Feldman Mall Properties, Inc. (NYSE:FMP) shares moved down $0.14, or 1.18%, to $11.69 in today's trading after Mercury Real Estate Advisors LLC again demanded that the company immediately hire an investment banker and put itself up for sale in a Schedule 13D/A filing with the SEC. In December, the hedge fund filed their initial Schedule 13D with the SEC requesting inclusion in the company's next proxy statement and recommending that the company's consider putting itself up for sale. They supported this request with the following:

1. The corporation has failed to match returns reflected by certain industry benchmarks. Since going public on December 15, 2004, the corporation has posted a total return of negative 4.79%. The MSCI US REIT Index has achieved a total return of positive 55.77% over this same period. This reflects substantial underperformance of 60.53%.
2. The corporation lacks the sufficient size required to operate as a public company. In our view, shareholders’ equity is being wasted on general and administrative expenses that are not commensurate with the size of the company. General and administrative expenses at the corporation totaled 13.6% of revenues during fiscal 2005 while the ratio of G&A to revenues in the Corporation’s Peer Group average 4.3%.
3. The corporation has suffered a series of earnings misses and downward revisions to guidance. The first downward revision of guidance came in November 2005 with regards to third quarter 2005 results. The corporation lowered FFO/share guidance 17% from a range of $0.28-$0.30 to $0.23-$0.25. Fourth quarter 2005 FFO/share guidance was also lowered from a range of $0.25-$0.27 to $0.17-$0.18. This is a 32% decrease from the guidance that was offered just a few months prior. In our view, management has lost credibility with investors as a result of being overly optimistic and not realistic on a number of occasions.
4. The corporation is an attractive acquisition candidate for a national or regional mall owner/operator. While we believe that the corporation is too small to generate economies of scale with its widely dispersed portfolio, several of the national or regional owner/operators could achieve operating synergies through an acquisition of the corporation. Further, we believe the corporation is trading at a significant discount to its intrinsic or liquidation value.
   

Since then, the hedge fund said that it had received numerous inquiries from well known and established, national and regional mall owners and operations interested in exploring a purchase of the company and its assets. Given that the company trades at a significant discount to its liquidation value, Mercury Real Estate Advisors continues to insist that a sale of company is the best course of action to maximize shareholder value. Moreover, Mercury Real Estate Advisors' willingness to put itself on the next proxy statement illustrates their motivation to make this happen. Combined, these factors make this a great stock to watch for opportunistic investors!

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