The St. Joe Company may have been able to show enough success with their earlier developments to make investors have faith in their plans in the Bay-Walton Sector, but Sahm Adrangi does not believe that this faith is correctly placed. The investors in this land development near Panama City Beach may have bought into the hype that St. Joe created, but Sahm Adrangi does not see their investments paying off any time in the near future or at all. Even if the holdings managed to sell beyond what is expected, there is no way that the company could meet the valuation that they had placed upon themselves earlier.
In the Spring of 2018, Sahm Adrangi and his company Kerrisdale Capital came out to the public as shorting the stocks of the St. Joe Company. There are several different factors that led the investment firm to make this decision as they are expected the share price to drop significantly in the near future. Kerrisdale has no doubt that the land holdings that St. Joe has are completely overhyped and can in no way resemble the promises made by the company.
St. Joe’s is based in the panhandle of Florida and develops land for different uses. While they have seen a considerable amount of good sales for their beach-front developments, the same can’t be said for the Bay-Walton Sector that has been in development for more than a decade. Despite being in the works for so long, nothing much has come of the land that is described as mainly swampland filled with pine forests that are more suited for industrial use.
According to Sahm Adrangi, St. Joe’s keeps telling its customers stories of upcoming success in the area that he believes is purely fantasy at this point. As of now, there has been such little progress that Kerrisdale couldn’t even find any filed building permits on record for the area. Most of the property that held any real value has already been sold off and most of the land that remains is inland and desolate. In combination with other factors, Sahm Adrangi expects his short position to be a success.