Wanna Buy 17M Shares of JOE?

[SHELLY]

St. Joe to Raise $580M From Stock Offer

JACKSONVILLE, Fla. (AP) - Real estate developer St. Joe Co. said Wednesday it will offer 17.1 million shares at $35 per share for total net proceeds of $580million.

The proceeds will be used to repay substantially all of the company's outstanding debt.

The offering is expected to close on March 3.

Deutsche Bank Securities Inc. served as sole underwriter of the offering.

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[Matt J]

Securitizing debt, where have I heard this before???

I wonder if I can do this with my personal debt. I'll just sell it out to "investors".

 

[full time]

Selling equities when the stock is off a third from same time last year ... ouch. Perhaps Joe will feel less pressure to liquidate its Walton County assets -- a little less competition would be welcome news to sellers.

 

[Matt J]

I don't think they'll be liquidating any holdings here. This is just a very good ploy to refinance your debt to 0% interest. Thus the old ledger shows a lot less money flowing out.

 

[SHELLY]

I don't think they'll be liquidating any holdings here. This is just a very good ploy to refinance your debt to 0% interest. Thus the old ledger shows a lot less money flowing out.

They're apparently going to use the money to pay off debt on their balance sheets. I vaguely recall reading an article (damn that JB on the rocks)where they were attempting to rework some of their debt, probably because they were nudging up against bond covenents and the lenders were getting antsy.

It might be a good thing for the company, but a bit sucky for the shareholders--spreading that penny per share of earnings out over an additional 17 million shares--talk about dilution :roll:.


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[Busta Hustle]

well the secret to pollution IS dilution...

 

[YoungFT]

As a stockholder you rarely want to see your ownership share diluted. In the case of JOE, paying down debt, when cash flow has all but dried up is the smart move.

We'll see how the offering is received in March and if the price is sustained.

For those on JOE's shareholder distribution list, you should be emboldened by the recent changes in institutional ownership - take them as an indication that we're on firm ground.

I still believe that JOE is a leading indicator of future NW Florida real estate value. In 4Q08 into 1Q09 (12 - 18 months after the recent run-up in stock price) we'll begin seeing some equilibrium back in supply and demand.