VEREIT’s Legal Headwind Is Nearly Over
The name VEREIT (NYSE: VER) is supposed to make investors think of the Latin word "veritas," which basically translates to "truth" today. At first blush, that may seem like a funny name for a real estate investment trust (REIT) that has been dealing with the fallout from an accounting scandal since late 2014. Changing the name to VEREIT was, in fact, the first in a long series of steps to put the issue behind the company. Roughly five years later, it is getting close to finally shutting the door on that ugly episode. As it does, the future is starting to look a lot brighter. Here's what you need to know today.
Before the accounting issue, VEREIT was known as American Realty Capital Properties. The REIT's business model could be summed up as "growth at any cost," as it quickly gobbled up peers to create a giant net lease portfolio (lessees of these properties pay most of the operating costs). This approach led to a heavy debt load, an ungainly portfolio of assets, and a culture that made fudging the numbers seem like a good choice. When the accounting issue -- which amounted to a few pennies a share -- erupted, the stock plummeted, new leaders were brought on board, and the dividend was suspended.
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Source Fool.com
