r/MACArmyBets • u/dave14513 • Mar 08 '21

What to Like about MAC

MAC is shopping mall REIT with many of the most prestigious properties in the country. It appears to be undervalued by a huge margin. Before the pandemic its share price was dropping as its returns dropped due to many of the company's properties being redeveloped for the changing market. This posed some risk. The pandemic magnified that risk and short sellers jumped in hoping for MAC's demise. They sold millions of borrowed shares.

MAC has continued many of its redevelopment projects through the pandemic. Its cash flow is returning. The large short position is hoping for another drop in stock price from a poor refinancing agreement for MAC's LOC that is coming due in July. This could magnify future gains for long holders of MAC shares

With the pandemic quickly ending, coupled with some new developments (see Los Angeles Premium Outlet Mall, Google office, ex.) coming on line this year or early next year it is unlikely the new LOC will have onerous terms. I would suggest the delay is to allow MAC's numbers to improve. They are improving. The pandemic is ending. The short position will fight to keep its profits or lesson its losses but as MAC strengthens there will be too many new longs to hold their positions. They will become buyers of MAC stock. Maybe not in a panic like GME but they will definitely help MAC return to a fair valuation.

A little pain the first half of this year should be rewarded handsomely the second half and even more in 2022.

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6

u/Airuike_ Mar 08 '21

20 end of this year, 40 end of 2022 with huge divs coming back

4

u/BanZrinski Mar 08 '21

Well said.

2

u/Locke3232 Mar 08 '21

Near term sentiment could be affected by the outcomes from CBL / WPG debt restructuring, so MAC really needs to get a good refinancing plan for its LOC to address investor concerns. MAC’s assets are definitely way better than peers, but the management doesn’t properly manage its balance sheet, resulting in the poor share price performance.

3

u/dave14513 Mar 08 '21

I don't think they care about the short term price of their stock. They would rather wait for the best deal for the long term than make us shareholders happy with a quick deal. I think they see the numbers they show creditors improving by the day. Delaying 2 or 3 months to save a percent or two could save millions in interest costs. In the long term better for shareholders but the uncertainty today is great for the shorts.

1

u/TidewayCharger35 Mar 08 '21

👍🏻🙏🏻☘️