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The St. Joe Company Message Board

  • value_ballast value_ballast Nov 10, 2010 1:57 PM Flag

    einhorn is dead wrong...Joe will be bought out

    Einhorn is dead wrong. JOE land is in NO WAY worth just 1500 an acre. The very statement is absurd, broken, and sadly off base. The bet here is not that JOE land is going to be the next Hilton Head...it simply this:

    For the shares to be worth $20/share, the top decile of Joe's 570k acres needs to sell for 15,0000/acre and the next decile needs to sell for just 5,000/acre and the REST can be at Einhorn's incorrect number of 1500/acre.

    Fact: WMT, CVS (implied), an internet travel co and a quik mart paid on average 275k/acre this past quarter. Yes...not 1,500 but 275,000/acre. Two extra zeros. Was it a lot of land - no. But for each one of these anchor tenants, JOE will be able to sell through to the Chick Filet, McDonalds, hotels, car rental lots, etc for close to those values. In fact, the entire market cap of JOE could be paid for with 6,545 acres sold for 275,000/acre...and the other 560,000 acres are "free".

    Next, let's look at the absurdity on the low end - rural land. Joe sold rural land for an average price of 3,000/acre in the Q. But Einhorn says all of the land (incluiding the 5 miles of linear ocean front and 70k acres of airport adjacency) is only worth 1,500/acre. HOW? Joe just sold rural land for 3,000/acre. So the bottom end land is worth 3,000 but Einhorn says incorrect - its all worth half of that value? Please explain.

    Finally, JOE is simply experiencing multiple simultaneous troughs: Florida real estate bust (near trough), BP oil spill trough, and the seasonal summer trough...all in a national economic and banking trough.

    If you have time...say 3-5 years...you will make 3-5x on this investment. Given their is zero leverage and time for Joe to adapt and recover with the North Florida economy...this is a terrible short from this point (from 80 is was a dream...from 18, it will be a "short" disaster). Buy all you can for a safe, non leveraged way to play the 3 year turnaround in the economy in North Florida.

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