Form 4: Stilwell Entities Disclose Significant WHLR Holdings

Joseph Stilwell and affiliated entities report substantial beneficial ownership in Wheeler Real Estate Investment Trust, including common stock and convertible notes.

Summary

• Joseph Stilwell, a Director and 10% owner of Wheeler Real Estate Investment Trust, Inc. (WHLR), along with several affiliated entities (Stilwell Value LLC, Stilwell Activist Investments, L.P., Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Associates, L.P.), have filed a Form 4.
• The filing details their beneficial ownership of WHLR common stock, 7.00% Subordinated Convertible Notes due 2031, Series D Cumulative Convertible Preferred Stock, and Series B Convertible Preferred Stock.
• As of December 31, 2025, the Stilwell entities collectively own 57,100 shares of common stock directly.
• They also hold convertible notes that can be converted into a total of 11,651,819 shares of common stock at a conversion price of $1.895028 per share, with an aggregate principal value of $22,080,525.
• Interest on the 7.00% Subordinated Convertible Notes due 2031, payable on December 31, 2025, was paid in Series D Preferred Stock, with a per share value of $20.789285.
• The Series D Preferred Stock held by the entities totals 146,140 shares, convertible into common stock at an extremely high conversion price of $170,956,800 per share of common stock, effectively yielding zero common shares.
• The Series B Convertible Preferred Stock held by the entities totals 761,466 shares, convertible into common stock at an extremely high conversion price of $403,200,000 per share of common stock, also effectively yielding zero common shares.
• Joseph Stilwell disclaims beneficial ownership of all indirectly owned securities except to the extent of his pecuniary interest.

Sentiment

Score: 6

Explanation: The filing is a standard disclosure of beneficial ownership by a director and affiliated entities. The significant holdings, particularly in convertible notes, indicate a substantial long-term investment. However, the extremely high conversion prices for the preferred stock classes introduce complexity and suggest limited direct equity upside from those specific instruments, which could be viewed neutrally to slightly negatively depending on the investor's perspective on the overall capital structure.

Positives

• Significant insider ownership by a director and affiliated investment funds, potentially indicating alignment of interests with shareholders.
• The holding of convertible notes suggests a long-term investment perspective and potential for future equity conversion at a specified price.

Negatives

• The extremely high conversion prices for Series D ($170,956,800 per common share) and Series B ($403,200,000 per common share) Preferred Stock mean these shares are practically non-convertible into a meaningful number of common shares, limiting their direct upside from common stock price appreciation.
• The payment of interest on the 7.00% Subordinated Convertible Notes in Series D Preferred Stock rather than cash or common stock could suggest liquidity management considerations for the issuer.

Risks

• The complex capital structure, including multiple classes of convertible preferred stock with effectively non-convertible terms and subordinated convertible notes, makes it challenging for investors to accurately assess the company's true equity value and potential future dilution.
• The very high conversion prices of the Series B and D Preferred Stock mean that these securities offer negligible direct upside from common stock price appreciation, effectively acting more like fixed-income instruments with a highly theoretical equity conversion option.

Future Outlook

The filing is a disclosure of current beneficial ownership and does not contain explicit forward-looking statements or guidance from the issuer or reporting persons regarding future performance or strategy, beyond the conversion terms and maturity dates of the derivative securities.

Management Comments

• "Joseph Stilwell disclaims beneficial ownership of all securities reported as owned indirectly except to the extent of his pecuniary interest therein."

Industry Context

This Form 4 filing reflects a significant insider and institutional ownership stake in a Real Estate Investment Trust (REIT). Such filings are common for active investors and directors in the REIT sector, which often features complex capital structures including various classes of preferred stock and convertible debt. The nature of these holdings suggests a long-term investment in the company's underlying real estate assets and cash flows, typical for REIT investors.

Related Party Transactions

• The filing details indirect beneficial ownership by Joseph Stilwell, a director, through various affiliated investment entities (Stilwell Value LLC, Stilwell Activist Investments, L.P., Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Associates, L.P.).

Stakeholder Impact

• Shareholders: The significant beneficial ownership by Joseph Stilwell and his affiliated entities suggests strong alignment of interests between a key director/investor and the company's performance. However, the complex capital structure with various preferred shares and convertible notes could impact common shareholders' understanding of dilution and equity value.
• Creditors: The existence of subordinated convertible notes indicates a layer of debt that can convert to equity, potentially reducing future debt obligations but also adding to the equity base.

Next Steps

• The 7.00% Subordinated Convertible Notes due 2031 are convertible at the option of the holders at any time until their expiration date of December 31, 2031.

Key Dates

Recommendation

This Form 4 primarily serves as a disclosure of existing beneficial ownership by a director and affiliated entities, rather than a transaction report. While the substantial holdings, particularly in convertible notes, indicate a significant long-term investment and potential alignment of interests, the filing itself does not provide new operational or financial performance data to warrant a change in investment stance. The complex nature of the preferred stock conversion terms also requires careful consideration, but without further context on the company's financial health or strategic direction, a 'hold' recommendation is appropriate based solely on this disclosure.

Keywords

Wheeler Real Estate Investment Trust, WHLR, Joseph Stilwell, Form 4, Beneficial Ownership, Insider Ownership, Convertible Notes, Preferred Stock, SEC Filing, Real Estate Investment Trust, REIT