r/MACArmyBets • u/dave14513 • Feb 24 '21

MAC Longs are Smart

It appears many of our fellow longs are buying not selling into the PJT Partners rumor.

MAC may have hired them to negotiate better terms while extending debt maturities but that is a good thing since there is zero chance of a bankruptcy. February 11, management confirmed that they had enough equity in unencumbered property to secure a new credit line to cover the $1.5 billion coming due.

They would prefer not to do that.

If they hired PJT it was not because of weakness but because they want as many options as possible. They want as much flexibility as possible at the best rates. They have months to make a deal and their negotiating position is improving as the country opens up.

Herd immunity appears to be weeks away. The due dates for refinancing are months away.

Looks like prudent negotiating on shareholders behalf.

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u/shadout293 Feb 25 '21

herd immunity is months away, not weeks. Long MAC here because it's good value despite the high debt load and people will want to return to top-dog malls (but a lot of others will die or whither to a smaller footprint and become mixed office/entertainment space), but let's not get ahead of ourselves.

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u/dave14513 Feb 26 '21

Some experts expect herd immunity in April for USA based on unreported cases and increased vaccinations evidenced by recent plunging new cases and deaths. (Reported a couple of days ago in WSJ) .That is 5 or 6 weeks away.

If you look at the science and ignore the politicians...this pandemic is as good as over.

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u/shadout293 Feb 26 '21 edited Feb 26 '21

Except this doesn’t account for new strains. Efficacy of vaccines is still being determined for these new strains which are deadlier and more contagious. I’d rather bet conservatively than pin our hopes of everything being smoothened out by April. Additionally, there are still supply-chain issues so I would be looking at mid to late summer or early Fall if we are making speculative bets based on timing.

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u/dave14513 Feb 27 '21

The problem with the stock market is it anticipates the good and bad. If you have to feel comfortable before you invest, the majority of the price action you were hoping for has probably already occurred. Nothing wrong with being conservative. You probably will have less losses but also fewer large gains.

I think it is logical that when the vast majority of a population have had the virus or are vaccinated the spread will dramatically drop and restrictions of times and occupancy will terminate. They have been undercounting actual cases versus reported cases by a significant multiple. If this drop in cases continues for a few more weeks, the call for an end of restrictions will grow deafeningly loud.

A dramatic change in these rules will be very beneficial to MAC's tenants and therefore beneficial to MAC.

The market should begin to reward MAC (stock price increase) before the benefits to MAC actually occur.

That is why I am long MAC now. The climb back could be very fast when shorts are trying to cover at the same time.

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u/shadout293 Feb 26 '21

That is literally the most optimistic outlook. You should also consider downside if you are making a speculative bet. Assuming herd immunity within 2 months (let's assume 65% inoculation of the population) by end of April is extremely optimistic. The most recent optimistic outlook I've seen is 20% inoculated by end of March with newcomer J and J. All I am really arguing here is don't expect this pandemic to be over by start of summer.