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iStar Inc. (STAR)

NYSE - NYSE Delayed price. Currency in USD
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13.87+0.08 (+0.58%)
At close: 04:00PM EDT
13.87 -0.01 (-0.04%)
After hours: 04:10PM EDT
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  • e
    e
    Until management gets transparent on the uses of the cash, the market will expect STAR to plunk all cash it can into SAFE, an investment that has LOST over $1.2 BILLION in value over the last 15 months.

    Now that market has absorbed the Conf call - stock trades about where it was before the Conf call bragging about a "strong and transformational quarter."

    Two very troubling comments from the conf call:

    1. " So, in conclusion, it was a strong and transformational quarter for us in which we made a lot of important progress on each part of our strategy." 1-3-22 stock price $25.60 has transformed into today's stock price $17.70. "Strong" - that's not supported by the data. "Transformational" - that is supported by the data - a 30% drop in stock value is not the transformation we wanted but certainly it is transformational.

    2. Question "Kind of how you think about the uses of cash at this moment?"

    Jay Sugarman ........... "So we're evaluating all--everything and anything right now to make sure we make the best possible decisions as we go through the year, both with respect to the cash and with respect to the future architecture."

    No executable plans as to how to spend the cash from a project they have been working on for 3 years is really hard to believe and, if true, is very unsettling - i.e. see 3% price decline since conf call concluded.
  • e
    e
    1. STAR lost $48 million in 2 months on March 2022 (most recent) SAFE investment.
    2. SAFE is down almost 50% since Jan 1.
    3. Mark to market on STAR's SAFE investment is down about $1.0 Billion in 1 year.
    4. From the annual report - "Total imbedded gain in our Safehold holdings was approximately
    $1.5 billion at year end." Rough math shows imbedded gain today is about $500 Million.
    5. 1-2-22 STAR share price was $25.70 - Yesterday's close was $17.08.
    6. After all the good news at STAR - stock price is back to where it was one year ago.

    Interested to hear the spin management puts on this - most managers would get fired for this performance.
  • S
    Sherry
    With STAR's holdings of SAFE marked to market STAR's reported book value would be ~$30 per share. This leaves STAR selling at less than 60% of value--assuming that SAFE is worth current market price.
  • S
    Sherry
    STAR is the definitive long term investment since the bulk of their assets are coming to consist of very long term leases with terms of up to 99 years. These leases have some inflation protection--something like 3% per year if I understand correctly. So--rising interest rates cut the value of these leases and ultimately the value of the stock. The leases--and the value of the company--are worth much less in a 5% interest rate environment than in a 3% environment which we are exiting. This is kind of like buying a perpetual bond--it will fluctuate a lot with changes in interest rates. That's why 1/3 of the stock is sold short.
  • S
    Steven
    I've gotten the sense that a reverse merger may be off the table. If anything, STAR may buyout SAFE.
  • F
    FringDook
    too beaten up they've fixed up their balance sheet a lot.
  • e
    e
    I find STAR to be perplexing and consistently aggravating. The recent sale of assets only provided a temporary and small pop in price and we are now back probably below the price at the time of the sale announcement. I know there was an investment in SAFE (that they have lost $20 mil on in 2 months) but have not seen any information on what they intend to do with the rest of the $1.1 Bil cash from transaction they referenced in the earning call. To me the market is telling us $1.1 Bil in new cash will create NO NEW VALUE for STAR. Based on what I know, most price targets are way above current price but yet STAR is down about 15% from date they announced the sale. Steven said Sugarman is aggravating - I suggest that label be extended to the whole company.
  • F
    FringDook
    how much will they fetch for their net lease assets... hmmm hmmmm hmm
  • S
    Steven
    My takeaways from the call:
    1. $50M repurchase authorization of iStar
    2. Grand Vista has been sold (1 of 3 legacy assets at $97M). Slide 5 indicates $167M in sales proceeds (not sure if that is only from Grand Vista)
    3. We will get an update in Q4 on net lease asset disposal (which also coincides with the end of some of their JV’s in the net lease assets)
    4. When Matthew Howlett (B.Riley analysts) asked about monetization of ground leasing covering the debt, Jay said, “We're liquid. We're strong. I think you're going to see continued liquidity coming out of that legacy book. Any net lease transactions would only add to that liquidity. So we do think there will be opportunities to streamline not only the asset side of the balance sheet, but the liability side.... We're certainly looking forward to coming back in the fourth quarter and having a little more clarity. But this is the right moment for us to continue to push on some of these levers and the net lease lever is a big one.”
  • F
    FringDook
    $SAFE conversation
    Hmmm I'd like for the price to drop a bit on $SAFE so I can snag up some shares cheapy.

    $STAR set to report next week
  • C
    Constantine
    Looks like iStar is looking to unload all Net Leased assets, liquidating these assets means paying off the debt.

    What remains is a holding company with shares of SAFE.
  • S
    Steven
    A lot of PT raises. Raymond James to 33, KBW to 29, Berenberg to 41
  • S
    Steven
    Looks like iStar is close to selling the lot in Asbury. "iStar Drops $100 Million Suit In New Settlement Agreement". Seems like Asbury is still hot "Asbury Ocean Club celebrates record year in 2020" with "seven contracts already out for 2021"
  • S
    Sherry
    Please tell me where I am wrong. STAR owns ~66% of SAFE = ~35.2MM shares. That is =~.48 shares of SAFE per share of STAR. With SAFE @ ~81 that is equal to ~$39 for each share of STAR. Of course STAR has debt but also has other assets which are being gradually liquidated and which will cover a good part of that debt. If you believe that the price of SAFE is right then STAR has to be significantly undervalued.
  • C
    Cold Beef Cake
    Ummm, this company is severely undervalued. Their 2/3rd holding of SAFE, alone is worth 50% more than the market cap. Now they just retired a huge amount of debt and have a massive cash pile. And there's at least 25% of the common shares short. Huh??
  • N
    Nick
    Yahoo says that 22% of outstanding shares are short. Anyone have any insight as to why this might be? If you were to do some type of arbitrage, I would think that you would short SAFE and go long STAR.
  • F
    FringDook
    good time to invest in iStar $STAR. Their investment and management holding in Safehold $SAFE is worth more than their current market cap. Also I am following their progress in Asbury Park, NJ. The Asbury Ocean Club is beautiful and well received. They are the master developer of the town and have already had multiple successful developments and more projects planned. Improving their balance sheet. Their P/E will even out soon.
  • S
    Steven
    Updating slide 9 of the BoA conference iStar presented at, IStar has an adjusted asset value of $3.1B (assets- debt) based on the closing price of SAFE. That has iStar at $45/ share. Take iStar private!
  • F
    FringDook
    Upgraded to a buy at B. Riley $RILY financial. $STAR now has a price target of 35 pps
  • F
    FringDook
    I believe Asbury Park is for sale. They're gonna ring the cash register BIGLY on that one. The town has come a country mile since $star bought out Asbury Partners in 2009. LONG $STAR