The St. Joe Company Under Long Term Investor Investigation

If you are a current long term investor in common stock of The St. Joe Company (NYSE:JOE), you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
St. Joe Company (the)
Affected Securities: 

An investor in the St. Joe Company filed a lawsuit on behalf of those who purchased securities of The St. Joe Company (JOE) between February 19, 2008 and October 12, 2010 against The St. Joe Company over alleged violations of Federal Securities Laws. Meanwhile an investigation on behalf of current long term investors in The St. Joe Company (NYSE:JOE) shares over possible breaches of fiduciary duty by certain directors and officers at The St. Joe Company was announced.

The investigation by a law firm on behalf of current long term investors in stock of The St. Joe Company (NYSE:JOE) concerns whether certain current and/or former officers and members of The St. Joe’s board of directors and executive officers can be held liable in connection with the alleged Securities Laws violations in the lawsuit by investors who purchased St. Joe Co stock between between February 19, 2008 and October 12, 2010. According to the complaint filed in the United States District Court for the Northern District of Florida the plaintiff alleges on behalf of purchasers of the securities of The St. Joe Company (JOE), who purchased or otherwise acquired St. Joe securities between February 19, 2008 and October 12, 2010, that St. Joe Company, certain of its officers and directors, its underwriter and auditors violated the Securities Act of 1933 and Securities Exchange Act of 1934 by failing to disclose and misrepresenting certain material adverse facts which were known to defendants or recklessly disregarded by them.

Florida based St. Joe Company real estate development company reported decreasing revenue over the past four years by over 70%. Its 12 month total revenue went from $525.02million in 2006, to $371.55million in 2007, to $258.16million in 2008, and $138.26million in 2009. Its Net Income went from a Net Income of $51.02million in 2006 to a Net Loss of $130.02million in 2009.
Shares of The St. Joe Company traded as high as over $80 in 2005 before declining in mid 2006 to as low as $43.87 per share. During the second half of 2006 until mid 2007 St. Joes shares regained value to almost $60 per share in April 2007. In the second half of 2007 JOE shares fell to under $30 per share. During 2008 JOE shares were able to hold value until fall 2008 when the financial crisis hit the markets and JOE shares began to lose value. JOE shares fell to as low as $14.59 per share in March 2009. Since its 10year low in March 09 St. Joe shares regained value to its current 52weekHigh of $37.44 per share in April. St. Joe’s shares lost since then twice significantly value, once from April to June where JOE share fell from $37 to $22 per share, and recently from over $24 to under $20 per share. Shares of St. Joe Company fell after the Wall Street Journal and other news sources reported that Greenlight Capital Inc.’s David Einhorn, who was introduced as the man behind the early, early call that Lehman Brothers was in deep trouble, had given a 139-slide PowerPoint presentation at the Value Investing Congress in New York in which David Einhorn raised a number of challenges for St. Joe Company’s, including that the Company is accounting for untouched land as developed and will probably have to take impairment charges since only minimal write-downs have been taken on its real estate portfolio. Mr. Einhorn's presentation noted that St. Joe's "development plans have fallen flat, leaving it with 'ghost towns' and inevitable writedowns." For example, Mr. Einhorn said he would "generously" place a value of $17.8 million on the remaining residential development at St. Joe's Windmark Beach property while the company is carrying the property at $164.5 million on its balance sheet. Mr. Einhorn also stated that the Company "was 'stuck' after making an aggressive bet on beachfront developments that have gone nowhere, and that it was overvaluing the real estate holdings on its books."
David Einhorn proceeded to go through the various developments, citing St. Joe Company’s progress reports on file with local authorities. Einhorn reportedly mentioned a case of one town, out of 2,600 units planned by 2011, St. Joe Company’s only built 12 dwelling units and added “the local fire department said they wouldn’t build a fire station because there’s nothing going on here.” Einhorn reportedly also named other developments by St. Joe Company, such as a development that is advertised as beachfront, but appears to be no land in the development that’s actually by the beach, or another development that is next-door to a sewage facility. The Wall Street Journal further reported that that the basic thesis of Einhorn’s presentation was that “[St. Joe’s] holdings of Florida real estate are worth nowhere near the $746 million the company says they are worth.”
On this news, so the lawsuit, shares of the St. Joe Company fell $2.38 per share, or 9.7 percent, to close on October 13, 2010 at $22.16 per share, on unusually heavy trading volume. The following day the Company's shares declined an additional $2.42 per share, or 10.9 percent, to close on October 14, 2010 at $19.74 per share, again on heavy trading volume. Cumulatively, over these two days St. Joe's shares declined a total of $4.80 per share, or over 19.5 percent. St. Joe’s stock closed on November 03 at $1966 per share.