SRG - Seritage Growth Properties

[beaufort]

I think the latest VIC write up captures the current situation very well.

As a shareholder, I am also encouraged by the reported significant short interest.  This will fuel the fire for gains eventually.

[CorpRaider]

Statistically, historically, (in the academic literature and elsewhere) high short interest is a correlated with underperformance, right?

<Edited to clarify>

[beaufort]

I think I understand the question. 
My anecdotal perspective is that short interest has always been bigly, but it has gone up somewhat.

[aalexa1225]

Can someone share the VIC investor write up?

AOA

[LongTermView]

This part of that latest VIC writeup is important:

at some point, it will be highly accretive to Seritage if Sears vacates all of the space in the SRG portfolio (either voluntarily or in bankruptcy). In the very short term, the loss of operating income might prove challenging. In the long run, however, if you believe in the redevelopment proposition and the value of the underlying real estate, it would be far more valuable to be able to reclaim 100% of the Sears GLA than just 50% at most locations where Sears is paying rent that is meaningfully below market rates.

It is kind of related to a point made in today's https://www.wsj.com/articles/surprise-outlet-malls-are-hot-1490094007 article:

The strong performance is partly due to the lack of department stores such as Macy’s, Sears or J.C. Penney in outlet centers, which cater to individual brands such as Coach Inc.

[koshigoe]

It's interesting that arguably one the best investment ideas in the current market could also be one of the most highly shorted stocks on the entire NYSE.

Sort of smells like the Wash Po opportunity in the mid 1970s when everyone knew it was worth 4x but no one bought except for those like Buffett and Berkshire

[beaufort]

I am not familiar with academic literature on short interest correlations.  I will paraphrase Buffett and say that we pay a hefty price for a cheerful consensus. 

[koshigoe]

Looks like Seritage has improved their website and added more details on development plans at a few locations. Has anyone participated in a stock yield enhancement program, loaning out their shares to shorts?

[beaufort]

The updated website looks great.  Not sure about lending out shares because IB won't let me do it in Canada.

I am also wondering whether we might see Seritage buy the next 1B in RE that Sears says it is shopping around.  The timeline would presumably be in the next year or so given Sears' cash burn.

[Mephistopheles]

The updated website looks great.  Not sure about lending out shares because IB won't let me do it in Canada.

I am also wondering whether we might see Seritage buy the next 1B in RE that Sears says it is shopping around.  The timeline would presumably be in the next year or so given Sears' cash burn.

I doubt it. They already have I think ~$500 million, going off of memory of development costs in the pipeline that they will need to fund. And you can bet Sears will be closing 100s more stores that they will have on their lap in the next year or two. Don't really have the capital to take on more stores.