MKZR

MacKenzie Realty ($MKZR) Executives' $1.4M Bottom-Fishing Spree Continues as Stock Plunges 85%

08/13/2025 22:34

MacKenzie Realty Capital Inc ($MKZR) executives are conducting a massive buying spree as the company's stock price hits annual lows, drawing significant investor attention. Particularly noteworthy is that all senior executives simultaneously purchased shares immediately after the 1-for-10 reverse stock split in early August, even as the stock price continued to decline—an exceptionally unusual phenomenon. Based in Orinda, California, MacKenzie Realty Capital is a Real Estate Investment Trust (REIT) specializing in multifamily residential properties and boutique Class A office buildings on the U.S. West Coast. Founded in 2013, the company maintains a portfolio of 4 multifamily properties, 8 office properties, and 2 multifamily development projects, adhering to a mandate of investing at least 80% of assets in real estate. Insider trading data reveals that CEO Robert Dixon has been consistently purchasing company shares since January. Starting with 25,000 shares purchased between January 16-17 at an average of $2.70, he accumulated over 150,000 shares through March at an average price around $1.70. The pattern shows increasingly aggressive buying as prices declined. More striking is the concentrated buying activity from August 6-13. Key executives including CFO Angche Sherpa, Officer Christine Simpson, Officer Charles Patterson II, and CCO Jeri Bluth all purchased identical quantities on the same dates at identical prices. Analysis suggests these represent collective purchases through MPF Successors LP, with one transaction reported under multiple executive names. On August 6, each purchased 22,559 shares; August 7 saw 7,949 shares each; followed by 2,000 and 1,198 shares on August 8 and 12 respectively. Average purchase prices ranged from $4.31 to $4.92, adjusted for the 1-for-10 reverse split implemented August 4. Their total purchases exceeded $1.4 million. Despite this aggressive executive buying, the stock's decline has continued unabated. From around $33 in early November 2024, shares plummeted in January 2025 and have continued falling to $4.96 as of August 12—approximately 85% below year-to-date peaks. This severe decline reflects the company's dire financial condition. Trailing twelve-month revenue of approximately $23.04 million decreased 1.3% year-over-year, while net losses reached $23.53 million—a staggering -96.2% profit margin. Operating margin stands at -87.6%, deep in red territory. Debt-to-equity exceeds 130% with a current ratio of just 0.55, indicating severe liquidity constraints. Crucially for a REIT, the company suspended quarterly dividends as part of financial restructuring—breaking its tradition of annual dividends since inception and signaling urgent cash preservation needs. However, some positive indicators emerge. Levered free cash flow remains positive at $6.02 million, suggesting capacity for debt service or growth investment. Book value per share of $42.35 stands over 8x current market price, indicating extreme asset undervaluation relative to current trading levels. The company is actively strengthening its portfolio through planned acquisitions of waterfront property in Suisun, California, and development of projects like Aurora at Green Valley. In June, it completed refinancing of the Main Street West property loan, demonstrating active debt management. For investors, the key question is whether this unprecedented executive buying represents desperate gambling or opportunistic value capture. With debt-to-equity above 130% and 96% loss margins, the financial distress is extreme. Yet the $42 book value versus $5 market price presents an intriguing valuation gap. The 0.55 current ratio signals significant near-term funding pressure, potentially requiring asset sales or external financing for stability. Small-cap characteristics also mean limited liquidity and high volatility potential. Key forward indicators include next quarter's operational loss improvement, development project progress, and additional refinancing success. Whether executive buying triggers price recovery or continues amid further declines will be crucial to monitor.