The outlook for the St. Joe Company doesn’t look good among reports from Sahm Adrangi’s Kerrisdale Capital. The company may be facing a large amount of forced selling from their shareholders due to problems within St. Joe’s and the business that have invested in them. Among these businesses, Sahm Adrangi discussed the problems facing their main shareholder, the Fairholme Fund.
The Fairholme Fund owns approximately 1/3 of St. Joe’s, but with new regulations from the Securities and Exchange Commission, that is sure to change soon. Like St. Joe, the Fairholme Fun used to be quite an impressive company until poor decisions and market conditions affected their portfolio. Since their peak, Fairholme’s assets have dropped by upwards of 90%. This leaves them in a position where they will be forced to liquidate a considerable portion of their assets to avoid repercussions from the SEC. It’s expected that they will be cutting their shares in St. Joe by around half in order to meet the new regulations.
Even if this was the only potential problem that St. Joe was facing, they would still be facing a questionable future according to Sahm Adrangi. Around a decade ago, St. Joe purchased land near Panama Beach with plans to develop it into an impressive community designed for retirees including housing and businesses. Unfortunately, unlike their other successful communities, the property that they purchased is rather desolate and mired by swampland. While St. Joe may be telling their investors that progress and a return on their investment is coming, the research by Kerrisdale Capital and Sahm Adrangi shows that no concrete actions have been taken to develop the land. At the time of their research, no building permits had even been applied for.
Sahm Adrangi has presented evidence to show that their $1 billion valuation is severely overhyped and has little or no chance of reaching the promises that they sold to their investors. Kerrisdale believes that the actual value of the company is significantly less by around 40%. It is because of all of this that Kerrisdale has chosen to take a short position on St. Joe.
Since the formation of Fortress Investment Group in the year 1998, the firm which first began operations as a private equity firm has been a trendsetter in its rights. This can be confirmed by its 2007 IPO when it made a mark as the first private equity firm to go public on the NYSE. Currently, the firm stands as a diversified worldwide investment management firm that deals with more than 43 billion dollars of assets for over 1,750 investors. The assets are in the form of permanent capital vehicles, private equity, hedge funds including others. The Fortress Investment group has its headquarters in New York and has over 900 employees. The firm has three principals who include Randal Nardone who is based in New York, Wes Edens and Peter Briger who is based in San Francisco. Originally, Fortress was founded by Randal Nardone, Wes Edens and a retired principal known as Rob Kauffman. It is as after Kauffman retired that Peter Briger joined as a principal.
Bridge beside being a principal is also the chairman of the Fortress Investment Group board of directors. He has been in the board as a member since the November of 2006 wherein 2009 was elected the co-chairman of the Group’s commission. He has also been a member of the management committee at the company since the year 2002. Currently, he is the head of the Credit and Real Estate business at Fortress Investment Group. Before joining the group in the year 2002, Peter Briger had already spent around 15 years at Goldman, Sachs & Co were in 1996 became a partner. He is also on the board of Tipping Point which is a non-profit organization that serves low income earning families in the area of San Francisco. Bridger is also a board member at Caliber Schools which is a network of charter schools that ensure that it students are well prepared to be successful in the four competitive years that awaits them in college and beyond that. Peter Briger has a B.A degree from Princeton University. He also holds an M.B.A from the University of Pennsylvania’s Wharton School Of Business.
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