

Digital Realty Trust (DLR) is a fast growing REIT with a niche focus on the attractive datacenter development space.  Since its IPO, the Company has demonstrated strong growth by consistently increasing its FFO year-over-year and raising its dividend on eight occasions to reward shareholders.  DLR is also uniquely positioned to benefit from the next M&A cycle...we recommend DLR as a short.

Closer examination of the financials, insider selling practices, certain related-party contractual arrangements, and pattern of dilutive equity capital raises (effectively, looking beyond the surface), will highlight why DLR is a compelling short.  Below are the key catalysts that will cause the stock to reach its appropriate fair value of $38:

  • Focus by investment community on the non-arms length transactions between DLR, GI Partners, and TelX
  • Recognition by shareholder base of continued and consistent equity raises and dilution
  • Examination and discovery of affiliations of certain member of the board of directors
  • Inability to raise additional capital to fund dividend payments and growth
  • Termination of leases entered into during the bull market (2006-2008)
  • Continued shift and acceleration of cloud computing leading to a broken growth story
Thesis Summary
 
DLR has positioned itself as a growth company, but the growth is entirely tied to a strong and robust capital market environment. The company has a consistent record of share dilution through common stock and preferred stock offerings to fund both its growth strategy and its dividend payout.  Without consistent capital market access, the dividend is unsustainable.  If valued as a free cash flow story, the valuation range is materially less than the current equity value.  In addition, there are several related-party red flags that, when taken together, should give investors further pause when evaluating the risk associated with the business.  These include:
  • Massive insider selling (insiders have rarely purchased any stock, dating back to the IPO)
  • DLR's sixth largest customer, TelX, is controlled by a private investment vehicle owned by the company's CEO and Chairman.
  • "Independent" board members work for companies that have been accused of fraud over the last few years
  • Sell-side has turned a blind-eye on the fundamentals and is enamored by a "growth" REIT that pays a dividend (currently yielding 3.2%)
  • Complex and questionable accounting that has confused the Street
DLR has a consistent strategy of raising capital at the cost of equity shareholders.  The table below depicts the consistent record of capital raises that have supported DLR's "growth" since being a public company in 2004.
  % Share % Debt % Asset
  Increase Increase Increase
2005 28% 40% 50.9%
2006 103% 49% 43.0%
2007 18% 20% 28.5%
2008 12% -6% 16.7%
2009 -97% 19% 0.0%
 
This pattern of regular equity capital raises has raised some concerns by investors with management often fielding questions on the timing of equity raises, particularly in the context of no major acquisition announcement.  To avoid this past scrutiny, on DLR's first quarter 2010 earnings release, management disclosed its new strategy to raise capital: the less obvious ATM strategy.  The ATM disclosure was made after management had already issued $55 million of common stock (or approximately 1.3% of the shares outstanding).  Given the large authorization amount ($400 million), management apparently anticipates much larger and more significant equity raises through its newly authorized ATM program.  See the below language from the release:
 
"In December 2009 and January 2010, the Company entered into equity distribution agreements referred to as its At-the-Market equity distribution program under which it can, subject to market conditions, issue and sell up to $400.0 million of its common stock. For the quarter ended March 31, 2010, the Company generated net proceeds of approximately $54.8 million after payment of approximately $0.8 million of commissions to the sales agents from the issuance of approximately 1.1 million shares of common stock at an average price of $50.56 per share."
 
Business Description:
DLR owns, acquires, develops, redevelops and manages technology-related real estate. The Company provides "Turn-Key Datacenter(TM) and Powered Base Building(TM) datacenter solutions for domestic and international tenants across a variety of industry verticals ranging from information technology and internet enterprises, to manufacturing and financial services. DLR has 81 properties and 14.4 million of rentable square feet.
 
History:
DLR priced its initial public offering on October 28, 2004 at $12.00 per share.  The Company raised approximately $257 million in gross proceeds through the sale of 21.4 million shares of common stock. The IPO was co-led by Citigroup and Merrill Lynch.
 
Sustainable Common Stock Dividend Growth (source DLR website):
DLR has a record of sustainable dividend growth, as outlined in the table below:
 

Date Declared

Record Date

Payment Date

Amount per share

April 27, 2010
February 24, 2010
October 27, 2009
July 28, 2009
April 28, 2009
February 25, 2009

June 15, 2010
March 15, 2010
December 15, 2009
September 15, 2009
June 15, 2009
March 16, 2009

June 30, 2010
March 31, 2010
January 15, 2010
September 30, 2009
June 30, 2009
March 31, 2009

$0.48
$0.48
$0.45
$0.36
$0.33
$0.33

November 4, 2008

December 15, 2008

January 7, 2009

$0.33

August 4, 2008

September 15, 2008

September 30, 2008

$0.31

May 6, 2008

June 16, 2008

June 30, 2008

$0.31

February 25, 2008

March 17, 2008

March 31, 2008

$0.31

November 1, 2007

December 31, 2007

January 14, 2008

$0.31

August 1, 2007

September 17, 2007

October 1, 2007

$0.28625

May 2, 2007

June 15, 2007

July 2, 2007

$0.28625

February 16, 2007

March 15, 2007

April 2, 2007

$0.28625

November 1, 2006

December 29, 2006

January 15, 2007

$0.28625

July 31, 2006

September 15, 2006

October 2, 2006

$0.26500

May 1, 2006

June 15, 2006

June 30, 2006

$0.26500

February 27, 2006

March 15, 2006

March 31, 2006

$0.26500

November 8, 2005

December 30, 2005

January 13, 2006

$0.26500

August 9, 2005

September 15, 2005

September 30, 2005

$0.243750

May 16, 2005

June 15, 2005

June 30, 2005

$0.243750

February 14, 2005

March 15, 2005

March 31, 2005

$0.243750

December 14, 2004

December 31, 2004

January 14, 2005

$0.156318

 
However, company filings indicate that DLR may start to pay all or part of it's dividend in stock, rather than cash.  We have seen REITS begin to issue stock dividends, especially in cases where payout ratios are high.  DLR's dividend yield is only 3.25% and an announcement of a dividend payment with a stock component would be a significant negative surprise.

Sell-side analysts like the DLR story:

DLR is rated the equivalent of a buy at nine of the twelve brokerage firms that cover the company.  The chart below highlights the overall positive sentiment form the sell-side:

    Broker   Rating   PT  
1   BAC-ML   Buy   $60  
2   Citi   Hold   $52  
3   Credit Suisse   Outperform   $51  
4   Deutsche Bank   Buy   $58  
5   ISI Group   Buy   $66  
6   JMP Securities   Market outperform   $57  
7   Oppenheimer   Market perform      
8   Raymond James   Strong buy   $57  
9   RBC Capital   Outperform   $67  
10   Robert Baird   Outperform   $55  
11   Stifel Nicolaus   Buy   $70  
12   UBS   Neutral   $56  
The sell-side cannot get enough of DLR.  Why would they with DLR tapping the capital markets (while generating investment banking fees for the sell-side) on a consistent basis? 

Sell-Side Commentary Highlights:

Credit Suisse: "Digital has taken a number of steps to bolster its liquidity position, including $198 million of secured financing, the closing of a $200 million credit facility, and a $25 million increase in the commitments under its existing credit facility."

JMP Securities: "Peer multiples are within a broad range, but DLR is certainly near the high end. We believe that some premium for DLR is justified given stronger supply/demand fundamentals than the average REIT."

Raymond James: "We expect the company's focus on the data center market to continue to drive outsized returns for the near to intermediate term as supply appears in check and the strong demand appears essentially unaffected by the current economic slowdown"

Robert Baird: "We have revised our estimates in light of DLR's conservative '09 outlook and an anticipated economic slowdown that may marginally impact capital investment. Nonetheless, we believe DLR offers one of the few REIT growth stories in our group at an attractive valuation."

Oddly enough, a sell-side analyst at Piper Jaffray who presented management with some of the more difficult questions on TelX, GI Partners, and insider selling was shortly thereafter dismissed from Piper Jaffray.  Credit Suisse also dismissed the analyst who covered this stock in early 2009 and was starting to examine the GI Partners relationship and history.

Massive Equity Dilution:

Since the IPO, DLR has increased its share count from 20 million shares to 78 million shares as the end of 2009. Additionally, the company has tapped the preferred stock market to further fund its operations and dividend.  The table below outlines the size of the combined equity and preferred offerings since the IPO.

Year                            Total Issuance of Preferred and Common Stock

2005                            $271 million

2006                            $378 million

2007                            $333 million   

2008                            $555 million

2009                            $85 million

2010                            $55 million (ATM raise)

Debt issuance net of repayments ($):

DLR depends on capital markets. The table below is illustrates the company's waning ability to issue debt.

Year                            Total Issuance Net of Repayments

2005                            $210 million   

2006                            $370 million   

2007                            $222 million   

2008(q3)                      ($79) million Partial debt pay down was funded through highly dilutive $221 million common plus $335 million preferred raise during 2008)

2009                            $260 million

Questionable Credibility of Independent Director:

 An independent DLR director works for a company named in a fraud lawsuit:

 TAMPA -- A locally headquartered telecom company seems to have its wires crossed with its landlords.

In Florida, Switch & Data Facilities Co. is facing a lawsuit accusing the company of breaching contracts and committing fraud by using undercapitalized shell companies to secure a 10-year lease worth $6 million.

DLR's website does not indicate that this director is on the board of Switch & Data, a customer of DLR.  We find it strange that the relationship is not disclosed on DLR's profile of the director.

Complicated Unexplained Accounting: 

On previous earnings calls, management has been less than clear on what appear to be simple explanations for how DLR accounts for items in its financial statements.  Responses such as "that would be very difficult" and "it's a very complex model" from the CFO do not provide much comfort.  Below is an odd exchange between Bill Stein, CFO of DLR, and a sell-side analyst:

<Q - Omotayo Okusanya>: Okay. That's helpful. And then how do I go about thinking of your taxable earnings

versus FFO in '09? Is there a way you can give us a sense of what the two, what the big difference is between the two

numbers, so at least from that end we have a better sense of how to model dividends?

<A - A. William Stein>: That would be very difficult.

<Q - Omotayo Okusanya>: Then I would like one or two major line items that are just helpful in regards to

differences that recur every quarter?

<A - A. William Stein>: Well, I mean, it's basically depreciation.

<Q - Omotayo Okusanya>: Okay. So - so that's helpful.

<A - A. William Stein>: It's a very complex model, I will tell you that.

Furthermore, when we have noted to analysts the nature of the lease with Telx (long maturity, high margin, etc.), analysts have called management to follow-up and management has failed to disclose that Telx is a related party through the GI Partners connection.  The lack of disclosure to the analyst community is astonishing given the significance of the customer (6thlargest).  See the analysis below regarding Telx/GI Partners relationship.

Credentialed Management Team (source DLR website):
As our Chairman, Rick Magnuson is responsible for defining Digital Realty's overall business strategy. In 2001, Mr. Magnuson co-founded the advisor to GI Partners and has served as its Chief Executive Officer since that time. Since November 1999, Mr. Magnuson has also served as Executive Managing Director of CB Richard Ellis Investors, where he formed, and continues to manage, the investments and activities of GI Partners. From 1994 through 1999, Mr. Magnuson held various positions with Nomura Securities, most recently as Deputy Managing Director of Nomura's London-based Principal Finance Group. Prior to that, he was a Director in the Investment Banking division of Merrill Lynch, and before that was with Digital Research, the company that developed the personal computer operating system. Mr. Magnuson also founded, and later sold, InterActive Software, a software services company. He serves as a director for NYSE-listed Glenborough Realty Trust and for two private companies. Mr. Magnuson holds a B.A. degree from Dartmouth College and an M.B.A. from Stanford University Graduate School of Business.
Mr. Foust has served as Chief Executive Officer and as a Director of Digital Realty Trust (NYSE: DLR) since its IPO in October 2004. Mike co-founded the predecessor private equity fund, GI Partners, in 2001 and served as its Managing Director since that time.During his tenure at GI Partners, Mr. Foust directed the acquisition of technology-related properties and portfolio management. He has over 23 years of experience. Mr. Foust was a Senior Vice President at CB Richard Ellis, where he managed regional asset services operations, and he was a Senior Director at CB Richard Ellis Investors. Prior to CBRE, Mr. Foust held senior portfolio management and investment positions at UBS Asset Management, Karsten Realty Advisors and Trammell Crow Company. Prior to his real estate career, he participated in the origination of two related international telecom companies operating in New York and London. Mr. Foust received an AB degree magna cum laude from Harvard University and an MBA from Harvard Business School.
Mr. Stein has served as CFO and CIO for Digital Realty Trust since July 2004. With more than 25 years experience, his previous positions include Co-Head of VentureBank@PNC and Media and Communications Finance and Managing Director at The PNC Financial Services Group; President/COO and EVP/CFO of TriNet Corporate Realty Trust, now part of Starwood Capital; and several senior financial and investment management positions at Westinghouse Electric, Westinghouse Financial Services, and Duquesne Light Company. In addition, Mr. Stein practiced law for eight years specializing in both litigation and securities and finance. Mr. Stein received an AB degree in Classics from Princeton University, a JD degree from the University of Pittsburgh, and an MBA degree with Distinction from Carnegie Mellon University.
Scott E. Peterson is Digital Realty Trust's Senior Vice President responsible for our acquisition activities. From 2002 until our initial public offering in October 2004, Mr. Peterson was a Managing Director of GI Partners where he was responsible for property acquisitions with an emphasis on technology-related properties. Mr. Peterson has more than 17 years of real estate experience and was most recently a Senior Vice President with GIC Real Estate, the real estate investment entity for the Government of Singapore Investment Corporation. Previously, Mr. Peterson was active in investments, development and asset management with LaSalle Partners, a real estate services company, and Trammell Crow Company, a real estate developer. Mr. Peterson received a B.A. degree and an M.B.A. from Northwestern University.
Chris J. Crosby has served as Senior Vice President of Corporate Development since August 2009. Prior to this role, he served and Senior Vice President Sales and Technical Services since October 2005. He joined Digital Realty Trust as Vice President of our sales and technical services activities at the completion of our initial public offering in October 2004. Since 2003, Mr. Crosby was Managing Director of Proferian, an operating partner of GI Partners.While at Proferian, Mr. Crosby was responsible for leasing and sales within the GI Partners portfolio with an emphasis on technology-related leasing including turn-key datacenter space. Mr. Crosby has more than 17 years of technology experience and was most recently a consultant for CRG West, an operating partner of The Carlyle Group, formed in 2001 to oversee and enhance strategic telecom assets managed by Carlyle Realty Group. Previously, Mr. Crosby was active in sales, sales management and product development at Nortel Networks, a leading supplier of products and services that support the Internet and other public and private data, voice and multimedia communications networks. Mr. Crosby received a B.S. degree from the University of Texas at Austin.
 
Appearance of a Shareholder-Friendly Corporate Governance:
  • Board members elected annually based on shareholder approval
  • Two-thirds of board members are independent directors
  • No stockholders rights plan
  • Separated the roles of Chairman and Chief Executive Officer

Management/Board Overlap and GI Partners - Conflict of Interest / Related Parties:

Michael Foust, CEO and director of DLR, co-founded the predecessor private equity fund GI Partners.

Rick Magnuson, Chairman of the board of DLR, co-founded GI Partners and is currently a managing director at GI Partners.

Scott Peterson, Sr VP of Acquisition Activities of DLR, was a managing director of GI Partners until 2004 (IPO of DLR).

James Trout, Sr VP of Portfolio and Technical Operations of DLR, was formerly a managing director of Proferian, an operating partner of GI Partners.

Disclosure on Potential Conflicts of Interest from 10-K:

DLR's counsel has clearly highlighted the risks of the DLR/TelX/GI Partners relationship. Below is the risk factor disclosure that clearly underscores the conflict of interest and the potential issues that could arise in the context of this relationship.

We may pursue less vigorous enforcement of terms of certain agreements because of conflicts of interest with GI Partners.GI Partners and its related fund, own a property on which we have a right of first offer. GI Partners Fund II, LLP, or GI Partners II, owns The tel(x) Group, an operator of "Meet-Me-Room" network interconnection facilities that leases 87,305 square feet from us under ten lease agreements. Richard Magnuson, the Chairman of our board of directors, is and will continue to be, the chief executive officer of the advisor to GI Partners and GI Partners II. In the future, we may enter into additional agreements with The tel(x) Group or other companies owned by GI Partners or GI Partners II or other GI Partners funds. We may choose not to enforce, or to enforce less vigorously, our rights under theses agreements because of our desire to maintain our ongoing relationship with GI Partners and Mr. Magnuson. 

We would think that there will not be a conflict of interest between DLR and GI Partners, given they are one and the same.

Sixth Largest Customer is controlled by GI Partners:
Telx Group: acquired by GI Partners on November 20, 2006. Six days later DLR signed agreements with Telx Group to lease 10 facilities in the US.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Tenant

  

Number
of
Locations

  

Total
Occupied
Square
Feet(1)

  

Percentage
of Net
Rentable
Square
Feet

 

 

Annualized
Rent(2)

  

Percentage
of
Annualized
Rent

 

 

Weighted
Average
Remaining
Lease
Term in
Months

1

  

Savvis Communications

  

18

  

1,868,799

  

14.9

 

$

48,792

  

9.8

 

112

2

  

Equinix Operating Company, Inc.

  

4

  

607,401

  

4.8

 

 

24,975

  

5.0

 

95

3

  

Qwest Communications International, Inc.

  

15

  

637,712

  

5.1

 

 

20,402

  

4.1

 

70

4

  

Facebook, Inc.

  

3

  

134,999

  

1.1

 

 

17,809

  

3.6

 

89

5

  

NTT Communications Company

  

4

  

295,339

  

2.3

 

 

16,820

  

3.4

 

63

6

  

TelX Group, Inc.

  

10

  

126,130

  

1.0

 

 

16,148

  

3.2

 

203

7

  

AT & T

  

14

  

553,828

  

4.4

 

 

14,533

  

2.9

 

106

8

  

JPMorgan Chase & Co.

  

3

  

149,935

  

1.2

 

 

14,437

  

2.9

 

120

9

  

Morgan Stanley

  

2

  

92,451

  

0.7

 

 

13,689

  

2.7

 

49

10

  

Level 3 Communications, LLC(3)

  

20

  

318,656

  

2.5

 

 

11,537

  

2.3

 

107

11

  

Yahoo! Inc.

  

2

  

110,847

  

0.9

 

 

9,763

  

1.9

 

94

12

  

eircom Limited

  

1

  

124,500

  

1.0

 

 

9,206

  

1.8

 

115

13

  

BT Americas, Inc.

  

3

  

47,286

  

0.4

 

 

8,981

  

1.8

 

96

14

  

Sprint Communications Co., LP

  

6

  

173,319

  

1.4

 

 

8,891

  

1.8

 

57

15

  

T-Systems North America, Inc.

  

3

  

82,610

  

0.7

 

 

8,826

  

1.8

 

48

16

  

Microsoft Corporation

  

2

  

313,485

  

2.5

 

 

8,178

  

1.6

 

67

17

  

TATA Communications (UK)

  

2

  

105,366

  

0.8

 

 

7,895

  

1.6

 

99

18

  

Carpathia Hosting

  

3

  

51,784

  

0.4

 

 

7,832

  

1.6

 

89

19

  

HSBC Bank PLC

  

1

  

113,464

  

0.9

 

 

7,316

  

1.5

 

168

20

  

Comverse Technology, Inc.

  

1

  

367,033

  

2.9

 

 

7,222

  

1.4

 

13

 

  

 

  

 

  

 

  

 

 

 

 

 

  

 

 

 

 

 

  

Total/Weighted Average

  

 

  

6,274,944

  

49.9

 

$

283,252

  

56.7

 

93

 

  

 

  

 

  

 

  

 

 

 

 

 

  

 

 

 

 

Telx Group, controlled by GI Partners, the company founded by DLR's CEO and Chairman, is the sixth largest customer of DLR.  In addition, it is important to note that Telx represents 1.0% of the percentage of net rentable square feet, but surprisingly represents 3.2% of the annualized rent. This would imply that this particular customer pays a higher price than other tenants.  By contrast, the top three customers have higher shares of net rentable square feet than of annualized rent.  One would think that, given Telx pays a higher price to lease space, that it would have a lease life that would be shorter in duration.  Surprisingly, Telx has the longest lease life of the top 20 customers at 17 years.

Valuation:
The valuation story for DLR is significantly less compelling when you consider the over-dependence on the capital markets.  Below is a DCF valuation analysis that supports that DLR is overvalued.  Our analysis takes a conservative approach to capital expenditures consistent with the sell-side sentiment that maintenance capex is a small portion of DLR's capital expenditures.  Additionally, this fundamental analysis does not account for the risks associated with DLR's insider transactions and less than arms-length transactions that are highlighted above.  We have not included a DCF excluding the Telx cash flows.
Digital Realty Trust DCF ($000's) 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E
Revenue $842,328 $995,142 $1,161,524 $1,351,856 $1,419,448 $1,490,421 $1,564,942 $1,643,189
 EBITDA  $543,844 $638,887 $737,857 $859,322 $919,475 $983,838 $1,052,707 $1,126,396
Depreciation and Amortization $211,200 $217,607 $224,210 $231,012 $247,183 $264,485 $282,999 $302,809
Other ($56,540) ($63,525) ($60,500) ($57,619) ($54,875) ($52,262) ($49,773) ($47,403)
Net Income $24,428 $357,755 $453,147 $570,691 $617,417 $667,090 $719,934 $776,183
                 
Adjustments:                 
(+) Depreciation & Amorization $211,200 $217,607 $224,210 $231,012 $247,183 $264,485 $282,999 $302,809
(+) Other ($56,540) ($63,525) ($60,500) ($57,619) ($54,875) ($52,262) ($49,773) ($47,403)
(-) Capital Expenditures ($40,107) ($46,300) ($52,576) ($58,607) ($65,161) ($44,931) ($47,177) ($49,536)
(-) Change in Working Capital $9,282 $11,066 $0 $0 $0 $0 $0 $0
 Unlevered Free Cash Flow        148,263       476,603       564,280       685,477       744,563       834,383       905,982       982,053
                 
                 
PV of Free Cash Flow 3,427,151   WACC 9.0%        
Terminal Value     4,505,584   Beta                  1.1    
PV of Terminal Value     2,463,443   10-year tsry rate   2.0%    
Enterprise Value     5,890,593   Equity Risk Premium   8.0%    
Cash & ST Investments         72,320   Avg cost of debt (pre tax)   5.8%    
Debt     2,372,110   Tax rate     0.0%    
Net debt (+ pref stock)     2,299,790   Perpetual Growth rate   2.0%    
Equity Value     3,590,803   Debt to Cap     30.0%    
      Terminal multiple   4.0x    
12-month share price target  $            38              
                 
So we have a stock with a fair value of $38.  The $38, however, does not account for the various red flags highlighted above.  When dealing with risks such as potential conflicts of interests/insider dealings, a normalized discount rate is inappropriate.  $38, then, represents a best case scenario.  The stock could trade materially lower when some of issues discussed above surface.

Risk to Impairment:

From an accounting perspective, impairment to DLR's asset basis is unlikely to be realized unless the potential cash flow is impaired and DLR's accounting firm then examines the underlying market value of the asset basis.  While currently a remote risk, if tenants default and DLR is unable to replace those tenants, the impairments to the underlying real estate properties will be material, particularly because DLR has acquired a significant portion of its real estate portfolio during the height of the real estate bubble (2005-2007).  See the table below.

Disclosure on Property from 10-K:

Year Ended December 31:

  

Properties
Acquired(1)

  

Net Rentable
Square Feet(2)

  

Square Feet of Space Held
for Redevelopment as of
December 31, 2009(3)

2002

  

5

  

1,125,292

  

19,890

2003

  

6

  

1,028,185

  

30,175

2004

  

10

  

2,587,455

  

99,014

2005

  

20

  

3,314,225

  

196,072

2006

  

16

  

2,104,209

  

117,389

2007

  

13

  

1,603,259

  

171,300

2008

  

5

  

209,928

  

354,320

2009

  

6

  

601,081

  

796,226

 

  

 

  

 

  

 

 

 

 

 

 

 

 

 

 

Market Concentration of Property from 10-K:

 

Metropolitan Market

  

Percentage of
12/31/09 total annualized rent(1)

 

Silicon Valley

  

17.9

Chicago

  

11.8

New York/New Jersey

  

10.3

Northern Virginia

  

9.8

Dallas

  

9.5

Phoenix

  

6.4

San Francisco

  

4.8

Los Angeles

  

4.5

London, England

  

4.2

Dublin, Ireland

  

3.9

Paris, France

  

3.2

Other

  

13.7

 

  

 

 

 

  

100.0

%

 

Systematic Insider Selling:

Since the IPO of DLR (2004), insiders have consistently sold their stock.  The selling is not limited to small regular blocks.  For example, the Chairman has sold large blocks of stock repeatedly, irrespective of price.  Below is a quick summary of insider selling over the last two years (and an itemized catalogue of insider activity is provided at the end of this write-up).

Total sales (last 2 years) 1,633,631
Shares outstanding 77,881,924
% of sales of s/o 2.1%
IPO shares (2004) 20,000,000
% of sales of s/o 8.2%

Summary:

At first blush, DLR appears to be a REIT with a focus (datacenters) that has shown strong relative growth and favorable near-term secular trends.  The investment story, however, raises concerns and in fact provides a compelling short thesis, after closer examination of the financials and relative valuation, management team, certain contractual arrangements, and pattern of dilutive capital raises.  Below are the key catalysts that will cause the stock to reach its appropriate fair value:

  • Focus by investment community on the non-arms length transactions between DLR, GI Partners, and TelX
  • Recognition by shareholder base of continued and consistent equity raises and dilution
  • Examination and discovery of affiliations of certain member of the board of directors
  • Inability to raise additional capital to fund dividend payments and growth
  • Termination of leases entered into during the bull market (2006-2008)
  • Continued shift and acceleration of cloud computing leading to a broken growth story

 

INSIDER TRANSACTIONS REPORTED - LAST TWO YEARS

 

Date

Insider

Shares

Type

Transaction

Value*

5-Apr-10

MILLS JOSHUA ANANDA
Officer

120

Direct

Option Exercise

N/A

5-Apr-10

MILLS JOSHUA ANANDA
Officer

120

Direct

Automatic Sale at $54.77 per share.

$6,572

1-Apr-10

MILLS JOSHUA ANANDA
Officer

97

Direct

Option Exercise

N/A

1-Apr-10

MILLS JOSHUA ANANDA
Officer

97

Direct

Automatic Sale at $54.44 per share.

$5,280

16-Mar-10

STEIN A WILLIAM
Officer

6,540

Direct

Option Exercise

N/A

16-Mar-10

STEIN A WILLIAM
Officer

6,540

Direct

Sale at $55.66 per share.

$364,016

16-Mar-10

FOUST MICHAEL F
Officer

9,000

Direct

Option Exercise

N/A

16-Mar-10

FOUST MICHAEL F
Officer

9,000

Direct

Sale at $55.70 per share.

$501,300

11-Mar-10

GEOGHEGAN BERNARD
Officer

675

Direct

Option Exercise at $41.73 per share.

$28,167

11-Mar-10

GEOGHEGAN BERNARD
Officer

4,264

Direct

Sale at $54.53 - $54.61 per share.

$233,0002

9-Mar-10

CROSBY CHRISTOPHER JAMES JR
Officer

15,800

Direct

Option Exercise at $20.37 - $41.73 per share.

N/A

9-Mar-10

CROSBY CHRISTOPHER JAMES JR
Officer

15,800

Direct

Sale at $55.14 - $55.39 per share.

$873,0002

9-Mar-10

EARLEY KATHLEEN
Director

1,000

Direct

Purchase at $55.45 per share.

$55,450

2-Mar-10

MILLS JOSHUA ANANDA
Officer

119

Direct

Option Exercise

N/A

2-Mar-10

MILLS JOSHUA ANANDA
Officer

119

Direct

Automatic Sale at $52.42 per share.

$6,237

1-Mar-10

MILLS JOSHUA ANANDA
Officer

97

Direct

Option Exercise

N/A

1-Mar-10

MILLS JOSHUA ANANDA
Officer

97

Direct

Automatic Sale at $51.65 per share.

$5,010

25-Feb-10

MILLS JOSHUA ANANDA
Officer

2,102

Direct

Option Exercise at $0 per share.

N/A

25-Feb-10

MILLS JOSHUA ANANDA
Officer

2,102

Direct

Automatic Sale at $50.22 per share.

$105,562

23-Feb-10

GEOGHEGAN BERNARD
Officer

9,252

Direct

Acquisition (Non Open Market) at $0 per share.

N/A

2-Feb-10

MILLS JOSHUA ANANDA
Officer

120

Direct

Option Exercise

N/A

2-Feb-10

MILLS JOSHUA ANANDA
Officer

120

Direct

Automatic Sale at $48.56 per share.

$5,827

1-Feb-10

MILLS JOSHUA ANANDA
Officer

96

Direct

Option Exercise

N/A

1-Feb-10

MILLS JOSHUA ANANDA
Officer

96

Direct

Automatic Sale at $48.35 per share.

$4,641

4-Jan-10

MILLS JOSHUA ANANDA
Officer

217

Direct

Option Exercise

N/A

4-Jan-10

MILLS JOSHUA ANANDA
Officer

217

Direct

Automatic Sale at $50.54 per share.

$10,967

28-Dec-09

JACOBS ELLEN A
Officer

3,933

Direct

Option Exercise

N/A

28-Dec-09

JACOBS ELLEN A
Officer

3,933

Direct

Automatic Sale at $50 per share.

$196,650

16-Dec-09

STEIN A WILLIAM
Officer

5,407

Direct

Option Exercise

N/A

16-Dec-09

STEIN A WILLIAM
Officer

5,407

Direct

Sale at $49.18 per share.

$265,916

14-Dec-09

CHAPMAN LAURENCE A
Director

716

Direct

Option Exercise

N/A

11-Dec-09

FOUST MICHAEL F
Officer

17,144

Direct

Option Exercise

N/A

11-Dec-09

FOUST MICHAEL F
Officer

3,900

Direct

Sale at $47.71 per share.

$186,069

4-Dec-09

JACOBS ELLEN A
Officer

67

Direct

Option Exercise

N/A

4-Dec-09

JACOBS ELLEN A
Officer

67

Direct

Automatic Sale at $50 per share.

$3,350

2-Dec-09

MILLS JOSHUA ANANDA
Officer

120

Direct

Option Exercise

N/A

2-Dec-09

MILLS JOSHUA ANANDA
Officer

120

Direct

Automatic Sale at $48.40 per share.

$5,808

1-Dec-09

MILLS JOSHUA ANANDA
Officer

97

Direct

Option Exercise

N/A

1-Dec-09

MILLS JOSHUA ANANDA
Officer

97

Direct

Automatic Sale at $48.49 per share.

$4,703

1-Dec-09

STEIN A WILLIAM
Officer

377

Direct

Option Exercise

N/A

1-Dec-09

STEIN A WILLIAM
Officer

377

Direct

Automatic Sale at $48.89 per share.

$18,431

13-Nov-09

CROSBY CHRISTOPHER JAMES JR
Officer

1,739

Direct

Disposition (Non Open Market) at $0 per share.

N/A

13-Nov-09

PETERSON SCOTT E
Officer

6,884

Direct

Option Exercise

N/A

13-Nov-09

PETERSON SCOTT E
Officer

6,884

Direct

Sale at $47.50 per share.

$326,990

13-Nov-09

MAGNUSON RICHARD A
Director

30,622

Direct

Option Exercise

N/A

13-Nov-09

MAGNUSON RICHARD A
Director

30,622

Direct

Sale at $47 per share.

$1,439,234

12-Nov-09

CROSBY CHRISTOPHER JAMES JR
Officer

5,000

Direct

Option Exercise at $20.37 per share.

$101,850

12-Nov-09

CROSBY CHRISTOPHER JAMES JR
Officer

11,952

Direct

Sale at $48 per share.

$573,696

12-Nov-09

MAGNUSON RICHARD A
Director

169,378

Direct

Option Exercise

N/A

12-Nov-09

MAGNUSON RICHARD A
Director

169,378

Direct

Sale at $47.44 per share.

$8,035,292

2-Nov-09

MILLS JOSHUA ANANDA
Officer

217

Direct

Option Exercise

N/A

2-Nov-09

MILLS JOSHUA ANANDA
Officer

217

Direct

Automatic Sale at $45.60 per share.

$9,895

2-Nov-09

STEIN A WILLIAM
Officer

377

Direct

Option Exercise

N/A

2-Nov-09

STEIN A WILLIAM
Officer

377

Direct

Automatic Sale at $45.60 per share.

$17,191

27-Oct-09

ZERBST ROBERT H
Director

N/A

Direct

Statement of Ownership

N/A

2-Oct-09

MILLS JOSHUA ANANDA
Officer

120

Direct

Option Exercise

N/A

2-Oct-09

MILLS JOSHUA ANANDA
Officer

120

Direct

Automatic Sale at $45 per share.

$5,400

1-Oct-09

MILLS JOSHUA ANANDA
Officer

97

Direct

Option Exercise

N/A

1-Oct-09

MILLS JOSHUA ANANDA
Officer

97

Direct

Automatic Sale at $45.82 per share.

$4,444

1-Oct-09

STEIN A WILLIAM
Officer

376

Direct

Option Exercise

N/A

1-Oct-09

STEIN A WILLIAM
Officer

376

Direct

Automatic Sale at $45.82 per share.

$17,228

22-Sep-09

MILLS JOSHUA ANANDA
Officer

119

Direct

Option Exercise

N/A

22-Sep-09

MILLS JOSHUA ANANDA
Officer

119

Direct

Automatic Sale at $45 per share.

$5,355

16-Sep-09

GEOGHEGAN BERNARD
Officer

3,149

Direct

Option Exercise at $41.73 per share.

$131,407

16-Sep-09

GEOGHEGAN BERNARD
Officer

4,650

Direct

Sale at $46.56 - $46.59 per share.

$217,0002

15-Sep-09

SHAM EDWARD F
Officer

3,444

Direct

Option Exercise

N/A

15-Sep-09

SHAM EDWARD F
Officer

3,444

Direct

Sale at $46.09 per share.

$158,733

8-Sep-09

STEIN A WILLIAM
Officer

376

Direct

Option Exercise

N/A

8-Sep-09

STEIN A WILLIAM
Officer

376

Direct

Automatic Sale at $44 per share.

$16,544

7-Aug-09

MILLS JOSHUA ANANDA
Officer

2,600

Direct

Option Exercise

N/A

7-Aug-09

MILLS JOSHUA ANANDA
Officer

2,600

Direct

Sale at $45.82 per share.

$119,132

7-Aug-09

FOUST MICHAEL F
Officer

31,316

Direct

Option Exercise at $12 per share.

$375,792

7-Aug-09

FOUST MICHAEL F
Officer

31,316

Direct

Sale at $44.55 per share.

$1,395,127

7-Aug-09

SHAM EDWARD F
Officer

7,576

Direct

Option Exercise

N/A

7-Aug-09

SHAM EDWARD F
Officer

7,576

Direct

Sale at $43.50 per share.

$329,556

5-Aug-09

STEIN A WILLIAM
Officer

37,813

Direct

Option Exercise at $12 per share.

$453,756

5-Aug-09

STEIN A WILLIAM
Officer

37,813

Direct

Automatic Sale at $44 per share.

$1,663,772

4-Aug-09

STEIN A WILLIAM
Officer

36,000

Direct

Option Exercise at $12 per share.

$432,000

4-Aug-09

STEIN A WILLIAM
Officer

36,000

Direct

Automatic Sale at $42 per share.

$1,512,000

30-Jul-09

STEIN A WILLIAM
Officer

36,000

Direct

Option Exercise at $12 per share.

$432,000

30-Jul-09

STEIN A WILLIAM
Officer

36,000

Direct

Sale at $40 per share.

$1,440,000

12-May-09

CROSBY CHRISTOPHER JAMES JR
Officer

24,319

Direct

Option Exercise at $12 - $20.37 per share.

N/A

12-May-09

CROSBY CHRISTOPHER JAMES JR
Officer

24,319

Direct

Sale at $36 per share.

$875,484

6-May-09

EARLEY KATHLEEN
Director

1,000

Direct

Purchase at $37.26 per share.

$37,260

28-Apr-09

CHAPMAN LAURENCE A
Director

1,000

Direct

Acquisition (Non Open Market) at $0 per share.

N/A

3-Apr-09

PETERSON SCOTT E
Officer

64,935

Direct

Option Exercise

N/A

3-Apr-09

PETERSON SCOTT E
Officer

64,935

Direct

Automatic Sale at $37 per share.

$2,402,595

2-Mar-09

GEOGHEGAN BERNARD
Officer

4,637

Direct

Acquisition (Non Open Market) at $0 per share.

N/A

2-Mar-09

TROUT JAMES
Officer

312

Direct

Option Exercise

N/A

2-Mar-09

TROUT JAMES
Officer

312

Direct

Automatic Sale at $29.17 per share.

$9,101

25-Feb-09

TROUT JAMES
Officer

1,335

Direct

Option Exercise

N/A

25-Feb-09

TROUT JAMES
Officer

1,335

Direct

Automatic Sale at $28.35 per share.

$37,847

24-Feb-09

GEOGHEGAN BERNARD
Officer

4,173

Direct

Acquisition (Non Open Market) at $0 per share.

N/A

2-Feb-09

TROUT JAMES
Officer

313

Direct

Option Exercise

N/A

2-Feb-09

TROUT JAMES
Officer

313

Direct

Automatic Sale at $31.15 per share.

$9,749

28-Jan-09

MILLS JOSHUA ANANDA
Officer

5,396

Direct

Option Exercise

N/A

28-Jan-09

MILLS JOSHUA ANANDA
Officer

5,396

Direct

Automatic Sale at $34 per share.

$183,464

28-Jan-09

PETERSON SCOTT E
Officer

43,290

Direct

Option Exercise

N/A

28-Jan-09

PETERSON SCOTT E
Officer

43,290

Direct

Automatic Sale at $34.50 per share.

$1,493,505

2-Jan-09

TROUT JAMES
Officer

313

Direct

Option Exercise

N/A

2-Jan-09

TROUT JAMES
Officer

313

Direct

Automatic Sale at $33.19 per share.

$10,388

29-Dec-08

FOUST MICHAEL F
Officer

30,081

Direct

Option Exercise

N/A

17-Dec-08

FOUST MICHAEL F
Officer

25,000

Direct

Option Exercise

N/A

17-Dec-08

FOUST MICHAEL F
Officer

25,000

Direct

Sale at $32.12 per share.

$802,999

17-Dec-08

PETERSON SCOTT E
Officer

20,204

Direct

Option Exercise at $12 per share.

$242,448

17-Dec-08

PETERSON SCOTT E
Officer

20,204

Direct

Sale at $32 per share.

$646,528

17-Dec-08

EARLEY KATHLEEN
Director

6,764

Direct

Option Exercise

N/A

16-Dec-08

MILLS JOSHUA ANANDA
Officer

10,000

Direct

Option Exercise

N/A

16-Dec-08

MILLS JOSHUA ANANDA
Officer

10,000

Direct

Sale at $31.64 per share.

$316,400

16-Dec-08

STEIN A WILLIAM
Officer

30,000

Direct

Option Exercise

N/A

16-Dec-08

STEIN A WILLIAM
Officer

30,000

Direct

Sale at $30.51 per share.

$915,300

16-Dec-08

FOUST MICHAEL F
Officer

17,000

Direct

Option Exercise

N/A

16-Dec-08

FOUST MICHAEL F
Officer

17,000

Direct

Sale at $30.15 per share.

$512,550

5-Dec-08

MILLS JOSHUA ANANDA
Officer

1,250

Direct

Option Exercise

N/A

5-Dec-08

MILLS JOSHUA ANANDA
Officer

1,250

Direct

Sale at $29.93 per share.

$37,412

2-Dec-08

TROUT JAMES
Officer

120

Direct

Option Exercise

N/A

2-Dec-08

TROUT JAMES
Officer

120

Direct

Automatic Sale at $24.52 per share.

$2,942

1-Dec-08

TROUT JAMES
Officer

193

Direct

Option Exercise

N/A

1-Dec-08

TROUT JAMES
Officer

193

Direct

Automatic Sale at $27.36 per share.

$5,280

25-Nov-08

FOUST MICHAEL F
Officer

20,000

Direct

Option Exercise

N/A

25-Nov-08

FOUST MICHAEL F
Officer

20,000

Direct

Sale at $27.08 per share.

$541,600

21-Nov-08

MILLS JOSHUA ANANDA
Officer

5,000

Direct

Option Exercise

N/A

21-Nov-08

MILLS JOSHUA ANANDA
Officer

5,000

Direct

Sale at $21.37 per share.

$106,850

20-Nov-08

FOUST MICHAEL F
Officer

75,000

Direct

Option Exercise

N/A

20-Nov-08

FOUST MICHAEL F
Officer

75,000

Direct

Sale at $23.23 per share.

$1,742,250

20-Nov-08

ERNST RUANN FAYE
Director

6,448

Direct

Option Exercise

N/A

3-Nov-08

TROUT JAMES
Officer

313

Direct

Option Exercise

N/A

3-Nov-08

TROUT JAMES
Officer

313

Direct

Automatic Sale at $33.48 per share.

$10,479

28-Oct-08

TROUT JAMES
Officer

12,153

Direct

Option Exercise at $12 per share.

$145,836

28-Oct-08

TROUT JAMES
Officer

12,153

Direct

Automatic Sale at $27.52 per share.

$334,450

9-Oct-08

TROUT JAMES
Officer

17,317

Direct

Option Exercise

N/A

9-Oct-08

TROUT JAMES
Officer

17,317

Direct

Automatic Sale at $38.84 per share.

$672,592

7-Oct-08

TROUT JAMES
Officer

12,987

Direct

Option Exercise

N/A

7-Oct-08

TROUT JAMES
Officer

12,987

Direct

Automatic Sale at $39.31 per share.

$510,518

2-Oct-08

TROUT JAMES
Officer

119

Direct

Option Exercise

N/A

2-Oct-08

TROUT JAMES
Officer

119

Direct

Automatic Sale at $44.01 per share.

$5,237

2-Oct-08

TROUT JAMES
Officer

12,987

Direct

Option Exercise

N/A

2-Oct-08

TROUT JAMES
Officer

12,987

Direct

Automatic Sale at $43.99 per share.

$571,298

2-Oct-08

CROSBY CHRISTOPHER JAMES JR
Officer

51,949

Direct

Option Exercise

N/A

2-Oct-08

CROSBY CHRISTOPHER JAMES JR
Officer

51,949

Direct

Automatic Sale at $44 per share.

$2,285,756

2-Oct-08

SHAM EDWARD F
Officer

7,577

Direct

Option Exercise

N/A

2-Oct-08

SHAM EDWARD F
Officer

7,577

Direct

Automatic Sale at $44.01 per share.

$333,463

1-Oct-08

TROUT JAMES
Officer

193

Direct

Option Exercise

N/A

1-Oct-08

TROUT JAMES
Officer

193

Direct

Automatic Sale at $46.40 per share.

$8,955

1-Oct-08

STEIN A WILLIAM
Officer

373

Direct

Option Exercise

N/A

1-Oct-08

STEIN A WILLIAM
Officer

373

Direct

Automatic Sale at $46.40 per share.

$17,307

1-Oct-08

GEOGHEGAN BERNARD
Officer

3,339

Direct

Statement of Ownership

N/A

19-Sep-08

CHAPMAN LAURENCE A
Director

200

Direct

Automatic Sale at $50 per share.

$10,000

18-Sep-08

CHAPMAN LAURENCE A
Director

5,000

Direct

Automatic Sale at $48 per share.

$240,000

11-Sep-08

CROSBY CHRISTOPHER JAMES JR
Officer

8,691

Direct

Option Exercise

N/A

9-Sep-08

MAGNUSON RICHARD A
Director

21,578

Direct

Option Exercise

N/A

9-Sep-08

MAGNUSON RICHARD A
Director

21,578

Direct

Sale at $46.06 per share.

$993,882

8-Sep-08

MAGNUSON RICHARD A
Director

179,860

Direct

Option Exercise

N/A

8-Sep-08

MAGNUSON RICHARD A
Director

179,860

Direct

Sale at $46.06 per share.

$8,284,351

2-Sep-08

TROUT JAMES
Officer

313

Direct

Option Exercise

N/A

2-Sep-08

TROUT JAMES
Officer

313

Direct

Automatic Sale at $46.40 per share.

$14,523

2-Sep-08

STEIN A WILLIAM
Officer

372

Direct

Option Exercise

N/A

2-Sep-08

STEIN A WILLIAM
Officer

372

Direct

Automatic Sale at $46.40 per share.

$17,260

2-Sep-08

SHAM EDWARD F
Officer

3,150

Direct

Option Exercise

N/A

2-Sep-08

SHAM EDWARD F
Officer

3,150

Direct

Sale at $45.62 per share.

$143,703

18-Aug-08

MILLS JOSHUA ANANDA
Officer

650

Direct

Option Exercise

N/A

18-Aug-08

MILLS JOSHUA ANANDA
Officer

650

Direct

Sale at $45 per share.

$29,250

14-Aug-08

FOUST MICHAEL F
Officer

31,316

Direct

Option Exercise at $12 per share.

$375,792

14-Aug-08

FOUST MICHAEL F
Officer

31,316

Direct

Sale at $45.41 per share.

$1,422,059

14-Aug-08

PETERSON SCOTT E
Officer

3,049

Direct

Option Exercise

N/A

14-Aug-08

PETERSON SCOTT E
Officer

3,049

Direct

Sale at $45.47 per share.

$138,638

14-Aug-08

MAGNUSON RICHARD A
Director

200,000

Direct

Option Exercise

N/A

14-Aug-08

MAGNUSON RICHARD A
Director

200,000

Direct

Sale at $45.63 per share.

$9,126,000

4-Aug-08

TROUT JAMES
Officer

120

Direct

Option Exercise

N/A

4-Aug-08

TROUT JAMES
Officer

120

Direct

Automatic Sale at $42.99 per share.

$5,158

1-Aug-08

TROUT JAMES
Officer

194

Direct

Option Exercise

N/A

1-Aug-08

TROUT JAMES
Officer

194

Direct

Automatic Sale at $43.28 per share.

$8,396

1-Aug-08

STEIN A WILLIAM
Officer

372

Direct

Option Exercise

N/A

1-Aug-08

STEIN A WILLIAM
Officer

372

Direct

Automatic Sale at $43.28 per share.

$16,100

2-Jul-08

TROUT JAMES
Officer

120

Direct

Option Exercise

N/A

2-Jul-08

TROUT JAMES
Officer

120

Direct

Automatic Sale at $42 per share.

$5,040

1-Jul-08

TROUT JAMES
Officer

193

Direct

Option Exercise

N/A

1-Jul-08

TROUT JAMES
Officer

193

Direct

Automatic Sale at $40.55 per share.

$7,826

1-Jul-08

STEIN A WILLIAM
Officer

371

Direct

Option Exercise

N/A

1-Jul-08

STEIN A WILLIAM
Officer

371

Direct

Automatic Sale at $40.55 per share.

$15,044

16-Jun-08

SHAM EDWARD F
Officer

2,350

Direct

Option Exercise

N/A

16-Jun-08

SHAM EDWARD F
Officer

2,350

Direct

Sale at $42.64 per share.

$100,204

11-Jun-08

CROSBY CHRISTOPHER JAMES JR
Officer

30,153

Direct

Option Exercise at $12 - $20.37 per share.

N/A

11-Jun-08

CROSBY CHRISTOPHER JAMES JR
Officer

30,153

Direct

Sale at $41.54 - $41.61 per share.

$1,254,0002

2-Jun-08

TROUT JAMES
Officer

314

Direct

Option Exercise

N/A

2-Jun-08

TROUT JAMES
Officer

314

Direct

Automatic Sale at $41.90 per share.

$13,156

2-Jun-08

STEIN A WILLIAM
Officer

371

Direct

Option Exercise

N/A

2-Jun-08

STEIN A WILLIAM
Officer

371

Direct

Automatic Sale at $41.90 per share.

$15,544

29-May-08

MILLS JOSHUA ANANDA
Officer

421

Direct

Sale at $42.90 per share.

$18,060

28-May-08

FOUST MICHAEL F
Officer

25,000

Direct

Sale at $41.95 per share.

$1,048,750

21-May-08

MILLS JOSHUA ANANDA
Officer

1,921

Direct

Option Exercise

N/A

21-May-08

MILLS JOSHUA ANANDA
Officer

1,500

Direct

Sale at $41.96 per share.

$62,940

15-May-08

FOUST MICHAEL F
Officer

21,002

Direct

Option Exercise

N/A

15-May-08

FOUST MICHAEL F
Officer

20,000

Direct

Sale at $42.09 per share.

$841,800

15-May-08

MAGNUSON RICHARD A
Director

200,000

Direct

Option Exercise

N/A

15-May-08

MAGNUSON RICHARD A
Director

200,000

Direct

Sale at $41.96 per share.

$8,392,000

8-May-08

STEIN A WILLIAM
Officer

370

Direct

Option Exercise

N/A

8-May-08

STEIN A WILLIAM
Officer

370

Direct

Automatic Sale at $40 per share.

$14,800

2-May-08

TROUT JAMES
Officer

1,437

Direct

Option Exercise

N/A

2-May-08

TROUT JAMES
Officer

1,437

Direct

Automatic Sale at $39.55 per share.

$56,833

1-May-08

TROUT JAMES
Officer

194

Direct

Option Exercise

N/A

1-May-08

TROUT JAMES
Officer

194

Direct

Automatic Sale at $38.59 per share.

$7,486

18-Apr-08

STEIN A WILLIAM
Officer

10,590

Direct

Option Exercise

N/A

18-Apr-08

STEIN A WILLIAM
Officer

10,590

Direct

Automatic Sale at $40 per share.

$423,600

 

 

 

 

Data provided by EDGAR Online

 

Catalyst

  • Focus by investment community on the non-arms length transactions between DLR, GI Partners, and TelX
  • Recognition by shareholder base of continued and consistent equity raises and dilution
  • Examination and discovery of affiliations of certain member of the board of directors
  • Inability to raise additional capital to fund dividend payments and growth
  • Termination of leases entered into during the bull market (2006-2008)
  • Continued shift and acceleration of cloud computing leading to a broken growth story
    sort by    

    Description

    Recommendation 

    Digital Realty Trust (DLR) is a fast growing REIT with a niche focus on the attractive datacenter development space.  Since its IPO, the Company has demonstrated strong growth by consistently increasing its FFO year-over-year and raising its dividend on eight occasions to reward shareholders.  DLR is also uniquely positioned to benefit from the next M&A cycle...we recommend DLR as a short.

    Closer examination of the financials, insider selling practices, certain related-party contractual arrangements, and pattern of dilutive equity capital raises (effectively, looking beyond the surface), will highlight why DLR is a compelling short.  Below are the key catalysts that will cause the stock to reach its appropriate fair value of $38:

    • Focus by investment community on the non-arms length transactions between DLR, GI Partners, and TelX
    • Recognition by shareholder base of continued and consistent equity raises and dilution
    • Examination and discovery of affiliations of certain member of the board of directors
    • Inability to raise additional capital to fund dividend payments and growth
    • Termination of leases entered into during the bull market (2006-2008)
    • Continued shift and acceleration of cloud computing leading to a broken growth story
    Thesis Summary
     
    DLR has positioned itself as a growth company, but the growth is entirely tied to a strong and robust capital market environment. The company has a consistent record of share dilution through common stock and preferred stock offerings to fund both its growth strategy and its dividend payout.  Without consistent capital market access, the dividend is unsustainable.  If valued as a free cash flow story, the valuation range is materially less than the current equity value.  In addition, there are several related-party red flags that, when taken together, should give investors further pause when evaluating the risk associated with the business.  These include:
    • Massive insider selling (insiders have rarely purchased any stock, dating back to the IPO)
    • DLR's sixth largest customer, TelX, is controlled by a private investment vehicle owned by the company's CEO and Chairman.
    • "Independent" board members work for companies that have been accused of fraud over the last few years
    • Sell-side has turned a blind-eye on the fundamentals and is enamored by a "growth" REIT that pays a dividend (currently yielding 3.2%)
    • Complex and questionable accounting that has confused the Street
    DLR has a consistent strategy of raising capital at the cost of equity shareholders.  The table below depicts the consistent record of capital raises that have supported DLR's "growth" since being a public company in 2004.
      % Share % Debt % Asset
      Increase Increase Increase
    2005 28% 40% 50.9%
    2006 103% 49% 43.0%
    2007 18% 20% 28.5%
    2008 12% -6% 16.7%
    2009 -97% 19% 0.0%
     
    This pattern of regular equity capital raises has raised some concerns by investors with management often fielding questions on the timing of equity raises, particularly in the context of no major acquisition announcement.  To avoid this past scrutiny, on DLR's first quarter 2010 earnings release, management disclosed its new strategy to raise capital: the less obvious ATM strategy.  The ATM disclosure was made after management had already issued $55 million of common stock (or approximately 1.3% of the shares outstanding).  Given the large authorization amount ($400 million), management apparently anticipates much larger and more significant equity raises through its newly authorized ATM program.  See the below language from the release:
     
    "In December 2009 and January 2010, the Company entered into equity distribution agreements referred to as its At-the-Market equity distribution program under which it can, subject to market conditions, issue and sell up to $400.0 million of its common stock. For the quarter ended March 31, 2010, the Company generated net proceeds of approximately $54.8 million after payment of approximately $0.8 million of commissions to the sales agents from the issuance of approximately 1.1 million shares of common stock at an average price of $50.56 per share."
     
    Business Description:
    DLR owns, acquires, develops, redevelops and manages technology-related real estate. The Company provides "Turn-Key Datacenter(TM) and Powered Base Building(TM) datacenter solutions for domestic and international tenants across a variety of industry verticals ranging from information technology and internet enterprises, to manufacturing and financial services. DLR has 81 properties and 14.4 million of rentable square feet.
     
    History:
    DLR priced its initial public offering on October 28, 2004 at $12.00 per share.  The Company raised approximately $257 million in gross proceeds through the sale of 21.4 million shares of common stock. The IPO was co-led by Citigroup and Merrill Lynch.
     
    Sustainable Common Stock Dividend Growth (source DLR website):
    DLR has a record of sustainable dividend growth, as outlined in the table below:
     

    Date Declared

    Record Date

    Payment Date

    Amount per share

    April 27, 2010
    February 24, 2010
    October 27, 2009
    July 28, 2009
    April 28, 2009
    February 25, 2009

    June 15, 2010
    March 15, 2010
    December 15, 2009
    September 15, 2009
    June 15, 2009
    March 16, 2009

    June 30, 2010
    March 31, 2010
    January 15, 2010
    September 30, 2009
    June 30, 2009
    March 31, 2009

    $0.48
    $0.48
    $0.45
    $0.36
    $0.33
    $0.33

    November 4, 2008

    December 15, 2008

    January 7, 2009

    $0.33

    August 4, 2008

    September 15, 2008

    September 30, 2008

    $0.31

    May 6, 2008

    June 16, 2008

    June 30, 2008

    $0.31

    February 25, 2008

    March 17, 2008

    March 31, 2008

    $0.31

    November 1, 2007

    December 31, 2007

    January 14, 2008

    $0.31

    August 1, 2007

    September 17, 2007

    October 1, 2007

    $0.28625

    May 2, 2007

    June 15, 2007

    July 2, 2007

    $0.28625

    February 16, 2007

    March 15, 2007

    April 2, 2007

    $0.28625

    November 1, 2006

    December 29, 2006

    January 15, 2007

    $0.28625

    July 31, 2006

    September 15, 2006

    October 2, 2006

    $0.26500

    May 1, 2006

    June 15, 2006

    June 30, 2006

    $0.26500

    February 27, 2006

    March 15, 2006

    March 31, 2006

    $0.26500

    November 8, 2005

    December 30, 2005

    January 13, 2006

    $0.26500

    August 9, 2005

    September 15, 2005

    September 30, 2005

    $0.243750

    May 16, 2005

    June 15, 2005

    June 30, 2005

    $0.243750

    February 14, 2005

    March 15, 2005

    March 31, 2005

    $0.243750

    December 14, 2004

    December 31, 2004

    January 14, 2005

    $0.156318

     
    However, company filings indicate that DLR may start to pay all or part of it's dividend in stock, rather than cash.  We have seen REITS begin to issue stock dividends, especially in cases where payout ratios are high.  DLR's dividend yield is only 3.25% and an announcement of a dividend payment with a stock component would be a significant negative surprise.

    Sell-side analysts like the DLR story:

    DLR is rated the equivalent of a buy at nine of the twelve brokerage firms that cover the company.  The chart below highlights the overall positive sentiment form the sell-side:

        Broker   Rating   PT  
    1   BAC-ML   Buy   $60  
    2   Citi   Hold   $52  
    3   Credit Suisse   Outperform   $51  
    4   Deutsche Bank   Buy   $58  
    5   ISI Group   Buy   $66  
    6   JMP Securities   Market outperform   $57  
    7   Oppenheimer   Market perform      
    8   Raymond James   Strong buy   $57  
    9   RBC Capital   Outperform   $67  
    10   Robert Baird   Outperform   $55  
    11   Stifel Nicolaus   Buy   $70  
    12   UBS   Neutral   $56  
    The sell-side cannot get enough of DLR.  Why would they with DLR tapping the capital markets (while generating investment banking fees for the sell-side) on a consistent basis? 

    Sell-Side Commentary Highlights:

    Credit Suisse: "Digital has taken a number of steps to bolster its liquidity position, including $198 million of secured financing, the closing of a $200 million credit facility, and a $25 million increase in the commitments under its existing credit facility."

    JMP Securities: "Peer multiples are within a broad range, but DLR is certainly near the high end. We believe that some premium for DLR is justified given stronger supply/demand fundamentals than the average REIT."

    Raymond James: "We expect the company's focus on the data center market to continue to drive outsized returns for the near to intermediate term as supply appears in check and the strong demand appears essentially unaffected by the current economic slowdown"

    Robert Baird: "We have revised our estimates in light of DLR's conservative '09 outlook and an anticipated economic slowdown that may marginally impact capital investment. Nonetheless, we believe DLR offers one of the few REIT growth stories in our group at an attractive valuation."

    Oddly enough, a sell-side analyst at Piper Jaffray who presented management with some of the more difficult questions on TelX, GI Partners, and insider selling was shortly thereafter dismissed from Piper Jaffray.  Credit Suisse also dismissed the analyst who covered this stock in early 2009 and was starting to examine the GI Partners relationship and history.

    Massive Equity Dilution:

    Since the IPO, DLR has increased its share count from 20 million shares to 78 million shares as the end of 2009. Additionally, the company has tapped the preferred stock market to further fund its operations and dividend.  The table below outlines the size of the combined equity and preferred offerings since the IPO.

    Year                            Total Issuance of Preferred and Common Stock

    2005                            $271 million

    2006                            $378 million

    2007                            $333 million   

    2008                            $555 million

    2009                            $85 million

    2010                            $55 million (ATM raise)

    Debt issuance net of repayments ($):

    DLR depends on capital markets. The table below is illustrates the company's waning ability to issue debt.

    Year                            Total Issuance Net of Repayments

    2005                            $210 million   

    2006                            $370 million   

    2007                            $222 million   

    2008(q3)                      ($79) million Partial debt pay down was funded through highly dilutive $221 million common plus $335 million preferred raise during 2008)

    2009                            $260 million

    Questionable Credibility of Independent Director:

     An independent DLR director works for a company named in a fraud lawsuit:

     TAMPA -- A locally headquartered telecom company seems to have its wires crossed with its landlords.

    In Florida, Switch & Data Facilities Co. is facing a lawsuit accusing the company of breaching contracts and committing fraud by using undercapitalized shell companies to secure a 10-year lease worth $6 million.

    DLR's website does not indicate that this director is on the board of Switch & Data, a customer of DLR.  We find it strange that the relationship is not disclosed on DLR's profile of the director.

    Complicated Unexplained Accounting: 

    On previous earnings calls, management has been less than clear on what appear to be simple explanations for how DLR accounts for items in its financial statements.  Responses such as "that would be very difficult" and "it's a very complex model" from the CFO do not provide much comfort.  Below is an odd exchange between Bill Stein, CFO of DLR, and a sell-side analyst:

    <Q - Omotayo Okusanya>: Okay. That's helpful. And then how do I go about thinking of your taxable earnings

    versus FFO in '09? Is there a way you can give us a sense of what the two, what the big difference is between the two

    numbers, so at least from that end we have a better sense of how to model dividends?

    <A - A. William Stein>: That would be very difficult.

    <Q - Omotayo Okusanya>: Then I would like one or two major line items that are just helpful in regards to

    differences that recur every quarter?

    <A - A. William Stein>: Well, I mean, it's basically depreciation.

    <Q - Omotayo Okusanya>: Okay. So - so that's helpful.

    <A - A. William Stein>: It's a very complex model, I will tell you that.

    Furthermore, when we have noted to analysts the nature of the lease with Telx (long maturity, high margin, etc.), analysts have called management to follow-up and management has failed to disclose that Telx is a related party through the GI Partners connection.  The lack of disclosure to the analyst community is astonishing given the significance of the customer (6thlargest).  See the analysis below regarding Telx/GI Partners relationship.

    Credentialed Management Team (source DLR website):
    As our Chairman, Rick Magnuson is responsible for defining Digital Realty's overall business strategy. In 2001, Mr. Magnuson co-founded the advisor to GI Partners and has served as its Chief Executive Officer since that time. Since November 1999, Mr. Magnuson has also served as Executive Managing Director of CB Richard Ellis Investors, where he formed, and continues to manage, the investments and activities of GI Partners. From 1994 through 1999, Mr. Magnuson held various positions with Nomura Securities, most recently as Deputy Managing Director of Nomura's London-based Principal Finance Group. Prior to that, he was a Director in the Investment Banking division of Merrill Lynch, and before that was with Digital Research, the company that developed the personal computer operating system. Mr. Magnuson also founded, and later sold, InterActive Software, a software services company. He serves as a director for NYSE-listed Glenborough Realty Trust and for two private companies. Mr. Magnuson holds a B.A. degree from Dartmouth College and an M.B.A. from Stanford University Graduate School of Business.
    Mr. Foust has served as Chief Executive Officer and as a Director of Digital Realty Trust (NYSE: DLR) since its IPO in October 2004. Mike co-founded the predecessor private equity fund, GI Partners, in 2001 and served as its Managing Director since that time.During his tenure at GI Partners, Mr. Foust directed the acquisition of technology-related properties and portfolio management. He has over 23 years of experience. Mr. Foust was a Senior Vice President at CB Richard Ellis, where he managed regional asset services operations, and he was a Senior Director at CB Richard Ellis Investors. Prior to CBRE, Mr. Foust held senior portfolio management and investment positions at UBS Asset Management, Karsten Realty Advisors and Trammell Crow Company. Prior to his real estate career, he participated in the origination of two related international telecom companies operating in New York and London. Mr. Foust received an AB degree magna cum laude from Harvard University and an MBA from Harvard Business School.
    Mr. Stein has served as CFO and CIO for Digital Realty Trust since July 2004. With more than 25 years experience, his previous positions include Co-Head of VentureBank@PNC and Media and Communications Finance and Managing Director at The PNC Financial Services Group; President/COO and EVP/CFO of TriNet Corporate Realty Trust, now part of Starwood Capital; and several senior financial and investment management positions at Westinghouse Electric, Westinghouse Financial Services, and Duquesne Light Company. In addition, Mr. Stein practiced law for eight years specializing in both litigation and securities and finance. Mr. Stein received an AB degree in Classics from Princeton University, a JD degree from the University of Pittsburgh, and an MBA degree with Distinction from Carnegie Mellon University.
    Scott E. Peterson is Digital Realty Trust's Senior Vice President responsible for our acquisition activities. From 2002 until our initial public offering in October 2004, Mr. Peterson was a Managing Director of GI Partners where he was responsible for property acquisitions with an emphasis on technology-related properties. Mr. Peterson has more than 17 years of real estate experience and was most recently a Senior Vice President with GIC Real Estate, the real estate investment entity for the Government of Singapore Investment Corporation. Previously, Mr. Peterson was active in investments, development and asset management with LaSalle Partners, a real estate services company, and Trammell Crow Company, a real estate developer. Mr. Peterson received a B.A. degree and an M.B.A. from Northwestern University.
    Chris J. Crosby has served as Senior Vice President of Corporate Development since August 2009. Prior to this role, he served and Senior Vice President Sales and Technical Services since October 2005. He joined Digital Realty Trust as Vice President of our sales and technical services activities at the completion of our initial public offering in October 2004. Since 2003, Mr. Crosby was Managing Director of Proferian, an operating partner of GI Partners.While at Proferian, Mr. Crosby was responsible for leasing and sales within the GI Partners portfolio with an emphasis on technology-related leasing including turn-key datacenter space. Mr. Crosby has more than 17 years of technology experience and was most recently a consultant for CRG West, an operating partner of The Carlyle Group, formed in 2001 to oversee and enhance strategic telecom assets managed by Carlyle Realty Group. Previously, Mr. Crosby was active in sales, sales management and product development at Nortel Networks, a leading supplier of products and services that support the Internet and other public and private data, voice and multimedia communications networks. Mr. Crosby received a B.S. degree from the University of Texas at Austin.
     
    Appearance of a Shareholder-Friendly Corporate Governance:

    Management/Board Overlap and GI Partners - Conflict of Interest / Related Parties:

    Michael Foust, CEO and director of DLR, co-founded the predecessor private equity fund GI Partners.

    Rick Magnuson, Chairman of the board of DLR, co-founded GI Partners and is currently a managing director at GI Partners.

    Scott Peterson, Sr VP of Acquisition Activities of DLR, was a managing director of GI Partners until 2004 (IPO of DLR).

    James Trout, Sr VP of Portfolio and Technical Operations of DLR, was formerly a managing director of Proferian, an operating partner of GI Partners.

    Disclosure on Potential Conflicts of Interest from 10-K:

    DLR's counsel has clearly highlighted the risks of the DLR/TelX/GI Partners relationship. Below is the risk factor disclosure that clearly underscores the conflict of interest and the potential issues that could arise in the context of this relationship.

    We may pursue less vigorous enforcement of terms of certain agreements because of conflicts of interest with GI Partners.GI Partners and its related fund, own a property on which we have a right of first offer. GI Partners Fund II, LLP, or GI Partners II, owns The tel(x) Group, an operator of "Meet-Me-Room" network interconnection facilities that leases 87,305 square feet from us under ten lease agreements. Richard Magnuson, the Chairman of our board of directors, is and will continue to be, the chief executive officer of the advisor to GI Partners and GI Partners II. In the future, we may enter into additional agreements with The tel(x) Group or other companies owned by GI Partners or GI Partners II or other GI Partners funds. We may choose not to enforce, or to enforce less vigorously, our rights under theses agreements because of our desire to maintain our ongoing relationship with GI Partners and Mr. Magnuson. 

    We would think that there will not be a conflict of interest between DLR and GI Partners, given they are one and the same.

    Sixth Largest Customer is controlled by GI Partners:
    Telx Group: acquired by GI Partners on November 20, 2006. Six days later DLR signed agreements with Telx Group to lease 10 facilities in the US.
     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

      

    Tenant

      

    Number
    of
    Locations

      

    Total
    Occupied
    Square
    Feet(1)

      

    Percentage
    of Net
    Rentable
    Square
    Feet

     

     

    Annualized
    Rent(2)

      

    Percentage
    of
    Annualized
    Rent

     

     

    Weighted
    Average
    Remaining
    Lease
    Term in
    Months

    1

      

    Savvis Communications

      

    18

      

    1,868,799

      

    14.9

     

    $

    48,792

      

    9.8

     

    112

    2

      

    Equinix Operating Company, Inc.

      

    4

      

    607,401

      

    4.8

     

     

    24,975

      

    5.0

     

    95

    3

      

    Qwest Communications International, Inc.

      

    15

      

    637,712

      

    5.1

     

     

    20,402

      

    4.1

     

    70

    4

      

    Facebook, Inc.

      

    3

      

    134,999

      

    1.1

     

     

    17,809

      

    3.6

     

    89

    5

      

    NTT Communications Company

      

    4

      

    295,339

      

    2.3

     

     

    16,820

      

    3.4

     

    63

    6

      

    TelX Group, Inc.

      

    10

      

    126,130

      

    1.0

     

     

    16,148

      

    3.2

     

    203

    7

      

    AT & T

      

    14

      

    553,828

      

    4.4

     

     

    14,533

      

    2.9

     

    106

    8

      

    JPMorgan Chase & Co.

      

    3

      

    149,935

      

    1.2

     

     

    14,437

      

    2.9

     

    120

    9

      

    Morgan Stanley

      

    2

      

    92,451

      

    0.7

     

     

    13,689

      

    2.7

     

    49

    10

      

    Level 3 Communications, LLC(3)

      

    20

      

    318,656

      

    2.5

     

     

    11,537

      

    2.3

     

    107

    11

      

    Yahoo! Inc.

      

    2

      

    110,847

      

    0.9

     

     

    9,763

      

    1.9

     

    94

    12

      

    eircom Limited

      

    1

      

    124,500

      

    1.0

     

     

    9,206

      

    1.8

     

    115

    13

      

    BT Americas, Inc.

      

    3

      

    47,286

      

    0.4

     

     

    8,981

      

    1.8

     

    96

    14

      

    Sprint Communications Co., LP

      

    6

      

    173,319

      

    1.4

     

     

    8,891

      

    1.8

     

    57

    15

      

    T-Systems North America, Inc.

      

    3

      

    82,610

      

    0.7

     

     

    8,826

      

    1.8

     

    48

    16

      

    Microsoft Corporation

      

    2

      

    313,485

      

    2.5

     

     

    8,178

      

    1.6

     

    67

    17

      

    TATA Communications (UK)

      

    2

      

    105,366

      

    0.8

     

     

    7,895

      

    1.6

     

    99

    18

      

    Carpathia Hosting

      

    3

      

    51,784

      

    0.4

     

     

    7,832

      

    1.6

     

    89

    19

      

    HSBC Bank PLC

      

    1

      

    113,464

      

    0.9

     

     

    7,316

      

    1.5

     

    168

    20

      

    Comverse Technology, Inc.

      

    1

      

    367,033

      

    2.9

     

     

    7,222

      

    1.4

     

    13

     

      

     

      

     

      

     

      

     

     

     

     

     

      

     

     

     

     

     

      

    Total/Weighted Average

      

     

      

    6,274,944

      

    49.9

     

    $

    283,252

      

    56.7

     

    93

     

      

     

      

     

      

     

      

     

     

     

     

     

      

     

     

     

     

    Telx Group, controlled by GI Partners, the company founded by DLR's CEO and Chairman, is the sixth largest customer of DLR.  In addition, it is important to note that Telx represents 1.0% of the percentage of net rentable square feet, but surprisingly represents 3.2% of the annualized rent. This would imply that this particular customer pays a higher price than other tenants.  By contrast, the top three customers have higher shares of net rentable square feet than of annualized rent.  One would think that, given Telx pays a higher price to lease space, that it would have a lease life that would be shorter in duration.  Surprisingly, Telx has the longest lease life of the top 20 customers at 17 years.

    Valuation:
    The valuation story for DLR is significantly less compelling when you consider the over-dependence on the capital markets.  Below is a DCF valuation analysis that supports that DLR is overvalued.  Our analysis takes a conservative approach to capital expenditures consistent with the sell-side sentiment that maintenance capex is a small portion of DLR's capital expenditures.  Additionally, this fundamental analysis does not account for the risks associated with DLR's insider transactions and less than arms-length transactions that are highlighted above.  We have not included a DCF excluding the Telx cash flows.
    Digital Realty Trust DCF ($000's) 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E
    Revenue $842,328 $995,142 $1,161,524 $1,351,856 $1,419,448 $1,490,421 $1,564,942 $1,643,189
     EBITDA  $543,844 $638,887 $737,857 $859,322 $919,475 $983,838 $1,052,707 $1,126,396
    Depreciation and Amortization $211,200 $217,607 $224,210 $231,012 $247,183 $264,485 $282,999 $302,809
    Other ($56,540) ($63,525) ($60,500) ($57,619) ($54,875) ($52,262) ($49,773) ($47,403)
    Net Income $24,428 $357,755 $453,147 $570,691 $617,417 $667,090 $719,934 $776,183
                     
    Adjustments:                 
    (+) Depreciation & Amorization $211,200 $217,607 $224,210 $231,012 $247,183 $264,485 $282,999 $302,809
    (+) Other ($56,540) ($63,525) ($60,500) ($57,619) ($54,875) ($52,262) ($49,773) ($47,403)
    (-) Capital Expenditures ($40,107) ($46,300) ($52,576) ($58,607) ($65,161) ($44,931) ($47,177) ($49,536)
    (-) Change in Working Capital $9,282 $11,066 $0 $0 $0 $0 $0 $0
     Unlevered Free Cash Flow        148,263       476,603       564,280       685,477       744,563       834,383       905,982       982,053
                     
                     
    PV of Free Cash Flow 3,427,151   WACC 9.0%        
    Terminal Value     4,505,584   Beta                  1.1    
    PV of Terminal Value     2,463,443   10-year tsry rate   2.0%    
    Enterprise Value     5,890,593   Equity Risk Premium   8.0%    
    Cash & ST Investments         72,320   Avg cost of debt (pre tax)   5.8%    
    Debt     2,372,110   Tax rate     0.0%    
    Net debt (+ pref stock)     2,299,790   Perpetual Growth rate   2.0%    
    Equity Value     3,590,803   Debt to Cap     30.0%    
          Terminal multiple   4.0x    
    12-month share price target  $            38              
                     
    So we have a stock with a fair value of $38.  The $38, however, does not account for the various red flags highlighted above.  When dealing with risks such as potential conflicts of interests/insider dealings, a normalized discount rate is inappropriate.  $38, then, represents a best case scenario.  The stock could trade materially lower when some of issues discussed above surface.

    Risk to Impairment:

    From an accounting perspective, impairment to DLR's asset basis is unlikely to be realized unless the potential cash flow is impaired and DLR's accounting firm then examines the underlying market value of the asset basis.  While currently a remote risk, if tenants default and DLR is unable to replace those tenants, the impairments to the underlying real estate properties will be material, particularly because DLR has acquired a significant portion of its real estate portfolio during the height of the real estate bubble (2005-2007).  See the table below.

    Disclosure on Property from 10-K:

    Year Ended December 31:

      

    Properties
    Acquired(1)

      

    Net Rentable
    Square Feet(2)

      

    Square Feet of Space Held
    for Redevelopment as of
    December 31, 2009(3)

    2002

      

    5

      

    1,125,292

      

    19,890

    2003

      

    6

      

    1,028,185

      

    30,175

    2004

      

    10

      

    2,587,455

      

    99,014

    2005

      

    20

      

    3,314,225

      

    196,072

    2006

      

    16

      

    2,104,209

      

    117,389

    2007

      

    13

      

    1,603,259

      

    171,300

    2008

      

    5

      

    209,928

      

    354,320

    2009

      

    6

      

    601,081

      

    796,226

     

      

     

      

     

      

     

     

     

     

     

     

     

     

     

     

    Market Concentration of Property from 10-K:

     

    Metropolitan Market

      

    Percentage of
    12/31/09 total annualized rent(1)

     

    Silicon Valley

      

    17.9

    Chicago

      

    11.8

    New York/New Jersey

      

    10.3

    Northern Virginia

      

    9.8

    Dallas

      

    9.5

    Phoenix

      

    6.4

    San Francisco

      

    4.8

    Los Angeles

      

    4.5

    London, England

      

    4.2

    Dublin, Ireland

      

    3.9

    Paris, France

      

    3.2

    Other

      

    13.7

     

      

     

     

     

      

    100.0

    %

     

    Systematic Insider Selling:

    Since the IPO of DLR (2004), insiders have consistently sold their stock.  The selling is not limited to small regular blocks.  For example, the Chairman has sold large blocks of stock repeatedly, irrespective of price.  Below is a quick summary of insider selling over the last two years (and an itemized catalogue of insider activity is provided at the end of this write-up).

    Total sales (last 2 years) 1,633,631
    Shares outstanding 77,881,924
    % of sales of s/o 2.1%
    IPO shares (2004) 20,000,000
    % of sales of s/o 8.2%

    Summary:

    At first blush, DLR appears to be a REIT with a focus (datacenters) that has shown strong relative growth and favorable near-term secular trends.  The investment story, however, raises concerns and in fact provides a compelling short thesis, after closer examination of the financials and relative valuation, management team, certain contractual arrangements, and pattern of dilutive capital raises.  Below are the key catalysts that will cause the stock to reach its appropriate fair value:

     

    INSIDER TRANSACTIONS REPORTED - LAST TWO YEARS

     

    Date

    Insider

    Shares

    Type

    Transaction

    Value*

    5-Apr-10

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Option Exercise

    N/A

    5-Apr-10

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Automatic Sale at $54.77 per share.

    $6,572

    1-Apr-10

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Option Exercise

    N/A

    1-Apr-10

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Automatic Sale at $54.44 per share.

    $5,280

    16-Mar-10

    STEIN A WILLIAM
    Officer

    6,540

    Direct

    Option Exercise

    N/A

    16-Mar-10

    STEIN A WILLIAM
    Officer

    6,540

    Direct

    Sale at $55.66 per share.

    $364,016

    16-Mar-10

    FOUST MICHAEL F
    Officer

    9,000

    Direct

    Option Exercise

    N/A

    16-Mar-10

    FOUST MICHAEL F
    Officer

    9,000

    Direct

    Sale at $55.70 per share.

    $501,300

    11-Mar-10

    GEOGHEGAN BERNARD
    Officer

    675

    Direct

    Option Exercise at $41.73 per share.

    $28,167

    11-Mar-10

    GEOGHEGAN BERNARD
    Officer

    4,264

    Direct

    Sale at $54.53 - $54.61 per share.

    $233,0002

    9-Mar-10

    CROSBY CHRISTOPHER JAMES JR
    Officer

    15,800

    Direct

    Option Exercise at $20.37 - $41.73 per share.

    N/A

    9-Mar-10

    CROSBY CHRISTOPHER JAMES JR
    Officer

    15,800

    Direct

    Sale at $55.14 - $55.39 per share.

    $873,0002

    9-Mar-10

    EARLEY KATHLEEN
    Director

    1,000

    Direct

    Purchase at $55.45 per share.

    $55,450

    2-Mar-10

    MILLS JOSHUA ANANDA
    Officer

    119

    Direct

    Option Exercise

    N/A

    2-Mar-10

    MILLS JOSHUA ANANDA
    Officer

    119

    Direct

    Automatic Sale at $52.42 per share.

    $6,237

    1-Mar-10

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Option Exercise

    N/A

    1-Mar-10

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Automatic Sale at $51.65 per share.

    $5,010

    25-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    2,102

    Direct

    Option Exercise at $0 per share.

    N/A

    25-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    2,102

    Direct

    Automatic Sale at $50.22 per share.

    $105,562

    23-Feb-10

    GEOGHEGAN BERNARD
    Officer

    9,252

    Direct

    Acquisition (Non Open Market) at $0 per share.

    N/A

    2-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Option Exercise

    N/A

    2-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Automatic Sale at $48.56 per share.

    $5,827

    1-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    96

    Direct

    Option Exercise

    N/A

    1-Feb-10

    MILLS JOSHUA ANANDA
    Officer

    96

    Direct

    Automatic Sale at $48.35 per share.

    $4,641

    4-Jan-10

    MILLS JOSHUA ANANDA
    Officer

    217

    Direct

    Option Exercise

    N/A

    4-Jan-10

    MILLS JOSHUA ANANDA
    Officer

    217

    Direct

    Automatic Sale at $50.54 per share.

    $10,967

    28-Dec-09

    JACOBS ELLEN A
    Officer

    3,933

    Direct

    Option Exercise

    N/A

    28-Dec-09

    JACOBS ELLEN A
    Officer

    3,933

    Direct

    Automatic Sale at $50 per share.

    $196,650

    16-Dec-09

    STEIN A WILLIAM
    Officer

    5,407

    Direct

    Option Exercise

    N/A

    16-Dec-09

    STEIN A WILLIAM
    Officer

    5,407

    Direct

    Sale at $49.18 per share.

    $265,916

    14-Dec-09

    CHAPMAN LAURENCE A
    Director

    716

    Direct

    Option Exercise

    N/A

    11-Dec-09

    FOUST MICHAEL F
    Officer

    17,144

    Direct

    Option Exercise

    N/A

    11-Dec-09

    FOUST MICHAEL F
    Officer

    3,900

    Direct

    Sale at $47.71 per share.

    $186,069

    4-Dec-09

    JACOBS ELLEN A
    Officer

    67

    Direct

    Option Exercise

    N/A

    4-Dec-09

    JACOBS ELLEN A
    Officer

    67

    Direct

    Automatic Sale at $50 per share.

    $3,350

    2-Dec-09

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Option Exercise

    N/A

    2-Dec-09

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Automatic Sale at $48.40 per share.

    $5,808

    1-Dec-09

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Option Exercise

    N/A

    1-Dec-09

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Automatic Sale at $48.49 per share.

    $4,703

    1-Dec-09

    STEIN A WILLIAM
    Officer

    377

    Direct

    Option Exercise

    N/A

    1-Dec-09

    STEIN A WILLIAM
    Officer

    377

    Direct

    Automatic Sale at $48.89 per share.

    $18,431

    13-Nov-09

    CROSBY CHRISTOPHER JAMES JR
    Officer

    1,739

    Direct

    Disposition (Non Open Market) at $0 per share.

    N/A

    13-Nov-09

    PETERSON SCOTT E
    Officer

    6,884

    Direct

    Option Exercise

    N/A

    13-Nov-09

    PETERSON SCOTT E
    Officer

    6,884

    Direct

    Sale at $47.50 per share.

    $326,990

    13-Nov-09

    MAGNUSON RICHARD A
    Director

    30,622

    Direct

    Option Exercise

    N/A

    13-Nov-09

    MAGNUSON RICHARD A
    Director

    30,622

    Direct

    Sale at $47 per share.

    $1,439,234

    12-Nov-09

    CROSBY CHRISTOPHER JAMES JR
    Officer

    5,000

    Direct

    Option Exercise at $20.37 per share.

    $101,850

    12-Nov-09

    CROSBY CHRISTOPHER JAMES JR
    Officer

    11,952

    Direct

    Sale at $48 per share.

    $573,696

    12-Nov-09

    MAGNUSON RICHARD A
    Director

    169,378

    Direct

    Option Exercise

    N/A

    12-Nov-09

    MAGNUSON RICHARD A
    Director

    169,378

    Direct

    Sale at $47.44 per share.

    $8,035,292

    2-Nov-09

    MILLS JOSHUA ANANDA
    Officer

    217

    Direct

    Option Exercise

    N/A

    2-Nov-09

    MILLS JOSHUA ANANDA
    Officer

    217

    Direct

    Automatic Sale at $45.60 per share.

    $9,895

    2-Nov-09

    STEIN A WILLIAM
    Officer

    377

    Direct

    Option Exercise

    N/A

    2-Nov-09

    STEIN A WILLIAM
    Officer

    377

    Direct

    Automatic Sale at $45.60 per share.

    $17,191

    27-Oct-09

    ZERBST ROBERT H
    Director

    N/A

    Direct

    Statement of Ownership

    N/A

    2-Oct-09

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Option Exercise

    N/A

    2-Oct-09

    MILLS JOSHUA ANANDA
    Officer

    120

    Direct

    Automatic Sale at $45 per share.

    $5,400

    1-Oct-09

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Option Exercise

    N/A

    1-Oct-09

    MILLS JOSHUA ANANDA
    Officer

    97

    Direct

    Automatic Sale at $45.82 per share.

    $4,444

    1-Oct-09

    STEIN A WILLIAM
    Officer

    376

    Direct

    Option Exercise

    N/A

    1-Oct-09

    STEIN A WILLIAM
    Officer

    376

    Direct

    Automatic Sale at $45.82 per share.

    $17,228

    22-Sep-09

    MILLS JOSHUA ANANDA
    Officer

    119

    Direct

    Option Exercise

    N/A

    22-Sep-09

    MILLS JOSHUA ANANDA
    Officer

    119

    Direct

    Automatic Sale at $45 per share.

    $5,355

    16-Sep-09

    GEOGHEGAN BERNARD
    Officer

    3,149

    Direct

    Option Exercise at $41.73 per share.

    $131,407

    16-Sep-09

    GEOGHEGAN BERNARD
    Officer

    4,650

    Direct

    Sale at $46.56 - $46.59 per share.

    $217,0002

    15-Sep-09

    SHAM EDWARD F
    Officer

    3,444

    Direct

    Option Exercise

    N/A

    15-Sep-09

    SHAM EDWARD F
    Officer

    3,444

    Direct

    Sale at $46.09 per share.

    $158,733

    8-Sep-09

    STEIN A WILLIAM
    Officer

    376

    Direct

    Option Exercise

    N/A

    8-Sep-09

    STEIN A WILLIAM
    Officer

    376

    Direct

    Automatic Sale at $44 per share.

    $16,544

    7-Aug-09

    MILLS JOSHUA ANANDA
    Officer

    2,600

    Direct

    Option Exercise

    N/A

    7-Aug-09

    MILLS JOSHUA ANANDA
    Officer

    2,600

    Direct

    Sale at $45.82 per share.

    $119,132

    7-Aug-09

    FOUST MICHAEL F
    Officer

    31,316

    Direct

    Option Exercise at $12 per share.

    $375,792

    7-Aug-09

    FOUST MICHAEL F
    Officer

    31,316

    Direct

    Sale at $44.55 per share.

    $1,395,127

    7-Aug-09

    SHAM EDWARD F
    Officer

    7,576

    Direct

    Option Exercise

    N/A

    7-Aug-09

    SHAM EDWARD F
    Officer

    7,576

    Direct

    Sale at $43.50 per share.

    $329,556

    5-Aug-09

    STEIN A WILLIAM
    Officer

    37,813

    Direct

    Option Exercise at $12 per share.

    $453,756

    5-Aug-09

    STEIN A WILLIAM
    Officer

    37,813

    Direct

    Automatic Sale at $44 per share.

    $1,663,772

    4-Aug-09

    STEIN A WILLIAM
    Officer

    36,000

    Direct

    Option Exercise at $12 per share.

    $432,000

    4-Aug-09

    STEIN A WILLIAM
    Officer

    36,000

    Direct

    Automatic Sale at $42 per share.

    $1,512,000

    30-Jul-09

    STEIN A WILLIAM
    Officer

    36,000

    Direct

    Option Exercise at $12 per share.

    $432,000

    30-Jul-09

    STEIN A WILLIAM
    Officer

    36,000

    Direct

    Sale at $40 per share.

    $1,440,000

    12-May-09

    CROSBY CHRISTOPHER JAMES JR
    Officer

    24,319

    Direct

    Option Exercise at $12 - $20.37 per share.

    N/A

    12-May-09

    CROSBY CHRISTOPHER JAMES JR
    Officer

    24,319

    Direct

    Sale at $36 per share.

    $875,484

    6-May-09

    EARLEY KATHLEEN
    Director

    1,000

    Direct

    Purchase at $37.26 per share.

    $37,260

    28-Apr-09

    CHAPMAN LAURENCE A
    Director

    1,000

    Direct

    Acquisition (Non Open Market) at $0 per share.

    N/A

    3-Apr-09

    PETERSON SCOTT E
    Officer

    64,935

    Direct

    Option Exercise

    N/A

    3-Apr-09

    PETERSON SCOTT E
    Officer

    64,935

    Direct

    Automatic Sale at $37 per share.

    $2,402,595

    2-Mar-09

    GEOGHEGAN BERNARD
    Officer

    4,637

    Direct

    Acquisition (Non Open Market) at $0 per share.

    N/A

    2-Mar-09

    TROUT JAMES
    Officer

    312

    Direct

    Option Exercise

    N/A

    2-Mar-09

    TROUT JAMES
    Officer

    312

    Direct

    Automatic Sale at $29.17 per share.

    $9,101

    25-Feb-09

    TROUT JAMES
    Officer

    1,335

    Direct

    Option Exercise

    N/A

    25-Feb-09

    TROUT JAMES
    Officer

    1,335

    Direct

    Automatic Sale at $28.35 per share.

    $37,847

    24-Feb-09

    GEOGHEGAN BERNARD
    Officer

    4,173

    Direct

    Acquisition (Non Open Market) at $0 per share.

    N/A

    2-Feb-09

    TROUT JAMES
    Officer

    313

    Direct

    Option Exercise

    N/A

    2-Feb-09

    TROUT JAMES
    Officer

    313

    Direct

    Automatic Sale at $31.15 per share.

    $9,749

    28-Jan-09

    MILLS JOSHUA ANANDA
    Officer

    5,396

    Direct

    Option Exercise

    N/A

    28-Jan-09

    MILLS JOSHUA ANANDA
    Officer

    5,396

    Direct

    Automatic Sale at $34 per share.

    $183,464

    28-Jan-09

    PETERSON SCOTT E
    Officer

    43,290

    Direct

    Option Exercise

    N/A

    28-Jan-09

    PETERSON SCOTT E
    Officer

    43,290

    Direct

    Automatic Sale at $34.50 per share.

    $1,493,505

    2-Jan-09

    TROUT JAMES
    Officer

    313

    Direct

    Option Exercise

    N/A

    2-Jan-09

    TROUT JAMES
    Officer

    313

    Direct

    Automatic Sale at $33.19 per share.

    $10,388

    29-Dec-08

    FOUST MICHAEL F
    Officer

    30,081

    Direct

    Option Exercise

    N/A

    17-Dec-08

    FOUST MICHAEL F
    Officer

    25,000

    Direct

    Option Exercise

    N/A

    17-Dec-08

    FOUST MICHAEL F
    Officer

    25,000

    Direct

    Sale at $32.12 per share.

    $802,999

    17-Dec-08

    PETERSON SCOTT E
    Officer

    20,204

    Direct

    Option Exercise at $12 per share.

    $242,448

    17-Dec-08

    PETERSON SCOTT E
    Officer

    20,204

    Direct

    Sale at $32 per share.

    $646,528

    17-Dec-08

    EARLEY KATHLEEN
    Director

    6,764

    Direct

    Option Exercise

    N/A

    16-Dec-08

    MILLS JOSHUA ANANDA
    Officer

    10,000

    Direct

    Option Exercise

    N/A

    16-Dec-08

    MILLS JOSHUA ANANDA
    Officer

    10,000

    Direct

    Sale at $31.64 per share.

    $316,400

    16-Dec-08

    STEIN A WILLIAM
    Officer

    30,000

    Direct

    Option Exercise

    N/A

    16-Dec-08

    STEIN A WILLIAM
    Officer

    30,000

    Direct

    Sale at $30.51 per share.

    $915,300

    16-Dec-08

    FOUST MICHAEL F
    Officer

    17,000

    Direct

    Option Exercise

    N/A

    16-Dec-08

    FOUST MICHAEL F
    Officer

    17,000

    Direct

    Sale at $30.15 per share.

    $512,550

    5-Dec-08

    MILLS JOSHUA ANANDA
    Officer

    1,250

    Direct

    Option Exercise

    N/A

    5-Dec-08

    MILLS JOSHUA ANANDA
    Officer

    1,250

    Direct

    Sale at $29.93 per share.

    $37,412

    2-Dec-08

    TROUT JAMES
    Officer

    120

    Direct

    Option Exercise

    N/A

    2-Dec-08

    TROUT JAMES
    Officer

    120

    Direct

    Automatic Sale at $24.52 per share.

    $2,942

    1-Dec-08

    TROUT JAMES
    Officer

    193

    Direct

    Option Exercise

    N/A

    1-Dec-08

    TROUT JAMES
    Officer

    193

    Direct

    Automatic Sale at $27.36 per share.

    $5,280

    25-Nov-08

    FOUST MICHAEL F
    Officer

    20,000

    Direct

    Option Exercise

    N/A

    25-Nov-08

    FOUST MICHAEL F
    Officer

    20,000

    Direct

    Sale at $27.08 per share.

    $541,600

    21-Nov-08

    MILLS JOSHUA ANANDA
    Officer

    5,000

    Direct

    Option Exercise

    N/A

    21-Nov-08

    MILLS JOSHUA ANANDA
    Officer

    5,000

    Direct

    Sale at $21.37 per share.

    $106,850

    20-Nov-08

    FOUST MICHAEL F
    Officer

    75,000

    Direct

    Option Exercise

    N/A

    20-Nov-08

    FOUST MICHAEL F
    Officer

    75,000

    Direct

    Sale at $23.23 per share.

    $1,742,250

    20-Nov-08

    ERNST RUANN FAYE
    Director

    6,448

    Direct

    Option Exercise

    N/A

    3-Nov-08

    TROUT JAMES
    Officer

    313

    Direct

    Option Exercise

    N/A

    3-Nov-08

    TROUT JAMES
    Officer

    313

    Direct

    Automatic Sale at $33.48 per share.

    $10,479

    28-Oct-08

    TROUT JAMES
    Officer

    12,153

    Direct

    Option Exercise at $12 per share.

    $145,836

    28-Oct-08

    TROUT JAMES
    Officer

    12,153

    Direct

    Automatic Sale at $27.52 per share.

    $334,450

    9-Oct-08

    TROUT JAMES
    Officer

    17,317

    Direct

    Option Exercise

    N/A

    9-Oct-08

    TROUT JAMES
    Officer

    17,317

    Direct

    Automatic Sale at $38.84 per share.

    $672,592

    7-Oct-08

    TROUT JAMES
    Officer

    12,987

    Direct

    Option Exercise

    N/A

    7-Oct-08

    TROUT JAMES
    Officer

    12,987

    Direct

    Automatic Sale at $39.31 per share.

    $510,518

    2-Oct-08

    TROUT JAMES
    Officer

    119

    Direct

    Option Exercise

    N/A

    2-Oct-08

    TROUT JAMES
    Officer

    119

    Direct

    Automatic Sale at $44.01 per share.

    $5,237

    2-Oct-08

    TROUT JAMES
    Officer

    12,987

    Direct

    Option Exercise

    N/A

    2-Oct-08

    TROUT JAMES
    Officer

    12,987

    Direct

    Automatic Sale at $43.99 per share.

    $571,298

    2-Oct-08

    CROSBY CHRISTOPHER JAMES JR
    Officer

    51,949

    Direct

    Option Exercise

    N/A

    2-Oct-08

    CROSBY CHRISTOPHER JAMES JR
    Officer

    51,949

    Direct

    Automatic Sale at $44 per share.

    $2,285,756

    2-Oct-08

    SHAM EDWARD F
    Officer

    7,577

    Direct

    Option Exercise

    N/A

    2-Oct-08

    SHAM EDWARD F
    Officer

    7,577

    Direct

    Automatic Sale at $44.01 per share.

    $333,463

    1-Oct-08

    TROUT JAMES
    Officer

    193

    Direct

    Option Exercise

    N/A

    1-Oct-08

    TROUT JAMES
    Officer

    193

    Direct

    Automatic Sale at $46.40 per share.

    $8,955

    1-Oct-08

    STEIN A WILLIAM
    Officer

    373

    Direct

    Option Exercise

    N/A

    1-Oct-08

    STEIN A WILLIAM
    Officer

    373

    Direct

    Automatic Sale at $46.40 per share.

    $17,307

    1-Oct-08

    GEOGHEGAN BERNARD
    Officer

    3,339

    Direct

    Statement of Ownership

    N/A

    19-Sep-08

    CHAPMAN LAURENCE A
    Director

    200

    Direct

    Automatic Sale at $50 per share.

    $10,000

    18-Sep-08

    CHAPMAN LAURENCE A
    Director

    5,000

    Direct

    Automatic Sale at $48 per share.

    $240,000

    11-Sep-08

    CROSBY CHRISTOPHER JAMES JR
    Officer

    8,691

    Direct

    Option Exercise

    N/A

    9-Sep-08

    MAGNUSON RICHARD A
    Director

    21,578

    Direct

    Option Exercise

    N/A

    9-Sep-08

    MAGNUSON RICHARD A
    Director

    21,578

    Direct

    Sale at $46.06 per share.

    $993,882

    8-Sep-08

    MAGNUSON RICHARD A
    Director

    179,860

    Direct

    Option Exercise

    N/A

    8-Sep-08

    MAGNUSON RICHARD A
    Director

    179,860

    Direct

    Sale at $46.06 per share.

    $8,284,351

    2-Sep-08

    TROUT JAMES
    Officer

    313

    Direct

    Option Exercise

    N/A

    2-Sep-08

    TROUT JAMES
    Officer

    313

    Direct

    Automatic Sale at $46.40 per share.

    $14,523

    2-Sep-08

    STEIN A WILLIAM
    Officer

    372

    Direct

    Option Exercise

    N/A

    2-Sep-08

    STEIN A WILLIAM
    Officer

    372

    Direct

    Automatic Sale at $46.40 per share.

    $17,260

    2-Sep-08

    SHAM EDWARD F
    Officer

    3,150

    Direct

    Option Exercise

    N/A

    2-Sep-08

    SHAM EDWARD F
    Officer

    3,150

    Direct

    Sale at $45.62 per share.

    $143,703

    18-Aug-08

    MILLS JOSHUA ANANDA
    Officer

    650

    Direct

    Option Exercise

    N/A

    18-Aug-08

    MILLS JOSHUA ANANDA
    Officer

    650

    Direct

    Sale at $45 per share.

    $29,250

    14-Aug-08

    FOUST MICHAEL F
    Officer

    31,316

    Direct

    Option Exercise at $12 per share.

    $375,792

    14-Aug-08

    FOUST MICHAEL F
    Officer

    31,316

    Direct

    Sale at $45.41 per share.

    $1,422,059

    14-Aug-08

    PETERSON SCOTT E
    Officer

    3,049

    Direct

    Option Exercise

    N/A

    14-Aug-08

    PETERSON SCOTT E
    Officer

    3,049

    Direct

    Sale at $45.47 per share.

    $138,638

    14-Aug-08

    MAGNUSON RICHARD A
    Director

    200,000

    Direct

    Option Exercise

    N/A

    14-Aug-08

    MAGNUSON RICHARD A
    Director

    200,000

    Direct

    Sale at $45.63 per share.

    $9,126,000

    4-Aug-08

    TROUT JAMES
    Officer

    120

    Direct

    Option Exercise

    N/A

    4-Aug-08

    TROUT JAMES
    Officer

    120

    Direct

    Automatic Sale at $42.99 per share.

    $5,158

    1-Aug-08

    TROUT JAMES
    Officer

    194

    Direct

    Option Exercise

    N/A

    1-Aug-08

    TROUT JAMES
    Officer

    194

    Direct

    Automatic Sale at $43.28 per share.

    $8,396

    1-Aug-08

    STEIN A WILLIAM
    Officer

    372

    Direct

    Option Exercise

    N/A

    1-Aug-08

    STEIN A WILLIAM
    Officer

    372

    Direct

    Automatic Sale at $43.28 per share.

    $16,100

    2-Jul-08

    TROUT JAMES
    Officer

    120

    Direct

    Option Exercise

    N/A

    2-Jul-08

    TROUT JAMES
    Officer

    120

    Direct

    Automatic Sale at $42 per share.

    $5,040

    1-Jul-08

    TROUT JAMES
    Officer

    193

    Direct

    Option Exercise

    N/A

    1-Jul-08

    TROUT JAMES
    Officer

    193

    Direct

    Automatic Sale at $40.55 per share.

    $7,826

    1-Jul-08

    STEIN A WILLIAM
    Officer

    371

    Direct

    Option Exercise

    N/A

    1-Jul-08

    STEIN A WILLIAM
    Officer

    371

    Direct

    Automatic Sale at $40.55 per share.

    $15,044

    16-Jun-08

    SHAM EDWARD F
    Officer

    2,350

    Direct

    Option Exercise

    N/A

    16-Jun-08

    SHAM EDWARD F
    Officer

    2,350

    Direct

    Sale at $42.64 per share.

    $100,204

    11-Jun-08

    CROSBY CHRISTOPHER JAMES JR
    Officer

    30,153

    Direct

    Option Exercise at $12 - $20.37 per share.

    N/A

    11-Jun-08

    CROSBY CHRISTOPHER JAMES JR
    Officer

    30,153

    Direct

    Sale at $41.54 - $41.61 per share.

    $1,254,0002

    2-Jun-08

    TROUT JAMES
    Officer

    314

    Direct

    Option Exercise

    N/A

    2-Jun-08

    TROUT JAMES
    Officer

    314

    Direct

    Automatic Sale at $41.90 per share.

    $13,156

    2-Jun-08

    STEIN A WILLIAM
    Officer

    371

    Direct

    Option Exercise

    N/A

    2-Jun-08

    STEIN A WILLIAM
    Officer

    371

    Direct

    Automatic Sale at $41.90 per share.

    $15,544

    29-May-08

    MILLS JOSHUA ANANDA
    Officer

    421

    Direct

    Sale at $42.90 per share.

    $18,060

    28-May-08

    FOUST MICHAEL F
    Officer

    25,000

    Direct

    Sale at $41.95 per share.

    $1,048,750

    21-May-08

    MILLS JOSHUA ANANDA
    Officer

    1,921

    Direct

    Option Exercise

    N/A

    21-May-08

    MILLS JOSHUA ANANDA
    Officer

    1,500

    Direct

    Sale at $41.96 per share.

    $62,940

    15-May-08

    FOUST MICHAEL F
    Officer

    21,002

    Direct

    Option Exercise

    N/A

    15-May-08

    FOUST MICHAEL F
    Officer

    20,000

    Direct

    Sale at $42.09 per share.

    $841,800

    15-May-08

    MAGNUSON RICHARD A
    Director

    200,000

    Direct

    Option Exercise

    N/A

    15-May-08

    MAGNUSON RICHARD A
    Director

    200,000

    Direct

    Sale at $41.96 per share.

    $8,392,000

    8-May-08

    STEIN A WILLIAM
    Officer

    370

    Direct

    Option Exercise

    N/A

    8-May-08

    STEIN A WILLIAM
    Officer

    370

    Direct

    Automatic Sale at $40 per share.

    $14,800

    2-May-08

    TROUT JAMES
    Officer

    1,437

    Direct

    Option Exercise

    N/A

    2-May-08

    TROUT JAMES
    Officer

    1,437

    Direct

    Automatic Sale at $39.55 per share.

    $56,833

    1-May-08

    TROUT JAMES
    Officer

    194

    Direct

    Option Exercise

    N/A

    1-May-08

    TROUT JAMES
    Officer

    194

    Direct

    Automatic Sale at $38.59 per share.

    $7,486

    18-Apr-08

    STEIN A WILLIAM
    Officer

    10,590

    Direct

    Option Exercise

    N/A

    18-Apr-08

    STEIN A WILLIAM
    Officer

    10,590

    Direct

    Automatic Sale at $40 per share.

    $423,600

     

     

     

     

    Data provided by EDGAR Online

     

    Catalyst

      Back to top