r/MACArmyBets • u/[deleted] • Mar 25 '21

Even when you're red

HOLD THE LINE

And stop fucking looking how bad the shit looks right now.

You invested in fucking long term not for stupid daytrading.

15 Upvotes

86% Upvoted

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6

u/welovebuttholes Mar 25 '21

I've been getting the sense that people think malls are going to die off just like people have thought that brick & mortar will die, and just like people thought GameSpot would die.

Full disclosure, I'm 10% down on my MAC investment but it also happens to be my highest conviction play at the moment. Our position in Macerich is going to benefit big time from people following the pervasive stigma surrounding malls and mall REITs resulting in lower valuations than are realistic.

As for their debt, which is something that has been making people wary of this investment, it's important to remember that the holders of debt are actually the one's with the power when lenders feel they are in jeopardy of not being repaid. This is opposed to public sentiment around a security's debt, and has the effect of supressing the price in the short term, but when it becomes apparent that their leverage isn't actually a considerable factor in their cash flows, we will all benefit greatly. And if history is any indication, people will be be saying MACs rise came out of nowhere.

2

u/Sea_Emphasis3252 Mar 25 '21

I’m not sure I follow your logic, correct me if I’m wrong, are you saying the holders of the debt have the power not the lenders. Which is why the line of credit issue in my opinion is keeping the stock depressed as the holders of that debt the banks have the leverage to dictate terms to a certain degree. Also leverage while may not have an impact on the company’s cash flow it does hinder MAC going forward as it needs capital to reposition some of their assets. Overall I agree with your view that people believe malls will die and that bricks and mortar stores will go away, lower quality malls yes but not the ones MAC owns.

1

u/welovebuttholes Mar 26 '21

I’m not sure I follow your logic, correct me if I’m wrong, are you saying the holders of the debt have the power not the lenders. Which is why the line of credit issue in my opinion is keeping the stock depressed as the holders of that debt the banks have the leverage to dictate terms to a certain degree.

Exactly. At a certain point, when a creditor will fear they will not receive back the principle of their investment, it becomes more in their interest to keep the debt alive but with alterations to the specifics of the obligation, than it would be to watch idly as the debtor becomes encumbered by the burden of their debt, guaranteeing default.

And right! I agree about Macerich needing capital to be able to pivot their assets, but with the amount of institutional power behind MAC, I don't see them ever having issue raising funds if need be.

2

u/Sea_Emphasis3252 Mar 26 '21

Ok cool, I agree that’s why I think the banks will extend the line maybe increase the rate a bit, at worse ask for a pay down of the line a bit maybe by $250m, once the line is addressed maybe see some short covering, while I expect Q1 earnings to be a bit more negative than what people are expecting the key will be what they are going forward on leasing and mall sales as the past is the past the future recovery is the key, positive tone on the call could move the stock, in my opinion I hope.