Upcoming Results - May 8I think this upcoming earnings release is a really really big one for both BPY and BAM.
The backdrop is this:
(i) Both BAM and BPY have been talking up its US$30 NAV/Share in a big way since the GGP acquisition in August 2018.
(ii) In backing up the NAV per share - BAM BPY and senior executives have been buying up the stock in a big way leading up to GGP acquistion and then after GGP with the unfilled SIB (@US$21/share!) in February 2019, and then more buying after the virus tanked everything in March 2020.
(iii) There is no question GGP has excellent real estate, however, it was becoming obvious that operationally, these mall assets were having problems and this became crystal clear when Mathrani left BPY to run the WeWork debacle.
(iv) The virus happened upon BPY at the absolute worst time given that they were clearly looking to buy time on their GGP mall assets. The real estate landscape is now officially on a fast track to radical change with Neiman Marcus Macys JCP and J Crew etc either bankrupt or heading there. Who even knows the long term implication of the virus on the office property.
(v) There is no question BPY is a flagship for BAM (and its single biggest investment) and it has been a huge failure at this point in time from a capital markets perspective and now it has real in the eye of the storm operational issues.
(vi) Prior to the virus, we had a jolt in the stock in January as it was included in the TSX 60 and then there was the Financial Times article which suggested impropriety amongst other failings.
I can tell you I went long on BPY after the GGP purchase, not because I wanted "exposure" to mall assets or office assets. I went long because BAM has a proven track record of surfacing value out of problem assets and furthemore, BPY had traded at significant discounts to its management touted NAV.
So I am looking for BPY CEO Kingston to put his best foot forward and lay out a plan for us long term loyal unitholders to surface the intrinsic value of our units. I am looking for offence, not defence. I am looking for BPY to play "consolidator" leader in the retail landscape with SPG. And if the only thing CEO Kingston is concerned about is who is paying their rent and who is not, then he needs to go to BAM's office and get on his knees and beg for a generous privatization bid from BAM (yes the same company CEO Kingston sold $30M in stock recently).
Make no mistake, I fully expect Bruce Flatt to stand behind his long term thesis on the intrinsic value of BPY's assets.
I believe in the end, us loyal unitholders will do well!
Still long and longer now,
Vette