The Madison Square Garden Company Message Board

Dabqs, my friend , Happy New Year

As we discussed several months ago, Ack found a way to cut a deal with BAM.

He really had no choice once David S abandoned him.

So he sells his warrants, backs off his activist role and agrees to be a good little passive shareholder..

I look for another annoucement down the road where he begins to sell his shares.

This stock has gotten way to boring for him.

He has moved on to a long position on JCP where he can take on his fellow titans in JCP, one of the most shorted stock in the DJI.

He is also going to war with Herbalife, where I think some of his comments could find him in a lawsuit.

Today is a good day, and as you said in one of your posts, we shake out the weak hands today and those looking for a quick buck from a none-existant take over.

I think BAM will keep the GGP team focused and we will see some good results in 2013.

Hey #$%$
If you are looking for a quick hit then follow Ack to Herbalife or JCPenney. GGP is now a core holding with good current income via divi and some long term appreciaition potential.

This stock often makes day traders and short term investors frustrated, as you appear to be.

If you came here looking for a quick hit with an Ackman inspired buy-out then your frustration is understood.

Today's movement is irrelevant to the long term holder and the facts of today solidify BAM's commitment and that is good, for the long term. Doesn't sound as though you will be around to see that.

I like Ack, but I don't like JCP's business model,
I will take a pass on that one.

I would say todays news is further evidence that BAM is committed to GGP for the long term and that, in my opinion, is a good long term thing.

It will also fuel the speculation that BAM is working toward gaining real control of GGP by owning more than 50%, perhaps that moves the stock somewhat.

Those looking for a quick short term profit by hoping that Ackman could cause a sale and thus a run up in the price are probably going to be disappointed because that is now less likely to happen.

The sizzle in the stock occurred between $.38 per share to $20 per share. It is now a core holding which should return 6%-10% per year with a 3%-5% current divi. Not the kind of thing that keeps the interest of a titan like Ackman, but BAM will love it and so will the conservative investors who invest in the stock.

The release I read said (1) Pershing sold 18 million of their GGP warrants to BAM, (2) announced they were withdrawing their request that the company be sold and (3) were returning to the status of a passive investor.

I would say that is step one of their exit; but you can read it however you want!

Mercie:

Ack does like to buck the trend, but I can not get on board with his JCP strategy.

First off, I am a conservative investor so I tend to invest in quality. For me, JCP fails that test. Macy's and Dillard's are just eating JCP's lunch right now and I would be concerned that JCP may never be able to get that business back. Macy's is a great operator, especially on the east and west coasts, and Dillard's has come roaring back from the dead and reclaimed their position as a dominant department store in their markets. Target, Walmart and Kohl's also offers JCP some very strong competetion. Like you, I beleive that SHLD is not in the league with these better retail operators.

Also this new concept of JCP to essentially turn their stores into malls filled with small stores operated by Levi's, LaCoste, etc and other designers, I don't think works. Running a regional mall is not that easy and it has taken folks like Simon, Taubman, GGP, etc many years to perfect it. Putting a small food court in the middle of a JCP store and surrounding it with these various boutiqes seems pretty risky to me. I know Johnson has said he is working on a deal to bring Apple products to JCP stores, but I find it hard to believe that Apple will downgrade their brand and sell their products in JCP stores. Apple is the most coveted tenant in regional malls today, and they are very selective in which malls they agree to open stores in, so I find it hard to beleive they will operate within a JCP store.

I would be more concerned that JCP has a very bad Xmas season this year, and Johnson is either thrown out or quits and then the stock will really tanks.

It will be very interesting to watch JCP play out, but either way, I am on the sidelines. Good luck to you with it.

Dude:

Remember Ack's investment in GGP is via his Pershing fund and many of the Pershing investors are pension funds, college endowments and other tax exempt investors.
I would guess that at least 50% of Pershing's investors are tax exempt entities so whether they recognize a gain in 2012 or 2013 (assuming cap gain rates are higher in 13) is not an issue for them.

Your delema of whether to stay or sell is one we are all wrestling with on various stocks.

I have some AAPL stock that I want to sell by year end and trip the cap gain and taxes; but I got greedy and was holding for $800 per share. Now I still want to sell by year end but the price is now in the mid $500's. The decision to sell is always a hard one.

I like GGP's divi, I think the downside risk is very low, I understand and like the business sector, so I am content to hold for the long term and eventually pay a high cap gain tax then if I sell it in 2012; but those are all personal decisions that are unique to each of us.

good luck.

Dude:

I don't see the end of the year as being anything of a catayst to get something done, for anyone.

I think Ack will be patient and continue to try and either get BAM to take him out or somehow force a bigger transaction, but I really don't think he can cause that to happen.

As I have said before, Ack has caught a Tiger by the tail in JCP, so I expect that to dominate his time and attention over the next several months with GGP a back burner issue for him.

I do think the fundamentals of GGP will continue to modestly improve and with that the FFO, so the divi payout and stock price should improve.

My guess Dabs is the increase in his postion to 8% has something to do with the warrants or swaps that he owns. I doubt if he is quietly buying common shares on the open market. It you think Ack is going to increase his 8% stake in GGP to something more meaningful by purchasing shares on the open market, I certainly do not see that.

As I have said several times, Ack is taking a very public beating on his JCP position right now, and I would suspect that all of his time and energy is going into how to salvage Pershing's hugh position in a company who is clearly losing market share every day to strong competitors like Macy's and Dillard's, and who many, very smart investors, think could see their core business permanently reduced.

Ack's investment in JCP could turn out to be the biggest blemmish of all time on his record. It was his big pick for 2012 and it is down almost 1/3 from where he bought it at $25 per share. As important as GGP was (and is) to him, I think it has taken a back seat to his problems at JCP.

Sandeep probably made those comments thinking Ack was too busy and distracted with other things to even notice what he said.
But what appears to be the case, is BAM and Flatt are operating as business as usual, and have seemed to dismiss the fuss that Ack tried to stir up a month or two ago.

Cubbie:

Two important things to consider when evaluating Sandeep's motives::
1. Sandeep wants to keep his job at GGP and in a merger with SPG he is almost certainly out on the street.
2. He was put into his GGP job by BAM, so his loyalty is to them.

Ack has been quiet lately, but I think it is because he has seen his investment in JCP go from his basis of $25 per share to $17+ per share.
Also since his entrance into JCP several analyst reports have been issued with a "sell" or "negative" rating, and JCP's recent earnings release was horrible. (Not to mention several big time Hedge Funds have taken short positions in JCP)

While, I am sure Ack would love to create more mischief within GGP, I think he is a bit distracted these days defending his JCP position.

I agree with you that GGP will be fine and is a good long term hold.

Dabqs

I think the probability is at least 75% Ack cuts a deal with BAM.

Several factors I would note:
1. I don't think SPG is willing to make a bust out offer which to me would be defined as north of $26 per share.

2. Without such a bust out offer, BAM is not under any pressure to sell, despite what Ack may say. And as I think we both agree, BAM would prefer not to sell, probably at any price..

3. Ack can not afford to keep his money tied up for any long period of time. Therefore, if he thinks the GGP share price is going to vasilate between $18-$21 per share over the next year or two, I think Ack may be willing to take a BAM offer in the $22-$24 per share range. Ack can then declare victory and BAM would rid themselves of an annoying minority holder who is interferring with their long term real estate goals.

4. BAM has said they do not need any more ownership of GGP than what they have now, which is why they have discontinued their participation in the dividend reinvestment plan so their ownership percentage will not creep up. As Sam Zell said on CNBC, they do not need to own anymore of GGP, they already have effective control. So they should have no interest to pay a "control premium", since they already have effective control.

I really see this playing out this way, because there is no specific reason I could see in the next 1-2 years that should cause GGP price to increase significantly, absent some sort of capital event. Therefore, in my opinion, that makes Ack a seller.

You may think Ack is causing all of this fuss, because he wants to force a buyout for the shareholders. I think his motive is to force BAM to buy him out.

If he is capable of making a big enough pain of himself to Flatt and BAM, he may just get his wish; but I think Flatt wants us chickens to remain as his minority partners in BAM.

That's fine with me, because I think GGP, with BAM in control, is a good long term investment.

Ack is the last Hedgie/Opportunistic Investor left standing who made all of this happen for us and GGP. Berkie is gone, Texas Teachers is gone, Tilson is gone, I beleive Blackstone may also be gone. BAM is still here, but we all knew they were here for not only the opportunistic play, but for the long term real estate fundamentals.

There will be a time for Ack to go, and as soon as BAM offers him a price he beleives is fair, he will also be gone.

Dabqs
As I have said before, I love Ack too.
He has made a lot of money for all of us GGP shareholders.
And I think there is a likihood that he will make us more.

However, I think I know where his proirities are, so when the announcement is made, sometime in the future, that he has sold his interests to BAM or to some other entity that is friendly to BAM, in a privately arranged transaction, I will not be surprised, and I think your heart may be broken.

"A Pox on Both their Houses"

Ack goes on CNBC and says that David S is his new best friend, calling him everyday, wanting his help to buy GGP.

David S issues a statement that in Ack's battle with BAM over GGP, Simon "does not have a dog in that hunt."

Hilarious!

This supports my credo of don't trust any of these actors; and don't believe anything any of them say.

I would say this, which Dabqs may disagree with, but except for having Ack gone from GGP, I would say that Flatt has Ack right where he wants him.

Dabq

I am quite sure Flatt does not have to consult with Ack; but consulting with Reit E. Boom could be a different story.

Although when last seen, Reit E. Boom was held up in a basement bunker reading through old legal bills suubmitted in connection with the Borders bankrupcy.