Grubb & Ellis (GBE) Reports Third Quarter Results and Gives Substantially Lower 2010 EBITDA Projection!

From today's press release:

For the quarter ended Sept. 30, 2010, the company expects to report revenue of approximately $144 million and negative adjusted EBITDA of approximately $3 million. 

The company believes that, while it remains on track to meet its full-year revenue guidance, it no longer expects to achieve its previously announced full-year adjusted EBITDA target of $10 million to $15 million. Full-year adjusted EBITDA for 2010 is now expected to be negative...

"Our prior full-year guidance assumed a higher level of activity than we are currently experiencing in our Investment Management segment," said Thomas P. D'Arcy, president and chief executive officer of Grubb & Ellis. "Due to this weakness and the uneven economic recovery, we are maintaining our full-year revenue target but withdrawing our adjusted EBITDA expectation for 2010."

Aha! I knew they would not be able to achieve the "previously announced" EBITDA target!

Note that the EBITDA numbers are before the inclusion of the dividend on the company's preferred stock, which is senior to the common and carries a 12% coupon.

As I've said before,

Can we agree that a company's capital structure could have so much preferred stock, carrying such a large dividend obligation, that the equity beneath it is worthless?

I don't know why GBE has an almost nine-figure market cap. I just don't see how the equity can have any value.