The Activist Case for Winding Down a Struggling Mortgage Lender

Every so often, a company’s own shareholders decide that patience has run out. When that happens, one of them may go public with a letter to the board, laying out what it believes is going wrong and what should change. This is shareholder activism, and it has become a regular feature of public markets. It tends to surface at companies whose shares trade for far less than the value of what they own, because that gap is where an outside investor sees a chance to force action.

The playbook is fairly consistent. An investor builds a stake, studies the company closely, and presses management in private before taking the argument public if it feels ignored. Sometimes the goal is board seats, sometimes a sale, sometimes a change in how cash gets spent. Most of these disputes now end in a negotiated settlement rather than a bruising shareholder vote, and the pace has picked up: activists launched more campaigns in the first half of 2026 than in the same stretch a year earlier, with demands to sell or break up companies especially common.

Financial companies are a natural target for this kind of pressure. A lender that has been shrinking, writing down loans, and posting losses can end up valued by the market at a small fraction of its stated net worth. To an activist, that discount is not just a bargain but an argument. If the assets are worth more than the share price implies, the reasoning goes, management should stop chasing growth, sell what it holds, return the proceeds, and let shareholders capture the difference.

That is the backdrop for a letter that landed this week. The Dallas investment firm Palogic Value Fund made exactly that case to the board of Granite Point Mortgage Trust Inc. (NYSE: GPMT). Granite Point is an internally managed real estate finance company that makes and manages senior floating-rate commercial mortgage loans across the United States, aimed at middle-market and transitional properties. Palogic, which says it owns more than a million shares, argues that the company’s current plan no longer serves ordinary shareholders. 

The heart of the complaint is a long slide in value. Palogic points out that Granite Point’s book value per share, an accounting measure of what each share is theoretically worth, fell from $17.27 in mid-2021 to $5.70 by mid-2026. The stock did far worse, dropping roughly 89.8% over the same five years. Their shares are trading near $1.16, only about 21% of that reported book value. In plain terms, the market doubts much of that remaining worth will ever reach shareholders. 

The letter goes further than the share price. It notes that troubled loans have spread beyond office buildings, the property type most expected to struggle after the pandemic, into hotels, mixed-use, and apartment lending, which Palogic reads as a sign of weak underwriting rather than one bad sector. It flags reserves equal to 47.4% against the five riskiest loans, and traces how the business has contracted, with total assets falling from about $3.9 billion to roughly $1.4 billion and net interest income dropping from $22.7 million to $4.7 million while overhead stayed high.

So what does Palogic actually want? Rather than a sale of the whole company, it asks the board to manage the business down in an orderly way: resolve old loans faster, sell loans one at a time or in bundles, hire outside servicers to lower costs, and cut corporate expenses. It also wants the company to stop making new loans and to send cash back to shareholders instead. Palogic does credit management for recent steps, including a refinancing of its two legacy loan pools. 

Whether the board bends is the open question. Management has said it wants to resume lending and rebuild earnings, which is close to the opposite of the wind-down Palogic is asking for, so the two sides are starting from genuinely different views of what the company is for. From here the path usually runs one of a few ways: a polite reply that changes little, private talks that produce a few concessions, or a public fight that escalates toward a proxy contest. What makes this case worth following is the math behind it. When a stock trades at roughly a fifth of its stated book value, the argument is no longer really about strategy in the abstract; it is about whether the people running the company can close that gap faster than an outsider thinks they can. That is a test the board now has to answer in full view of its shareholders.