Kerrisdale Capital’s founder and head Sahm Adrangi has recently released a critical report regarding an area of Florida property that is under development by The St. Joe Company. This area of the property is located in the region of Panama City. Sahm Adrangi has been particularly critical of the $1 billion valuations that have been assigned to the value of this land. His stance is that this valuation is far too high. This was all a part of a twenty-eight-page report that Kerrisdale Capital Management issued in regard to the development project being undertaken by The St. Joe Company. Sahm Adrangi points out that there are numerous reasons why this property should not be valued at its current price. These issues include an issue with the largest shareholder in the project as well as land holdings that have generally been overvalued.
The basic breakdown of Sahm Adrangi and Kerrisdale Capital’s assessment of The St. Joe Company’s situation is that the land is worth significantly less than the current valuation, there is optimism over the budget related to this project that doesn’t merit the overall optimism that surrounds it and foremostly, the Fairholme Fund will have to significantly reduce its stake in the project due to new rules regarding liquidity. At the end of the day, Sahm Adrangi reasons that The St. Joe Company has made a lot of promises to its investors over the past decade that this project has been going on, but those promises have not yielded results. He is forced to conclude that the overall plan for this piece of land is simply not realistic.
Kerrisdale Capital Management is a firm that focuses on investment and does solid research in the area of value investments. The company was founded in 2009 by its CIO Sahm Adrangi. Early on in the firm’s history, it became well known for its exposure of Chinese companies that were operating under false pretences. This outstanding work has helped Sahm to become one of the most critical figures in the investment banking world today. He often speaks at financial industry gatherings across the United States and has been featured in publications such as the New York Times and the Wall Street Journal.