Presidio Property Plummets 32%—What's Driving the Freefall?

• SQFT slumps 32.7% to $9.15, hitting an intraday low of $8.55.
• Announces $2.05M equity offering at $12/share—27% above current price.
• Warrant exercise price slashed to $12, extending expiration by five years.
• Sector (Real Estate) sees mixed signals as Prologis (PLD) ekes out -0.42%.

A dramatic day for Presidio Property Trust as its shares collapse under the weight of dilutive capital raising, while broader real estate markets show muted volatility ahead of Federal rate decisions.

Dilution Fears and Pricing Paradox Spark Rout
The stock's precipitous decline stems directly from Presidio's registered direct offering priced at $12—27% above its current trading level. Investors reacted negatively to the combination of immediate dilution and the repricing of existing warrants to $12, signaling urgent liquidity needs. The offering's premium to current prices suggests management views the stock as undervalued, but shareholders face an immediate 27% haircut relative to the new issue price. The warrant amendment further highlights capital constraints, as the company seeks to incentivize future exercises at lower strike prices.

Bullish Technicals Clash with Bearish Fundamentals—Options Spotlight
• RSI: 89.67 (deep overbought, signaling potential pullback)
• Bollinger Bands: Upper at $9.22 (resistance), Middle at $5.22 (key support)
• MACD: 0.916 vs Signal 0.411 (bullish histogram widening)
• 200-day MA: $1.56 (far below current price)

Technical Setup: Short-term overbought conditions suggest a near-term correction toward $8.70 (50% of day's range). However, the bullish MACD divergence and proximity to $9.22 resistance could fuel a rebound. Aggressive traders might consider:
- SQFT20251219P7.5 Put Option: Strike $7.50, expires 2025-12-19
▪ Implied Volatility: 15.10% | Delta: -0.015 | Gamma: 0.042
▪ Leverage Ratio: 1,816% (extreme risk/reward)
▪ Payoff at $8.00 (5% drop): $0.50 intrinsic value vs current $0.00 price
- Leveraged Play: Short SPDR S&P 1500 REIT ETF (RWR) at 3x leverage via inverse ETNs if broader sector weakness emerges.

Action Alert: Fade the overbought RSI to $8.70 before considering bullish setups. The $7.50 put offers asymmetric risk if fundamentals deteriorate further.

Backtest Presidio Property Stock Performance
The Backtest of the SQFT performance after a -33% intraday plunge shows mixed results. While the 3-Day win rate is 43.15%, the 10-Day win rate is 42.68%, and the 30-Day win rate is 41.08%, indicating a higher probability of positive returns in the short term. However, the maximum return during the backtest period was only 0.06%, with a maximum return day at 18, suggesting that even in the short term, the gains were modest.

SQFT's Liquidity Crisis Unfolds—Time to Exit or Double Down?
Investors face a stark choice: accept dilution and bet on management’s capital plan, or exit amid extreme valuation divergence between the offering and current market. The RSI overhang suggests near-term downside toward $8.70, with critical support at $8.55. While Prologis (PLD) holds up modestly, SQFT’s fundamentals—marked by 71% turnover and a 1.63 P/E—highlight operational strain. Watch for post-offering trading patterns and warrant exercise activity. Final Call: Exit longs below $9.00; consider the $7.50 put for downside protection if balance sheet concerns dominate.