market folly

In what is turning into a public analytical clash, hedge fund firm Hovde Capital Advisors has issued a counter-argument to the recent rebuttals. If you're just now jumping in on this, here's a timeline with links to the various presentations on the bullish and bearish cases on emerging-out-of-bankruptcy mall operator General Growth Properties (GGWPQ). No matter which part of the argument you side with, you have to agree that a public debate like this is a great thing to see. This is THE definition of 'two sides to any trade.'

Here's the timeline:

- May 27, 2009: Bill Ackman's hedge fund Pershing Square Capital initially presents a bullish case for GGWPQ

- October 7, 2009: Pershing Square later issues a macro look at the mall REIT industry

- December 15h, 2009: Hedge fund Hovde Capital Advisors issues their case for a short position in GGWPQ, entitled "Fool's Gold"

- December 15, 2009: Todd Sullivan of Valueplays.net issues a rebuttal to Hovde

- December 16, 2009: Whitney Tilson of hedge fund T2 Partners also issues a Hovde rebuttal

- December 22, 2009: Bill Ackman's Pershing Square issues a follow-up presentation as well


Now, that brings us to today's presentation (December 29th): Hovde's new piece on the short case for General Growth Properties, entitled "Setting the Record Straight." Below you'll find their 70-slide counter-argument against all of the claims made by the aforementioned hedge funds and investors:




You can download the .pdf here.

Will another wave of rebuttals emerge from the bulls? We'll have to wait and see. Right now though, it seems that Hovde is alone in presenting the short case for GGWPQ (publicly at least). We'll see if any other bears start to come out of the woodwork.

This is escalating into quite the analytical battle and we can only hope that more healthy debates amongst hedge funds emerge in the future. After all, analytical evaluations like all of the above ensure that investors are constantly keeping their theses in check.