NEW YORK (TheStreet) -- Shares of RCS Capital Corp (RCAP) are plummeting, sharply down 16.22% to $9.71 on heavy trading volume Thursday morning, as the holding company is being sued by real estate investment trust American Realty Capital Properties (ARCP) for allegedly backing out of a deal to buy Cole Capital, Bloomberg reported late yesterday.
The largest U.S. owner of single-tenant buildings American Realty is suing investment partner RCS Capital through Delaware chancery court in Wilmington, alleging that it wrongly terminated an agreement to buy its private capital management business Cole Capital for at least $700 million, Bloomberg added.
About 1.41 million shares of the New York City-based RCS Capital were traded as of 10:25 a.m., compared to the normal trading volume of 1.32 million shares a day.
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Separately, TheStreet Ratings team rates RCS CAPITAL CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate RCS CAPITAL CORP (RCAP) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."