RC

Ready Capital is a multi-strategy LMM/SBA commercial real-estate lender in the middle of a painful de-risking, and the numbers show it: two straight years of losses (FY2024 -$430M, FY2025 -$221M), negative retained earnings of -$808M, ROE of -14.3%, and a balance sheet that shrank 23.4% in a year to $7.77B as management dispositioned assets (including the June 2025 sale of the Residential Mortgage Banking segment, now a discontinued operation). The 45% cut in dividends paid to $113M is the clearest tell that the board sees distributable earnings under pressure — a serious signal for a REIT whose entire appeal to retail is the yield. On quality alone this is a sell/avoid business: unprofitable, deleveraging, with leverage still at 3.96x liabilities/equity.

What stops me short of sell is the price. At $1.79 the market cap is roughly $292M against $1.54B of stockholders' equity — about 0.19x book, or a book value near $9.45/share. That extraordinary discount means the market has already written off the carrying value of much of the loan book, so a fresh 'sell' call here is largely betting that book value evaporates from an already-crushed base. The MD&A frames the strategy as originating and holding performing LMM loans while working out non-performing loans acquired at a discount; FY2025 operating cash flow was actually positive at $432M and cash rose 44.5% to $208M, and the net loss narrowed 48.6% YoY — tentative signs the bleed is slowing rather than accelerating.