Santa Monica-based Macerich Briefly Caught Up in GamesStop Stock Frenzy
By Jorge Casuso
January 29,2021 -- The Reddit-fueled stock market rallies hit home this week as Santa Monica Place's owner, Macerich Co., saw its stock prices soar before closing at a loss at Friday's closing bell.
The surge came after Macerich's largest shareholder -- the Ontario Teachers’ Pension Plan (OTPP) -- sold all its holding for nearly $500 million after the mall-owner's stock was touted in Reddit, according to Bloomberg.
“Macerich is the next GameStop,” one Reddit user wrote on the platform’s Wall Street Bets forum on Wednesday, prompting individual investors to buy up shares in the Santa Monica-based real estate investment trust company.
Macerich -- which owns 52 shopping centers nationwide -- saw its share price shoot up 72 percent by Wednesday, "then gave up all that gain and more to finish Friday at $15.69, or 29 cents shy of where it started," according to The Real Deal.
The massive share-dumping suggests a loss of faith in the company, the Los Angeles real estate news site wrote.
“The fact that OTPP decided to hit the eject button on its Macerich investment at seemingly the first feasible opportunity post-Covid could be interpreted as a dire outlook,” Vince Tibone, a senior retail analyst at GreenStreet, told the site.
Macerich has $1.5 billion in outstanding unsecured loans that will come due on July 6 and $800 million in mortgage forbearance against its properties, The Real Deal reported.
“The departure of OTPP appears to make Macerich more susceptible to activism or even an unsolicited takeout offer down the road,” said Tibone.
This week's wild stock ride comes after Bloomingdale’s Inc. confirmed on January 11 that it's anchor store at Santa Monica Place was among 45 stores it would close nationwide by mid-2021.
The announcement dealt a major blow to the already financially crippled mall, which reopened in 2010 after a two-year $265 million remodel turned the Frank Gehry designed indoor mall into a sleek outdoor shopping venue.
The going rental rate jumped from $350 to $400 a square foot to $1,000, according to a Wall Street Journal article shortly before the mall's reopening.
In 2015, the company confirmed its was considering an unsolicited buy out offer from an Indianapolis investment group for an estimated $22.4 billion ("Company Seeks to Buy Out Owner of Santa Monica Place," March 10, 2015).
Macerich shares jumped to $91.91, but the company rejected the offer, which it said “fails to reflect the full value of our portfolio of unique and irreplaceable assets and our positive growth prospects.”
Over a three-year period ending December 31, 2020, Macerich stock lost 84 percent of its value, according to Bloomberg.
The company "has been struggling for years and was battered by a pandemic that forced malls to shut down and pushed consumers toward e-commerce," the news site wrote.
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