Short Case for GGP
In one corner, Bill Ackman and Pershing Square's Long Thesis on GGP. In the other corner, Hovde Capital's Short Case for GGP.
General Growth Properties - Short Case
12.16.2009
General Growth Properties - Short Case
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7 comments:
http://seekingalpha.com/article/178502-general-growth-properties-rebutting-the-bears?source=hp_wc
http://www.valueplays.net/2009/12/the-general-growth-short-thesis-lacking-uses-questionable-data/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ValuePlaysFeed+(Value+Plays)&utm_content=Google+Reader
hunter- you didn't actually read the presentation, did you?
Hunter, even Hovde knows it's not a quality presentation. Anybody that attended college and can reason with any shred of significance can see that. I can't believe you posted this garbage and called it "a very well laid out presentation."
I think Whitney Tilson's rebuttal says it all: http://bit.ly/5IGuhf
Thanks for posting up Hovde's presentation, the situation is certainly an interesting one.
Until Tilson and Todd Sullivan start segregating the Rouse assets and the GGPLP LLC assets I cannot even begin to listen to their arguments. They could also convince me if they brought up a plausible argument of substantive consolidation, but alas, no one has done that either. Further, making the assumption that cash flow to the equity will be the same as it was pre-org is blatantly wrong - the re-org of the soon to exit mall properties assume higher amortization payments i.e. less cash flow to equity.
Another take...
http://seekingalpha.com/article/178615-why-eric-hovde-is-wrong-about-general-growth-properties?source=email
Hunter-
Hovde's valuation conclusion may be right in the end (who knows if it will be for the right or wrong reason). And while I haven't seen anyone do the analysis you suggest I think Tilson and Sullivan highlight some points on data consistency and comparability that should not be overlooked.
Hunter:
It's a pretty weak analysis.
When you start taking top line numbers to generate and EBITDA, you end up ignoring the specifics. For example, $534.9 mm of impairment charges are included in 9/30/09 YTD vs. $116,6 FYE 12/31/09. So $418.3 of the $683.6 mm change is due to "impairment charges," which are non-cash and are, generally, one-off adjustments.
There are other items, both favorable and unfavorable, that are evident if you read the statements and notes; but this analysis seems to be conducted from a 100k altitude. In distressed, you not only have to see the trees from the forest - you need to be able to test the bark.
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