SEC launches inquiry in JOE

[coondog]

Shares of St. Joe Co. /quotes/comstock/13*!joe/quotes/nls/joe (JOE 21.93, -1.14, -4.94%) fell 5% in early dealings Tuesday after the Florida landholder said U.S. regulators were informally reviewing its investment policies. In a filing with the Securities and Exchange Commission dated Monday, St. Joe said the SEC has notified the company that it is conducting an informal inquiry into St. Joe's policies and practices concerning impairment of investment in real estate assets.

The hard-hit Florida real estate company, which is down 21% in the past 12 months, had been logging some gains in recent weeks, thanks to the rumor mill?s unsubstantiated but persistent idea that it would be acquired.

The quality of the company?s real estate portfolio in Florida has been called into question by prominent investors recently. For example, back in October, noted hedge fund manager David Einhorn of Greenlight Capital labeled the company?s portfolio a boondoggle at an investment conference in New York. Einhorn?s presentation listed alleged mis-representation by the company of various properties, including their potential value and the condition of the properties. Einhorn reiterated those charges last month in an interview with Bloomberg.

 

[melscuba]

Shares of St. Joe Co. /quotes/comstock/13*!joe/quotes/nls/joe (JOE 21.93, -1.14, -4.94%) fell 5% in early dealings Tuesday after the Florida landholder said U.S. regulators were informally reviewing its investment policies. In a filing with the Securities and Exchange Commission dated Monday, St. Joe said the SEC has notified the company that it is conducting an informal inquiry into St. Joe's policies and practices concerning impairment of investment in real estate assets.

The hard-hit Florida real estate company, which is down 21% in the past 12 months, had been logging some gains in recent weeks, thanks to the rumor mill?s unsubstantiated but persistent idea that it would be acquired.

The quality of the company?s real estate portfolio in Florida has been called into question by prominent investors recently. For example, back in October, noted hedge fund manager David Einhorn of Greenlight Capital labeled the company?s portfolio a boondoggle at an investment conference in New York. Einhorn?s presentation listed alleged mis-representation by the company of various properties, including their potential value and the condition of the properties. Einhorn reiterated those charges last month in an interview with Bloomberg.

What would an acquisition mean to the continued build out of Watercolor, Watersound, Rivercamp, Watersound North Etc.? as well as the development around the airport? I guess it's just speculation. Just wondering if anyone had any thoughts?

 

[Kurt]

I don't pretend to know anything but i posted a thread awhile back something like this and don't remember if it is related.

I remarked at the time that I found it was interesting right on the heels of multiple lawsuits Joe was filing against BP, Haliburton etc.

 

[scooterbug44]

Is this another investigation, or just the same one being referenced again?

I believe the other one was after Einhorn publicly stated they were full of BS and lying to investors - no tin foil hats, just lots of "developed land" on the books that actually isn't.

 

[coondog]

The inquiry was announced this morning.

 

[robertsondavies]

Shares of St. Joe Co. /quotes/comstock/13*!joe/quotes/nls/joe (JOE 21.93, -1.14, -4.94%) fell 5% in early dealings Tuesday after the Florida landholder said U.S. regulators were informally reviewing its investment policies. In a filing with the Securities and Exchange Commission dated Monday, St. Joe said the SEC has notified the company that it is conducting an informal inquiry into St. Joe's policies and practices concerning impairment of investment in real estate assets.

The hard-hit Florida real estate company, which is down 21% in the past 12 months, had been logging some gains in recent weeks, thanks to the rumor mill?s unsubstantiated but persistent idea that it would be acquired.

The quality of the company?s real estate portfolio in Florida has been called into question by prominent investors recently. For example, back in October, noted hedge fund manager David Einhorn of Greenlight Capital labeled the company?s portfolio a boondoggle at an investment conference in New York. Einhorn?s presentation listed alleged mis-representation by the company of various properties, including their potential value and the condition of the properties. Einhorn reiterated those charges last month in an interview with Bloomberg.

this is a very weak inquiry, and an informal one, prompted by Einhorn and all the little hedge funds that follow Einhorn's hedge fund, calling their friends in the SEC, to launch this inquiry, so they can escape their positions, because they realize now that shorting a land owner, with no debt, in an area of the country they didnt' understand had ANY value, was a mistake afterall. The SEC is really losing their way, first they can't figure out Madoff despite tips from many people, and now they're doing the dirty work of hedge fund short sellers, responding to every inquiry that assets must be "impaired" even though the assets in this case (Joe's) were acquired in the Great Depression, and are carried at that, and are NOT impaired one iota, even at a few bucks an acre. They want JOE to impair a couple hundred million dollars worth of development work they've done in the last 10 years, and its a total matter of judgment in the totality of the circumstances, KMPG is well aware, as are Blackrock, and Fairholme, T Rowe Price, and Fidelity.

P.S., the stock finished up 1% today, reversing the early losses ENTIRELY after a long day of trading, examination, phone calls, and reflection on the situation.

 

[beachFool]

I disagree the SEC is bailing out Einhorn and all the little hedge funds as does the Wall Street Journal.

St. Joe Shares Rise After Disclosing SEC Inquiry - WSJ.com

In a statement Monday evening, a Greenlight spokesman said, "St. Joe's valuation practices remain open to question, as it is hard to understand how the company invested hundreds of millions of dollars during the real estate bubble and haven't seen fit to take a material write-down."

But in a note Tuesday, Keefe, Bruyette & Woods said St. Joe has been discussing and outlining its impairment policy since the investor presentation raised questions surrounding its practices. The firm said it believes St. Joe and its independent auditor, KPMG, adhered to generally accepted accounting principles and that the issue should be resolved successfully.

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[robertsondavies]

I disagree the SEC is bailing out Einhorn and all the little hedge funds as does the Wall Street Journal.

St. Joe Shares Rise After Disclosing SEC Inquiry - WSJ.com

In a statement Monday evening, a Greenlight spokesman said, "St. Joe's valuation practices remain open to question, as it is hard to understand how the company invested hundreds of millions of dollars during the real estate bubble and haven't seen fit to take a material write-down."

But in a note Tuesday, Keefe, Bruyette & Woods said St. Joe has been discussing and outlining its impairment policy since the investor presentation raised questions surrounding its practices. The firm said it believes St. Joe and its independent auditor, KPMG, adhered to generally accepted accounting principles and that the issue should be resolved successfully.

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Buzz, you're free to disagree all you want but that's exactly whats happenned here. Einhorn and a few others, who are trying to profit, by bringing JOE down further, have for months now pleaded with their contacts at the SEC, to investigate this matter. It is a TOTAL red herring, I agree with Keefe Bruyette's analysis above, that you allude to in the journal.

Does the fact the the Wall Street Journal doesn't explicitly say that the SEC has been pestered by Einhorn and others who have shorted JOE, make you believe that's not the case seriously?

 

[scooterbug44]

Since the shares went UP after they announced the SEC inquiry, I find that particular conspiracy theory hard to believe.

 

[robertsondavies]

Since the shares went UP after they announced the SEC inquiry, I find that particular conspiracy theory hard to believe.

i don't... I also don't find it to be a conspiracy at all, that Einhorn would make several calls to the SEC, to share his concerns on JOE, even though he was 'short' JOE stock. The SEC is very sensitive to such inquiries nowadays, post Madoff...especially when they have many friends in the hedge funds short a stock like JOE, who really try their best to influence these public servants.
Einhorn is allowed that lattitude, it makes it easier for him to profit from his short positions for sure, usually.

Unfortunately, the problem here for shorts is that the stock is going to continue going up, because JOE is drastically undervalued in the context of a global recovery in asset prices/inflation. I'm told on good authority that the junior analyst that prepared the initial idea for Einhorn, is so New York centric, he (and Einhorn in his Marie Antoinette moment) had no idea that anyone actually wanted to live or retire or vacation ANYWHERE beyond 3 coasts in America (New Jersey to Boston), San Diego to Seattle, and Vero Beach around to Naples. c'est vrai dis Einhorn!!!