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General Category => General Discussion => Topic started by: Buffetteer on February 07, 2011, 06:51:36 AM

Title: JOE up 10% today
Post by: Buffetteer on February 07, 2011, 06:51:36 AM
Anyone know why. Is it simply because B. Berkowitz will probably become the new chairman of the board? That's the only news I could dig up on the company this morning.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on February 07, 2011, 07:01:55 AM
Slightly more info:

http://www.cnbc.com/id/41449101

Quote
A source close to the situation tells CNBC Berkowitz, whose mutual fund Fairholme Capital Management LLC, owns 29.7% of the company, is proposing to remove the company's chairman Hugh Durden and three other directors. Under Fairholme's proposal, Berkowitz, would become chairman and Charles Fernandez, President of Fairholme would become vice chairman of the board. Both men are current directors and plan to decline all compensation, including the reimbursement of expenses, until the company breaks even. The source said Fairholme plans to achieve this within six months by cutting $60 million dollars in expenses at St. Joe.

In addition Fairholme plans to hire a financial advisor to explore possible bolt on acquisitions and/or joint ventures for commercial and residential real estate development. A person close to the situation also said a deal to lease 41,000 acres of timberland is close to being signed and will generate between $80 million to $100 million for St. Joe over a twenty year period.  Much of the money from the deal will be paid up front, providing needed cash for acquisitions and joint ventures.

Title: Re: JOE up 10% today
Post by: Buffetteer on February 07, 2011, 07:11:42 AM
Thanks BVH.

I'm sure all the shorts rushing to cover doesn't hurt the price either.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on February 07, 2011, 07:16:37 AM
I listen when Einhorn speaks but he can come across pretty arrogant during his presentations.

Conversely, Bruce comes across as a bit dodgy and unsure of specifics during his interviews.

There is something about a not very polished long beating a slick short (at least as they look in the media) that makes me smile. :)
Title: Re: JOE up 10% today
Post by: Bronco on February 07, 2011, 07:20:16 AM
At different points in his life, many would consider Buffett a straight up dork.

Also, humble and quirky.  So if BB shares these traits, I wouldn't be scared.


BB makes money, pure and simple.  I don't own any of his fund or Joe, but I can see the guy tries to make money for his shareholders.  Another smart investor who keeps a lot of cash.

Hmmmm....
Title: Re: JOE up 10% today
Post by: TorontoRaptorsFan on February 07, 2011, 07:27:07 AM
The only reason why he has a lot of cash is because of lot of cash is being poured into the fund by investors. And in many cases Berkowitz can only spread the money around to so many positions because in some cases he runs into issues such as the amount of shares he's entitled to purchase.
Title: Re: JOE up 10% today
Post by: Buffetteer on February 07, 2011, 07:29:35 AM
Definitely see a lot of similarities between BB & WB. both long term value investors who eat their own cooking. They share the same risks as their shareholders and charge reasonable fees.

Big fan of both, but I'm long on Joe and other BB investments, so I may be a little biased  :)

Title: Re: JOE up 10% today
Post by: Bronco on February 07, 2011, 07:35:29 AM
Toronto Fan (you must be the one) - are you sure that is the ONLY reason.  Because he mentions others (see CNBC).

Unless, of course, you are implying he is liar.
Title: Re: JOE up 10% today
Post by: TorontoRaptorsFan on February 07, 2011, 07:39:11 AM
Look at how rapidly the AUM has scaled up over the years. There's so much money coming in he can only spend it in so many ways.
Title: Re: JOE up 10% today
Post by: txlaw on February 07, 2011, 05:15:32 PM
Toronto Fan (you must be the one)

Haha, nice. ;D 

The only reason why he has a lot of cash is because of lot of cash is being poured into the fund by investors. And in many cases Berkowitz can only spread the money around to so many positions because in some cases he runs into issues such as the amount of shares he's entitled to purchase.

He's gonna be able to find ways to deploy that cash.  Fairholme Fund has a distressed debt component to it, and there are certainly companies out there that need to be recapitalized. 


Title: Re: JOE up 10% today
Post by: QLEAP on February 07, 2011, 08:59:00 PM
And Bruce hits back at Einhorn on St.Joe ..

http://www.scribd.com/doc/48356839/St-Joe

Title: Re: JOE up 10% today
Post by: txlaw on February 08, 2011, 09:57:40 PM
St. Joe just announced that it is exploring "financial and strategic alternatives":

The St. Joe Company (NYSE:JOE) today announced that its Board of Directors has unanimously decided to explore financial and strategic alternatives to enhance shareholder value.

The Board intends to consider the full range of available options including a revised business plan, operating partnerships, joint ventures, strategic alliances, asset sales, strategic acquisitions and a merger or sale of the Company. The Board of Directors has retained Morgan Stanley & Co. Incorporated to assist it in the evaluation of these alternatives. The Company noted that there can be no assurance that the exploration of strategic alternatives will result in any transaction.

Britt Greene, St. Joe's President and CEO, said, "We have engaged Morgan Stanley to undertake a comprehensive and thorough review of all available alternatives, and our Board and management are committed to taking the appropriate and necessary actions to enhance value for St. Joe shareholders."


http://ir.joe.com/releasedetail.cfm?ReleaseID=548596
Title: Re: JOE up 10% today
Post by: Parsad on February 08, 2011, 11:27:59 PM
Wouldn't it have been cheaper to just put Berkowitz on the board?  Would he not have been able to generate more shareholder value than Morgan Stanley?  What a joke! 

Why do CEO's do this?  Is it because they don't have enough things to blow the company's money on?  Cheers!
Title: Re: JOE up 10% today
Post by: Buffetteer on February 09, 2011, 07:47:15 AM
Not often you see a company down almost 5% on takeover talks...what a roller coaster!
Title: Re: JOE up 10% today
Post by: enoch01 on February 09, 2011, 10:46:14 AM
Not often you see a company down almost 5% on takeover talks...what a roller coaster!

So is anybody interested at this price?  I haven't looked at it, don't have an idea of the value, but there's potential catalysts here.
Title: Re: JOE up 10% today
Post by: Myth465 on February 09, 2011, 11:15:22 AM
Not often you see a company down almost 5% on takeover talks...what a roller coaster!

So is anybody interested at this price?  I haven't looked at it, don't have an idea of the value, but there's potential catalysts here.

Still looks like dead money to me.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on February 10, 2011, 04:47:49 PM
http://www.bloomberg.com/news/2011-02-10/berkowitz-proposes-naming-former-florida-governor-crist-to-st-joe-board.html?cmpid=yhoo

Quote
Bruce Berkowitz of Fairholme Capital Management LLC, St. Joe Co.’s largest shareholder, is seeking to put former Florida Governor Charlie Crist on the real estate developer’s board.

Crist was named as an alternative candidate to Rodney Barreto, chairman of Florida’s Fish and Wildlife Conservation Commission, according to a regulatory filing today. Barreto may not be considered an independent director because he has provided services to St. Joe., Berkowitz said.

Crist “is well-known to all of you,” Berkowitz said in an e-mail to the board that was included in the filing. The former governor, 54, led Florida from 2007 until January.
Title: Re: JOE up 10% today
Post by: biaggio on February 14, 2011, 04:50:33 AM
Berkowitz +Fernandez step down from board this am according CNBC...not a good sign? Probably did not agree with hiring investment banker +/- other plans other board members may have?
Title: Re: JOE up 10% today
Post by: stahleyp on February 14, 2011, 09:30:53 AM
http://dealbook.nytimes.com/2011/02/14/fairholmes-berkowitz-resigns-from-st-joes-board/

Pretty crazy.
Title: Re: JOE up 10% today
Post by: Myth465 on February 14, 2011, 09:36:31 AM
http://dealbook.nytimes.com/2011/02/14/fairholmes-berkowitz-resigns-from-st-joes-board/

Pretty crazy.

Still looks like dead money to me.

Though we have a catalyst. I have no dog in this fight, but have a big tube of popcorn. Never seen Berkowitz mad. Should be interesting.
Title: Re: JOE up 10% today
Post by: twacowfca on February 14, 2011, 09:59:13 AM
Berkowitz +Fernandez step down from board this am according CNBC...not a good sign? Probably did not agree with hiring investment banker +/- other plans other board members may have?

Or perhaps there is merit to the assertion that their assets are not properly valued in today's market.  A most uncomfortable situation for a board member.  Food for thought. ???
Title: Re: JOE up 10% today
Post by: Buffetteer on February 14, 2011, 02:24:47 PM
There may now be a proxy fight for the company. I am long on JOE, but man, this thing is becoming a real mess.

http://www.cnbc.com/id/41579053?__source=yahoo|headline|quote|text|&par=yahoo
Title: Re: JOE up 10% today
Post by: Buffetteer on February 15, 2011, 07:24:54 AM
In case anyone is interested in reading a JOE company letter sent to its employees this morning:

http://www.sec.gov/Archives/edgar/data/745308/000129993311000494/exhibit1.htm
Title: Re: JOE up 10% today
Post by: Buffetteer on February 15, 2011, 07:37:49 AM
This is from a news report on a local Panama City NBC affiliate. It is in regards to a possible hostile takeover bid by BB:

"Although Fairholme holds only 29% of St. Joe's stock, insiders believe Berkowtiz can convince financial investors T. Rowe Price and Janus to pledge their 24% holdings to support him, giving Berkowitz majority control. Berkowitz hinted at the possibility Monday, telling Bloomberg News "It was clear to us we weren't going to be able to achieve anything further as directors. The only way we can be effective is as shareholders."





Title: Re: JOE up 10% today
Post by: Myth465 on February 15, 2011, 08:11:33 AM
In a take over bid wasnt he stronger with 2 board seats?
Title: Re: JOE up 10% today
Post by: Bronco on February 15, 2011, 08:25:11 AM
Is a mutual fund allowed to buy 100% of a company?  I would assume you lose RIC status on that.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on February 16, 2011, 06:33:10 AM
Bruce is getting hardcore in his fight against the board:

http://bit.ly/eLhqG5

Quote
The Fairholme Fund is starting a shareholder process to replace the existing board of St Joe. This was not a decision made lightly. We are not activists. We always try to support the boards, management and shareholders of our portfolio companies. We like when everyone wins. When we saw problems at St. Joe, we tried to make constructive changes within the board structure. We ultimately came to the conclusion that this was not possible.We believe in the following fundamental concepts:

• St. Joe belongs to its shareholders, not its board or management
• St. Joe management plans must reflect business reality
• St. Joe management must stop selling cheap to fund wasteful spending
• St. Joe management must be open, transparent and accountable
• St. Joe management must feel the pain and joy of their constituents
• St. Joe directors must lead by example
Who should be on the St. Joe board? It is your company as much as The Fairholme Fund’s roughly 500,000 shareholders. Let’s all decide.
Title: Re: JOE up 10% today
Post by: Grenville on February 16, 2011, 06:42:08 AM
I am impressed with Bruce. Here is his letter. Will be fun to watch.
http://www.sec.gov/Archives/edgar/data/745308/000119312511036957/dex991.htm (http://www.sec.gov/Archives/edgar/data/745308/000119312511036957/dex991.htm)
Title: Re: JOE up 10% today
Post by: Myth465 on February 16, 2011, 06:46:03 AM
I am impressed with Bruce. Here is his letter. Will be fun to watch.
http://www.sec.gov/Archives/edgar/data/745308/000119312511036957/dex991.htm (http://www.sec.gov/Archives/edgar/data/745308/000119312511036957/dex991.htm)


Again here is a man you have to respect.

Hell even I forget this sometimes and 100% of my net worth is in stocks.


St. Joe belongs to its shareholders, not its board or management
Title: Re: JOE up 10% today
Post by: txlaw on February 16, 2011, 08:19:57 AM
Great letter.  Apparently, Bruce B is on CNBC right now discussing the poison pill that management just adopted.
Title: Re: JOE up 10% today
Post by: bargainman on February 16, 2011, 11:15:16 AM
This is mildly amusing..
http://biz.yahoo.com/bw/110216/20110216006657.html?.v=1

“St. Joe adamantly opposes Fairholme’s efforts to obtain control of the Company without paying a control premium to all other shareholders. If Fairholme and its President, Bruce Berkowitz, want to take control of St. Joe, they should make an offer to all shareholders to buy it.

Since the Fairholme representatives on the St. Joe Board voted to approve the decision to explore financial and strategic alternatives, we believe that Fairholme should support that process by participating in it, rather than seeking to obtain control of the Company through a costly and disruptive proxy contest.

To date, Fairholme has not submitted for consideration any alternative business plan to enhance value for all St. Joe shareholders. If Fairholme and Mr. Berkowitz have an alternative business plan or strategic initiative that they believe to be in the best interests of all of St. Joe shareholders, they should propose it for consideration as part of the Company’s process for reviewing all strategic alternatives.”


Title: Re: JOE up 10% today
Post by: Rabbitisrich on February 16, 2011, 06:55:34 PM
Has Berkowitz outlined the operational changes he wants to enact?

Fairholme responds:

Andy Dietderich, principal outside counsel to Fairholme Funds, said “The Company did not read Fairholme’s release. A take-over? How can you take over a company by asking the other shareholders to choose directors? That’s the opposite of a take-over. Fairholme Funds has absolutely no intention of taking over anything. We are giving the company back to all its shareholders. It’s a dividend of governance.”
Title: Re: JOE up 10% today
Post by: bargainman on February 16, 2011, 09:01:30 PM
I'm surprised there isn't more commentary about this on this board.  Yeah I think Joe's board response is amusing, ie ridiculous.  It's amazing how boards under pressure by an activist always sound so shocked and incensed (Bruce isn't really an activist either!).  The amazing thing is that they are pretending to be on the side of the shareholders which is hilarious because.. Bruce *is* the shareholder!! I mean he owns 30% of the company!  The comment about 'controlling' the company is just ludicrous.  He owns 30% of the shares, he should have a major say as it is.  Also their poison pill doesn't make sense in that it doesn't protect them at all.  I'm pretty sure that Bruce wouldn't buy more shares, he doesn't have to!  He just needs to call up TRowe and the other couple mutual funds and he'll win.  Amazing.. when push comes to shove what management will do and say.

I'm not sure what Bruce has wrt operational changes, but my first bet is 'stop the bleeding'.. I mean they lost almost 100 million last year and their CEO makes 1.5 million?  I would guess he asked everyone there to take a salary cut and they didn't want to.
Title: Re: JOE up 10% today
Post by: Myth465 on February 17, 2011, 05:11:39 AM
Fairholme response. This is getting interesting.

That’s the opposite of a take-over. Fairholme Funds has absolutely no intention of taking over anything. We are giving the company back to all its shareholders. It’s a dividend of governance.”

http://www.gurufocus.com/news.php?id=122772

Gives short sellers some credit.


“This is not about strategic alternatives. This is about who is running the company. The board is hiding behind a false sale process. The business plan is broke. No one will buy it until it is fixed. I’m surprised Morgan Stanley is playing along. The only purpose of this exercise is to entrench the board. Is Morgan Stanley not collecting fees for that? No counterparty will take this board or management seriously. They have no mandate and must go.”
Title: Re: JOE up 10% today
Post by: Buffetteer on February 17, 2011, 06:34:42 AM
I agree, the board must go and go now. Berkowitz makes a great point in saying their resistance will only cost the shareholders money. It's inevitable, BB will win the proxy fight, the board should just accept it and resign.

Title: Re: JOE up 10% today
Post by: Myth465 on February 18, 2011, 05:15:38 AM
More color. http://www.gurufocus.com/news.php?id=122821

They will lose the proxy fight, and will waste millions doing it.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on September 16, 2011, 07:10:33 AM
Fairholme to take stake in St. Joe to 50%

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/09/16/financial/f063659D95.DTL

Quote
St. Joe Co. disclosed in a regulatory filing Friday that it entered a stockholder deal with its biggest shareholder, Fairholme Funds Inc., and Fairholme Capital, that will allow it to boost its ownership stake to up to 50 percent. Fairholme had been approved to buy up to a 30 percent stake previously.
Title: Re: JOE up 10% today
Post by: BargainValueHunter on December 13, 2011, 12:50:38 PM
Yes, this is an old thread but the title coincidentally is perfect for today... :)

http://www.fool.com/investing/general/2011/12/13/st-joe-shares-popped-what-you-need-to-know.aspx

Quote
At noon on Wall Street 1.5 million shares had already traded hands, more than twice the daily volume. There are a couple of things driving the stock, including the upcoming options expiration on Friday and a high short interest. An even 63% of St. Joe's float is sold short, making for a quick short squeeze when option volume spikes. That type of short interest can make for wild movements in the days before options expire, like they will on Friday.