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Blackstone’s past statements came into question on Dec. 6, 2023, when Carson Block, Founder of famed activist short seller Muddy Waters Capital, released a new episode of the Chopping Block on Zer0es.TV entitled, “Blackstone’s Wile E. Moment.”
Block stated that BXMT could be at risk of a liquidity crisis. Block explained that Muddy Waters believes that 70%-75% of BXMT’s borrowers may be unable to cover interest expenses. With billions of dollars of interest rate hedges set to terminate next year, according to Block, the recent decline in commercial real estate values will only exacerbate the issues for troubled borrowers whose loans will mature over the next twelve months.
Block concludes that this risky portfolio will likely adversely impact BXMT’s probability and lead to a significant reduction to its dividend as soon as the second half of 2024.
These events have caused the price of BXMT shares to decline sharply.
