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And Some Bad News For David Einhorn...

Tyler Durden's picture





 

The St. Joe Company has just announced it has engaged Morgan Stanley to pursue "strategic alternatives to enhance shareholder value." Of course, since every bank has a bankruptcy advisory team as well, there is a very off chance this could be good news for the Greenlighter. However judging by the 10k $32.88 print in AH, we are leaning toward the former. As we warned back in October when Einhorn was recirculating his noted short thesis for the second time after a 3 year hiatus (which everyone somehow had forgotten), there is a very high probability that the short thesis, which was merely a regurgitation of the original one, could end up crashing and burning. To all who followed Einhorn into what, with 27 million shares short, is about to become a massive short covering squeeze inferno (not to say that Greenlight has not had its share of good ideas over the year), our condolences.

From the just issued press release:

WATERSOUND, Fla.--(BUSINESS WIRE)--
The St. Joe Company (NYSE:JOE - News) today announced that its Board of
Directors has unanimously decided to explore financial and strategic
alternatives to enhance shareholder value.

The Board intends to consider the full range of available options
including a revised business plan, operating partnerships, joint
ventures, strategic alliances, asset sales, strategic acquisitions and a
merger or sale of the Company. The Board of Directors has retained
Morgan Stanley & Co. Incorporated to assist it in the evaluation of
these alternatives. The Company noted that there can be no assurance
that the exploration of strategic alternatives will result in any
transaction.

Britt Greene, St. Joe's President and CEO, said, “We have engaged Morgan
Stanley to undertake a comprehensive and thorough review of all
available alternatives, and our Board and management are committed to
taking the appropriate and necessary actions to enhance value for St.
Joe shareholders.”

 


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Tue, 02/08/2011 - 20:01 | Link to Comment tellsometruth
tellsometruth's picture

 

The Patiot Act Provisions just got renewed til Dec of this year and the WH released a Statement that they would like a 3 YEAR EXTENTION!

btw anyone whatch this one on CSPAN Live??? I only heard one comment called in support of it on all 3 party lines ...

 

ps I got on air

 

Tue, 02/08/2011 - 20:03 | Link to Comment tellsometruth
tellsometruth's picture

THE BILL DID NOT PASS BY 2/3! LOL nm

Tue, 02/08/2011 - 20:40 | Link to Comment whatsinaname
whatsinaname's picture

I have a goofy feeling that Einhorn is actually net long on this even though he was tooting the short horn. Meanwhile his other recommendation on the same call (Sprint) is languishing as nobody ever wants to give them their best star phones (first the Moto Razr and now the Apple Iphone). poor Sprint..

Tue, 02/08/2011 - 21:02 | Link to Comment I think I need ...
I think I need to buy a gun's picture

I don't think it matters in the end hes long physical gold

Tue, 02/08/2011 - 21:25 | Link to Comment JoeStocks
JoeStocks's picture

Keep in mind...from January 10th...

(Reuters) - St. Joe Co, the largest private landholder in northern Florida, said on Monday the U.S. Securities and Exchange Commission launched an informal inquiry into its policies relating to impairment of investment in real estate assets.

Wed, 02/09/2011 - 00:42 | Link to Comment Thomas
Thomas's picture

I saw his presentation and found it rather compelling. I wouldn't count David out just yet.

Tue, 02/08/2011 - 20:05 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

It's patriotic to put your trust in a proven terroristic, genocidal, lying, manipulative self-serving bunch of thieves that call themselves government... how novel. Interesting times.

Tue, 02/08/2011 - 23:44 | Link to Comment spekulatn
spekulatn's picture

Can we get GW to write a puff piece on why this is patriotic?

8}

Tue, 02/08/2011 - 20:10 | Link to Comment Michael
Michael's picture

News Update; Nice Win for us.

House blocks extension of certain Patriot Act provisions.

So far, the only news I have on this issue is this.

http://www.dailypaul.com/156468/house-of-reps-talking-about-patriot-act-now-230pm-est-on-cspan

Tue, 02/08/2011 - 20:15 | Link to Comment tellsometruth
tellsometruth's picture

"Lone Wolf" provision fail...

Tue, 02/08/2011 - 20:23 | Link to Comment Michael
Michael's picture

Tea Party Review debuts at CPAC in Washington DC

February 11, 2011

I hope many of the writing contributions comes from Zero Hedge.

http://www.teapartyreview.com/

Tue, 02/08/2011 - 21:11 | Link to Comment Michael
Michael's picture

By a vote of 277-148, the House failed to pass the extension, needed 290(2/3) Yea votes to pass- click here for the roll call vote to see how your representative voted!  See list of traitors of our nation here.    http://clerk.house.gov/evs/2011/roll026.xml

Thanks again for all you've done, but remember, we can't let up pressure now. This won't be the last we've heard of the PATRIOT Act renewal in the House.

FINAL VOTE RESULTS FOR ROLL CALL 26

      H R 514      2/3 YEA-AND-NAY      8-Feb-2011      7:04 PM
      QUESTION:  On Motion to Suspend the Rules and Pass
      BILL TITLE: To extend expiring provisions of the USA PATRIOT Improvement and Reauthorization Act of 2005 and Intelligence Reform and Terrorism Prevention Act of 2004 relating to access to business records, individual terrorists as agents of foreign powers, and roving wiretaps until December 8, 2011

                  Yeas Nays NV
Republican 210  26        5
Democratic 67   122       4
Independent        

Tue, 02/08/2011 - 22:48 | Link to Comment hbjork1
hbjork1's picture

Thanks for the link Michael.

Saves time for lazy people like me.  My Rep is going to hear about this.

Wed, 02/09/2011 - 03:14 | Link to Comment StychoKiller
StychoKiller's picture

I'd like to think that my email to Tim Walz (D-MN) persuaded him to vote against this, I'd also like to think that Sandra Bullock is secretly pining for my body also! :>D

Wed, 02/09/2011 - 14:18 | Link to Comment tamboo
tamboo's picture

put down the tea party koolaid and walk away,
thank you.
http://exiledonline.com/a-peoples-history-of-koch-industries-how-stalin-...

Tue, 02/08/2011 - 20:14 | Link to Comment topcallingtroll
topcallingtroll's picture

This might be another kbr moment but a smaller pop. Swing traders take note.

Tue, 02/08/2011 - 21:11 | Link to Comment B9K9
B9K9's picture

Hey Tyler, you want some bad news?

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices US

Diplomat convinced by Saudi expert that reserves of world's biggest oil exporter have been overstated by nearly 40%

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overst...

Paging Travis, Trav7777 to the white courtesy phone.

Tue, 02/08/2011 - 21:19 | Link to Comment Michael
Michael's picture

Don't worry. The 22.5% unemployed won't be using much of it in the foreseeable future.

Wed, 02/09/2011 - 03:15 | Link to Comment StychoKiller
StychoKiller's picture

Maybe not to get around, but heating a house is still mandatory here in MN!

Tue, 02/08/2011 - 20:27 | Link to Comment AN0NYM0US
AN0NYM0US's picture

there ain't nothing like Forida swampland... I mean wetlands

http://www.joe.com/cms/images/headers/activity_Nature.jpg

 

Tue, 02/08/2011 - 20:34 | Link to Comment Rainman
Rainman's picture

yes, the old cons are still the best, but only most of the time. Groucho Marx lost it all chasing the FL land flip many decades ago....along with many, many others. 

Tue, 02/08/2011 - 20:15 | Link to Comment no life
no life's picture

Confusion to the enemy..

Tue, 02/08/2011 - 21:16 | Link to Comment Midas Mulligan
Midas Mulligan's picture

He who sells what isn't his'n...

Tue, 02/08/2011 - 20:28 | Link to Comment Quinvarius
Quinvarius's picture

This is a pop to short.  Obviously they have no plan.  This is panic mode.  Maybe they make aquisitions?  Maybe they sell themselves?  What kind of clown PR is this?  Anyhow, they are screwed because someone is going to be looking at the books either way.

Tue, 02/08/2011 - 20:40 | Link to Comment prophet
prophet's picture

No doubt similar to the pop in mid-December from 18 to 22.

Tue, 02/08/2011 - 21:36 | Link to Comment Quinvarius
Quinvarius's picture

Good point.

Tue, 02/08/2011 - 20:31 | Link to Comment going country o...
going country on their ass's picture

i have a mortgage that 'tracks' the ECB interest rates. what advice can anyone give?

how much silver is needed to be 'safe' when the SHTF?

thanks

Tue, 02/08/2011 - 20:31 | Link to Comment buzzsaw99
buzzsaw99's picture

anyone who sells shares they don't own deserves whatever they get.

Tue, 02/08/2011 - 20:34 | Link to Comment DonutBoy
DonutBoy's picture

Hmmm...    If the company was sold or about to be sold there'd be no need for this announcement.  I'm not clear how this shows Einhorn to be wrong.  I take it as confirmation by St. Joe management that he's largely right, St. Joe cannot continue to operate as currently structured.

It looks more to me like Berkowitz caused the board to act.  Perhaps he'd like an opportunity to get out.

Tue, 02/08/2011 - 22:58 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Count me as confused as well. Einhorn's statements about the overvaluations of St. Joe's land holdings seemed dead on accurate to me. I think he was right. 

Tue, 02/08/2011 - 20:40 | Link to Comment assumptionblindness
assumptionblindness's picture

“We have engaged Morgan Stanley to undertake a comprehensive and thorough review of all available alternatives, and our Board and management are committed to taking the appropriate and necessary actions to enhance value for St. Joe shareholders.”

Translation:  We have decided to pay Morgan Stanley a large sum of money for advice as to how we can better conceal our insolvent status, and our Board and management are desperately selling as many shares as possible under the guise of 'enhanced value for St. Joe shareholders.'  Operation "Burn Einshorn"  has officially begun.

P.S. - Our thanks to Mr. Einhorn for this opportunity to turn lemons into sweet and ever-so-refreshing short squeezed lemonade.  

Tue, 02/08/2011 - 20:47 | Link to Comment Ein Stein
Ein Stein's picture

Please take note:

http://dailycaller.com/2011/02/08/move-to-extend-patriot-act-under-suspended-rules-fails-in-house/

Wed, 02/09/2011 - 03:17 | Link to Comment StychoKiller
StychoKiller's picture

About the only good news I've heard about in quite some time. :>)

Tue, 02/08/2011 - 20:55 | Link to Comment NOTW777
NOTW777's picture

TRC might also pop on this news - massive pennant formed under $27

Tue, 02/08/2011 - 20:57 | Link to Comment Withdrawn Sanction
Withdrawn Sanction's picture

The St. Joe Company has just announced it has engaged Morgan Stanley to pursue "strategic alternatives to enhance shareholder value."

Alternative Translation:  Not having a clue how to enhance shareholder value (strategically or otherwise), we hired these guys over here...who dont know how to do it ieither...unless you consider rolling little old ladies for their pensions, "strategic value enhancement."

Good show, St Joe; St Mary would be so proud of your "engagement."

Tue, 02/08/2011 - 21:11 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

WTF is morgan stanley gonna do, plant flowers at the entrance of the empty subdivisions??  gimme a fucking break, st. joe might as well as held up a "we're fucked" sign

Tue, 02/08/2011 - 21:34 | Link to Comment Reese Bobby
Reese Bobby's picture

Everybody is wrong sometimes but Einhorn is an extremely thoughtful investor, and has remained so during this period mass investor insanity.  I would guess he is happy to get a chance to see what Morgan Stanley can do for St. Joe.  I would bet he is not scared by the prospect...

Tue, 02/08/2011 - 22:08 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

if they sell their properties they are going to have to sell for cheap, i am very familiar with the florida panhandle and it has slowed way down, great property and a beautiful area.

 

but if these numbers are correct they are in a world of hurt and morgan stanley can't polish a turd

http://finance.yahoo.com/q/ks?s=JOE+Key+Statistics

Tue, 02/08/2011 - 23:00 | Link to Comment Reese Bobby
Reese Bobby's picture

I expect you know more than Morgan Stanley.  At the same time JOE picked the right time to try doing something.  Money is cheap and the Chinese are the new Japanese: they'll buy most anything.  This should be an interesting story to watch.

Tue, 02/08/2011 - 23:36 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

morgan stanley wouldn't exist if it wasn't for the government tit.  JOE picked the right time to do what?  the land/housing market is way down, timing is terrible, they are broke for a reason.

there is one thing that you can buy on the cheap with money, and that is land and housing. so far einhorn is correct, these guys are broke and going to ms is raising the white flag.

this will be interesting though..

Tue, 02/08/2011 - 21:28 | Link to Comment bob_dabolina
bob_dabolina's picture

This is so the original ending of WS.

Where Bud Fox goes behind Gekkos back and fucks him.

God damn Blue Horseshoe.

Tue, 02/08/2011 - 21:58 | Link to Comment onarga74
onarga74's picture

GG- "It's all about money.  Everything else is just conversation."

Tue, 02/08/2011 - 21:28 | Link to Comment Godisanhftbot
Godisanhftbot's picture

SAY IN AIN'T SO JOE

 

I would never follow a loud short into anything unless it was for 10 minutes in some Chinese supposed fraud.

Tue, 02/08/2011 - 21:51 | Link to Comment Hephasteus
Hephasteus's picture

Well then John Nadler and Blythe Masters hate you.

Tue, 02/08/2011 - 22:04 | Link to Comment Jasper M
Jasper M's picture

So, Morgan Stanley is on the case? Gosh, I guess that Is pretty bad news for Mr. Einhorn & co., seeing as Morgan Stanley's leadership has such a good track record of financial acumen . . . wait . . . no . . .

Seems to me the only way MS can really help St. Joe is if they figure out a way to share with them the pipeline into the lake of taxpayer dollars that MS has.

Tue, 02/08/2011 - 22:36 | Link to Comment Cursive
Cursive's picture

Some kind of dividend recap or other PE restructuring scam?  Cash for the elites now, bankruptcy for the commons down the road.

Tue, 02/08/2011 - 23:11 | Link to Comment zero intelligence
zero intelligence's picture

I agree with Einhorn's thesis that St. Joe is a cash burning, land-selling blob of nothing that will self-liquidate in about ten years. However, in the meantime, it is a blank slate on which people can project their fantasies, among them the "hard asset" fantasy since it is a cheap land play. A bad short.

Tue, 02/08/2011 - 23:42 | Link to Comment wisefool
wisefool's picture

Is this the company that bought all that northern florida real estate with the "cant lose" "plan B" of turning it into citrus and other warm weather agriculture if housing demand slipped and/or all the development in the southern part (where they torn down the orginal orchards) got all filled up with homeowners? I would not short  the stock. They make one call to Al Gore and the weather will be perfect for growing oranges and grapefruits in north florida/southern Georgia.

Wed, 02/09/2011 - 00:43 | Link to Comment antidisestablis...
antidisestablishmentarianismishness's picture

I'd say the only "strategic alternative to enhance shareholder value" would be the implementation of a massive short squeeze.

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