Why Is St. Joe's Down Today? (JOE)

Yesterday The St. Joe Company JOE announced that it would be seeking strategic and financial alternatives, or in other words, a better way for its share price to move up. So why are shares down around 4% today, when they were up around 10% in pre-market trading? It could be that the shorts are taking one last stand in this name, before they are blow to smithereens by Bruce Berkowitz, and the rest of the shareholders of St. Joe. It could be simple profit taking after the stock has run from around $19 since David Einhorn announced he was short the name at the Value Investing Congress. It's been seen as a battle of the industry titans with Einhorn being short St. Joe, while Berkowitz is long the name. Despite this, Berkowitz said St. Joe still had a lot of value to be created over the long haul, as it was still carrying a lot of the land on its books at 1930's value, something which Berkowitz claims is ridiculous. Berkowitz has responded to this by shaking up the company board, putting himself and his partner Charlie Fernandez on the board at St. Joe, and will look to maximize shareholder value for all of its shareholders, not just Fairholme Capital shareholders. Generally when a company announces "strategic alternatives," it tends to hold onto most of that gain for at least that trading day, it doesn't evaporate as quickly as the gains today did. The market is telling us that shares of St. Joe are overvalued here, something that Berkowitz did not dispute at the Harbor Investment Conference. With of all this being noted, today's price action is a little concerning to shareholders of St. Joe. Perhaps someone in the know is making a bet that the company will be subject to a "take-under." Only time will tell on this situation, but it is definitely something to watch as it continues to play out.