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interesting take on major holder
taken from a north carolina commercial real estate web site
General Growth Still In Question…
By binx007
On Friday General Growth filed yet another SEC filing stating that they have not achieved financing and their forebearance period on their loans has ended. But, will the banks choose to default the lons an send them into bankruptcy? Or do they want to keep GGP out of bankruptcy.
The longer the banks keep General Growth Properties out of bankruptcy, the better control they have over the loans. If GGP is ofrced to file bankruptcy the banks will loose control over the loans and a judge will have all the control.
Is now a good time to invest in GGP?
I wouldn’t say yes or no, but there are a few big investors who believe GGP’s book value of $6.76 per share will hold through bankruptcy and could possibly be worth more to the shareholders.
What if GGP does liquidate? What if GGP does file bankruptcy?
Book Value per share is estimated around $6.76
But that’s based on asset values when they were purchased. Some might be lower… properties purchased in the last 5 years could definately be lower. But GGP has held properties for much longer than 5 years. the value of their longer holdings would more than offset the current value of recent purchases.
So how high could the book value be? 8… 9… 10… 20 per share?
GGP is trading at $0.50.
If GGO goes BK you could make a lot… A LOT of money.
So who are the big investors?
DSC Advisors made a new purchase of GGP Stock on 2/19/2009 of 32,157,000 shares.
So who is DSC Advisors?
Best known contact would be Neil Bluhm of Walton Street Capital.
Walton Street Capital’s office is at 900 N. Michigan Ave in Chicago.
DSC Advisors office is at 900 N. Michigan Ave in Chicago.
GGP’s office is less than 2 miles from Walton Street Capital and DSC Advisors.
Walton Street Capital:
Walton Street invests and manages with the philosophy that real estate is a commodity subject to cycles, both in terms of its underlying supply and demand fundamentals and its pricing relative to other financial assets. Through the Principals’ relationships, experience and discipline, Walton Street has consistently demonstrated its ability to identify opportunities to create and maximize value, while minimizing risk, through: opportunistic investing, which correctly identifies capital voids, market and operating inefficiencies and anticipated cyclical recoveries; value-added asset management, which aggressively seeks to redevelop or reposition under-managed and under-capitalized assets to appeal to a broader, institutional marketplace; and a disciplined disposition strategy, which identifies an exit strategy before an investment is made and is continuously evaluated to seek an optimal and efficient result.
Walton Street believes it is critical that those making the investment and management decisions invest significant personal capital alongside investors. Underscoring this philosophy, of the $3.5 billion of total equity commitments, the Principals of Walton Street have personally invested $202 million.
The importance of a disciplined disposition strategy dictates Walton Street’s investment focus on well-located institutional quality assets within desirable markets, which are likely to have greater liquidity by appealing to a wider range of potential buyers. On a portfolio basis, Walton Street utilizes only moderate levels of leverage through the use of predominantly first mortgage, non-recourse debt, which is structured to give Walton Street the greatest flexibility so as not to impede an asset’s timely exit. Typically, Walton Street makes investments that seek to meet our return objectives over an expected average holding period of three to five years.
WAS THAT NEW HOLDING ON FEBRUARY 19, 2009 SIGNIFICANT?
That’s your call… I say if it wasn’t I don’t know too many people less than two miles from GGP that would invest $15 Million Dollars into their stock… especially not a real estate holding company… unless they had some very, very, critical information.
Here’s another one… Guggheim Capital invested in a little over 100,000 shares on Febraury 17th.
That’s not a lot, but the significance is there.
Guggenheim is once again located where?
227 West Monroe Street.
Where’s that?
Less than 4 blocks from General Growths corporate office.
Is another 50K invested last week from Chicago significant? Who knows, but the reality is these guys aren’t just fund holders they are real estate investors, blocks away from GGP’s headquaters in Chicago and are dumping money in GGP. They only have to walk 5 minutes down the road to get the inside scoop. And to think one real estate tycoon doesn’t know somthing about another… 5 minutes away… is a bit naive.
Bill Ackman certainly thinks it is worth some money. His fund Pershing Square controls approximately 20-25% of GGP stock. But Bill has bet several tims on bankruptcy… and he has been right several times. Why buy a Bankrupt stock?
Property Values… if the company is liquidated the stock should be worth much more than it is worth now.
linked on to the site you referenced and have the following comment. one of the stats indicated the stock was up 74.74% from its 52 week low of $0.24. that would mean that the stock was trading at $0.42. based on that, my presumption would be that the information is almost one month old. the stock last traded around the $0.42 mark in early to mid-march. therefore, i would think the short interest information is at least that old.
because of that, i would think the 45 million share short interest amount is highly suspect since it most certainly does not include what some thought might have been a short covering rally this past week when we had the hugh share volumes trading and the stock ran up into the $1.30 range.
that's not to say the shorts could not have come back in, it's just that i would not take the information on that site at face value unless you can find out when it was last updated.
TALF to the rescue by month's end?
http://finance.google.com/group/google.finance.656948/browse_thread/thread/f03414e84a0dc3ac#
hard to believe it was just shorts but i thought i saw a post from a number of days ago saying, based on daily trading volume, it would take 6-8 days to clear all shorts. today's volume was 6 times daily average so maybe a good deal of it was the shorts were running to cover. with about 330 million shares outstanding and ackman and the bucksbaums holding or controlling about 150 million of those shares, that would only leave about 180 million shares available to trade. today's trading volume amounted to 25% of the "tradable" outstanding shares.
even if general growth were working on some type of a deal, they could not say anyting and if fact would be required to say everything or nothing. don't think they had any middle ground in which to operate to answer the nyse's inquiry. while it may in fact be nothing, based on the volume, i would have to think along the lines of "where there's smoke there's fire". purely speculation on my part but something has to explain that hugh volume.
again, looking at 6-8 days average trading to clear shorts, wouldn't there have to be 90 million shares traded to clear 45 million shorts. presuming that only long holders would have been selling (profit taking) which provided shares for the shorts to purchase. am sure i am missing something here but today was really a wild ride. can't wait for tomorrow.
i think the key with that mmfais site it to go back to the edgar data base and pull up the underlying document. that will let you know the timeframe and maybe even let you pinpoint the date of any action.
maybe i am cynical, but i do think there is a lot of intentional mis-information posted on yahoo. seems like there are short bashers who want to see the stock go down and pumpers who want to drive the shorts to cover.
things are crazy enough with this stock without having a bunch of manipulators barfing a lot of bad information.
i didn't mean to imply that the mmfais site was not credible. the problem comes in the interpretation of the information in that site. just because there is a date next to something does not mean that date was an action date. if someone wants to intentionally distort facts, it is easy to point to the information contained on the surface and twist it to mean something it in fact does not say. and, it is also easy to just plain mis-interpret what you see on mmfais and think it says something it does not.
by way of example, i believe in the referenced oppenheimer post, oppenheimer increased its position by around 30 percent. in other words, if they were previously holding 100 shares and then purchased 30 more, they would have had a 30% increase in shares. someone, inadvertantly or intentionally, looked at the 30% number next to oppenheimer and posted that oppenheimer just purchased a boatload of ggp stock and was now the largest holder of the reit. that was just patently untrue.
if you look at the most recent mmfais post you previously linked me to, i think it shows that oppenheimer sold all of its stock. so now one could think, gee, they went from being the largest holder in ggp just a couple of weeks ago to now dumping all of their shares. what's going on? i better get out while the getting is good! and all of this is just because no one bothered to look into the underlying data to fact check things for themselves. that's all i'm saying. trust if you want to, but verify. thanks
link to last post. went brain dead.
http://www.sec.gov/Archives/edgar/data/275309/000027530909000004/main.htm
following post is the underlying detail for the 4/1/09 filing by fidelity. as you can see, their fiscal year ends on october 31 and this particular filing was for the first quarter (i.e. from november 1, 2008 to january 31, 2009). so, despite the fact this report was filed on april 1, 2009, that doesn't mean shares were purchased on 4/1/09. as can be seen from the detail in the filing, the shares were held as of 1/31/09 so therefore this was not a new purchase or new informaiton. that was the point i was making. just because the mmfais spreadsheet showed an "as of 4/1/09" date, that certainly does not mean that any action was taken on that date. thanks.
this is from the yahoo boards referencing the mmfais (in a later post) as support for the statement. it was this totally mis-stated post and all of the stupid replies that set me off. i thought there might have been a cross board post regarding oppenheimer here but if not, my point was to stress the mis-use of the mmfais material trying to make it support something which is not supported by any underlying facts.
thanks and sorry if you took this to be a shot at you when it was a shot at whatever yahoo posted this as noted below.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=7732&tid=39491&mid=39491&tof=-1&rt=2&frt=2&off=1
wasn't hancock purchased in 06? if so, that would have been close to the top of the market and it would make sense for its sale price to be greatly reduced when it recently sold.
if you look at the four east coast properties ggp has offered for sale (faneuil hall, south street seaport, harborplace, and the gallery at harbor place), the total recorded encumbrances on those properties is 244,476,000 and if the reports of the offers are to be believed, ggp was offered as much as 400 million for them (considering high bid for each individual property). the rouse portfolio was purchased in 2004 and booked at cost. even with the subsequent two to two and one half year run up in valuation and the following downturn in which we now find ourselves, i don't believe those properties would fare as badly as the hancock building.
additionally, the homart portfolio which was purchased in 2007 has value in excess of encumbrances (on a cost basis) of greater than 1 billion dollars. ggp has some 60 acres of developable land in downtown honolulu for which they received redevelopment approval last november i believe (this is the ward centers acquisition). ggp was looking for this to be one of their crown jewels and it could still be if they can buy time to get through this mess.
bernake made some encouraging comments yesterday and talf financing may be able to be used in some way. if ggp can just bridge through for 12 to 18 months i believe they can be ok. it's not that their loans were nonperforming, it was just that they could not pay off the balloon mortgages. commercial real estate companies just roll over these types of balloon mortgages and wait until they ultimately sell to pay them off. forced sales would certainly queer the works.
news this past week about simon refinancing three or four properties. interesting that they refinanced each of these properties for more than they had previously carried. so, they were either underleveraged at the time they originally mortgaged them or the value has increased since the original mortgage went into place. in any event, they were able to take out equity as a result of the refinance.
granted, they were significantly less leveraged than ggp, but what they did with those mortgages is the essence of what commercial real estate companies do (in good times). that is why if ggp can bridge through this mess there should be good upside. if not, you will be glad you got out.
you're right that mffais might be a good place to start but it requires verification. just last week some bozo used the mffais site to post that oppenheimer was now the largest ggp shareholder. this was either intentional puffing, misinterpretation of the information, or just plain ignorance. oppenheimer's march report was in fact their quarterly report issued in mid march but it was for the period from november 1 to january 31. apparently during the quarter oppenheimer increased its position in ggp and oppenheimer's percentage increase in ggp stock was posted as being their total percentage. oppenheimer only holds about 3 million shares of ggp and just a basic amount of research would have confirmed this. when oppenheimer filed with the sec in march, their purchase information was no more recent than 60 days prior (i.e. quarter ending jan 31 or as late as 150 days old (i.e. beginning nov 1). seems hard enough getting decent current information about ggp without having to dis-prove all of the disinformation which seems to be coming out.
i've looked at the mmfais site. it doesn't provide any verifyable way to check their assertion. there are no sec filings to support "new" purchases by either fidelity disciplined equity fund or fidelity capital fund. i find it surprising that fmr llc just disposed of almost 12 million shares and this new fidelity entity shows up owning about 12 million shares.
as the mffais site states, companies are required to report the top 10 holders of their stocks and a 12 million share purchase representing 7.7% of the company would be a required disclosure. no such reporting on the sec or ggp sites.
i believe this may have been nothing more than a transfer of ggp stock between funds. if you have anything to support your position, i would be interested to see it. thanks
do you have a link to the fidelity 12 million share purchase on the 1st?
following link with sec on 2/17/09 is fmr llc's form 13f-hr, its quarterly report of holdings. in this report, fmr llc reported it had 35,814,856 shares of general growth. this represented 13.35% of the outstanding ggp shares. this can be confirmed on ggp's yahoo finance and linking to "major holders".
http://www.sec.gov/Archives/edgar/data/315066/000031506609002301/fmrllc.txt
following link was posted with sec on 3/10/09. fmr llc states it has control over 24,161,751 shares representing 7.777% of the shares outstanding. since as of 12/31/08, fmr llc reported it had control over 35,8154,856 shares representing 13.35% of the shares outstanding if anything, it appears that fmr llc has disposed of over 11 million shares.
http://www.sec.gov/Archives/edgar/data/315066/000031506609002414/filing.txt
see attached link. no a/h trades to support your claim of 233,300 buy. IF this trade occurred, it might have been an extreme high volume at the close which didn't clear until after 4:00pm but which was included in the day trade stats.
http://www.nasdaq.com/aspxcontent/ExtendedTradingTrades.aspx?selected=GGP&mkttype=after
ggp annual meeting set for may 13 and will apply to shareholders of record as of march 16. interestingly, no shareholder proposal to place ackman on the board.
http://www.sec.gov/Archives/edgar/data/895648/000104746909003780/a2191956zdef14a.htm
also notable, no officer, other than metz, has any near term hope of cashing in his/her options. metz has 1 million option shares which can be exercised at $3.73/share. all other officers have options with minimum exercise price of low $30's/share. they have potentially millions of dollars at risk in options so one would think their interests would be totally aligned with shareholders who are hoping that equity will not be wiped out. that's not to say they also might not be awarded a boatload of new options at very low prices, but again, for those to be any good, ggp has to survive. again, their interests would seem to be aligned with those of the shareholders.
ackman stumps for general growth bankruptcy.
http://www.reuters.com/article/marketsNews/idINN0227347820090402?rpc=44&pageNumber=1&virtualBrandChannel=0
maybe you should go over to the yahoo boards where factual posting is not the order of the day. following link shows all after hours ggp trades today and there has only been a total volume of just over 57k. sorry, no trades of 300,000k in after hours.
http://www.nasdaq.com/aspxcontent/ExtendedTradingTrades.aspx?selected=GGP&mkttype=after