Shares of commercial real estate lender Starwood Property Trust (NYSE:STWD) fell 4.5% in the afternoon session after the company priced a public offering of 25.5 million shares of its common stock. The offering is expected to raise approximately $508 million in gross proceeds, which could increase to around $584 million if the underwriters exercise their option to purchase an additional 3.8 million shares. This move often leads to a temporary drop in a stock's price because the issuance of new shares can dilute the ownership stake of existing shareholders. Starwood intends to use the net proceeds to partially fund its recently announced $2.2 billion acquisition of Fundamental Income Properties, a net lease real estate platform. The remainder of the acquisition will be funded through a combination of cash and debt. While the acquisition is expected to be accretive to distributable earnings, the immediate impact of the stock offering is shareholder dilution.
Wrapping up Q1 earnings, we look at the numbers and key takeaways for the thrifts & mortgage finance stocks, including Starwood Property Trust (NYSE:STWD) and its peers.
Commercial real estate lender Starwood Property Trust (NYSE:STWD) reported Q1 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 16.9% year on year to $170.3 million. Its non-GAAP profit of $0.45 per share was in line with analysts’ consensus estimates.
Wall Street’s bearish price targets for the stocks in this article signal serious concerns.
Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Wall Street traded slightly lower by midday Friday, as investors adopted a wait-and-see stance ahead of a potential trade breakthrough, with high-stakes negotiations between U.S. officials—led by Treasury Secretary Scott Bessent—and Chinese authorities set to unfold over the weekend.
