Sahm Adrangi Reveals Why Kerrisdale Capital Is Shorting The St. Joe CompanyAugust 9, 2018 - Author: steph
Sahm Adrangi is letting investors know that while the St. Joe Company and its $1 billion evaluation may appear to be exciting on the surface, it is really over-valued. He has been dismissing efforts to build buzz around the company, and his company Kerrisdale, where he serves as chief information officer, has been trying to warn investors that the St. Joe Company’s true value is just a bit above half of what is being reported. The value of the company has been rising due to reports that it is trying to develop one of the world’s greatest retirement communities.
The problem with this, according to Kerrisdale and Sahm Adrangi, is that the land that the St. Joe Company is targeting to develop for the project is actually remote, swampy, and is not realistically going to be undergoing development any time in the near-future. Sahm Adrangi has made it clear that there is no development or plans to develop the swampy land into anything anytime soon. The truth is that there has been barely any activity, at all, related to developing the land. This means that there have been zero public hearings and there have been no filed permits.
Sahm Adrangi has revealed that the St. Joe Company has already developed a large part of the best land that it owns near the beach and that the market may be saturated in the area where its other land is located. On top of these issues, Fairholme Fund owns 22.7 million shares of St. Joe Company’s stock, and the company plans on limiting its illiquid investments, which is leading the Fairholme Fund to close to half of its holdings in the St. Joe Company. This will be happening over roughly a five month period, which can definitely have an effect on the overall value of the stock. Sahm Adrangi has also revealed that the manager of its funds, Bruce Berkowitz, sits as chairman of the board for the St. Joe Company along with a couple of other directors from Fairholme. This, obviously, can breed conflicts of interest and litigation could be forthcoming.