Throughout his career as the Chief Executive Officer at Kerrisdale Capital Management, Sahm Adrangi has made his company a lot of money by researching companies and short-selling their stock if he sees looming problems. Shorting a stock is when an investor borrows stock from a lender only to sell them immediately and buy them back to return once the price has dropped a significant amount. While some people have a negative opinion about this type of investing, Sahm Adrangi is a value investor who only shorts business that he thinks are operating in a dishonest fashion. By bringing attention to their misleading promises and reports, these companies are forced to either clean up their act and deliver the promised product or see their stock price drop significantly.
This is why when Sahm Adrangi released a report about the St. Joe Company with Kerrisdale Capital, a lot of investors, including St. Joe’s, took notice. After their promised land developments from over a decade ago have remained relatively stagnant, Sahm Adrangi thinks it’s just never going to happen, at least in anything resembling the promises St. Joe has made. While they are trying to use their popular beachfront developments as an example as to what their planned communities could be, Sahm Adrangi does not think the currently swampy land has that potential.
Located in central Florida, the area in question is completely isolated from most of the attractions in the state. Kerrisdale’s research showed that there was not much done in the way of filing permits or getting inquiries about the development done, but St. Joe just keeps pushing back the deadlines of the desolate land development and insisting that there will be a pay off soon. Unfortunately, in order for St. Joe to keep the promises to the investors that led to their $1 billion valuation, St. Joe would have to have some record-breaking sales in the entirety of the United States. In fact, these sales would have to continue for the next 50 years and would involve thousands of properties both commercial and personal being sold a year.