MKZR

Mackenzie Realty ($MKZR) Executives Go 'All-In' on 90% Stock Collapse - Turnaround Signal?

08/25/2025 15:55

Mackenzie Realty Capital ($MKZR) is drawing investor attention as unprecedented insider buying continues amid severe financial distress. While this small-cap REIT has seen its stock plummet to around $5 in August, key executives including the CEO have been aggressively purchasing shares, sending a powerful bottom signal. Mackenzie Realty Capital is a diversified REIT headquartered in Orinda, California, focused on multifamily residential properties and boutique Class A office buildings along the U.S. West Coast. Established in 2013, the company maintained annual dividends until suspending them in Q3 2025 due to financial constraints. The portfolio currently includes interests in 4 multifamily properties, 8 office properties, and 2 multifamily developments. The most striking development is the concentrated insider buying activity in August. From August 6-21, four key executives - CCO Jeri Bluth, CFO Angche Sherpa, Officer Charles Patterson II, and Officer Christine Simpson - repeatedly purchased identical quantities at identical prices in synchronized patterns. On August 6, each bought 22,559 shares at $4.31; on August 7, 7,949 shares at $4.64; and on August 8, 2,000 shares at $4.44. This appears to represent collective purchases through MPF Successors LP, an investment vehicle where each executive holds interests, creating indirect company ownership. Even more impressive is CEO Robert Dixon's persistent buying throughout 2025. He has purchased shares 15 times since January, with concentrated buying during the stock's darkest moments when prices fell to $2-3 range. Between January 16-21, he bought 40,000 shares across three consecutive days, and in March alone, accumulated over 90,000 shares, demonstrating unwavering conviction. This executive buying isn't mere gesture. The company faces serious challenges with a market cap of just $9.2 million and debt-to-equity ratio of 132.82%. Trailing twelve-month net losses totaled $23.53 million with diluted EPS of -$17.20. The current ratio of 0.55 indicates potential short-term liquidity concerns. However, investors shouldn't overlook positive signals. EBITDA remains positive at $7.57 million, indicating core operations can generate cash. The company recently secured $12.5 million in new loans to support refinancing and growth initiatives, and announced plans to acquire waterfront property in Suisun. The 1-for-10 reverse split effective August 1-2 deserves attention. Rather than simple price manipulation, this strategic move helps maintain Nasdaq listing requirements. The timing of massive insider buying immediately following the split suggests management views current levels as attractive entry points. From a valuation perspective, $MKZR represents classic 'deep value' territory. With P/B ratio of 0.13, shares trade at 87% discount to book value, while P/S ratio of 0.38 is extremely low. Current prices represent over 90% decline from 52-week highs of $55, indicating severe panic selling. Risks remain substantial. High debt levels increase interest rate sensitivity, and continued real estate market weakness could pressure asset values. Persistent operating losses pose ongoing capital erosion risks. Nevertheless, the current situation may appeal to risk-tolerant investors seeking high-risk, high-reward opportunities. When executives put their own money into aggressive share purchases, it typically reflects strong conviction based on inside information. CEO Dixon's expansion of holdings to over 6% through MPF represents genuine investment judgment beyond mere compensation or option exercises. Near-term catalysts include September quarterly results and refinancing progress updates. If EBITDA remains positive and debt restructuring advances, the severely undervalued stock could see substantial recovery. Conversely, deepening liquidity crisis or forced asset sales could trigger further declines. The key investment question is whether executive buying represents 'catching a falling knife' or 'picking up pearls.' Current patterns suggest the latter, as management has consistently stepped up purchases during each market capitulation phase.