Shares of Franklin BSP Realty Trust Inc (FBRT) plummeted 5.02% in Thursday's intraday trading session following the release of the company's third-quarter earnings report, which highlighted several concerns for investors.

The real estate investment trust reported distributable earnings of $0.22 per fully converted share, which fell short of covering the company's dividend. This underperformance was a key factor in the decline of the company's book value per share during the quarter. Management attributed the decrease to both dividend under coverage and the impact of the recent NewPoint acquisition.

Adding to investor worries, the company revealed that a position on its watch list was marked down by $2.3 million due to expectations of a short sale in the fourth quarter. This development suggests ongoing challenges within the company's loan portfolio.

Despite record origination volume driven by the NewPoint acquisition, management noted "slight margin tightening" on the large transaction that contributed to the strong numbers. This indicates potential pressure on profitability even as the company expands its operations.

While Franklin BSP Realty Trust highlighted positive developments, including the successful integration of NewPoint and progress on resolving legacy issues, the market's negative reaction suggests investors remain cautious about the company's near-term prospects and ability to maintain its dividend.