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St. Joe And The School Bus

By: BigGator5 (Diary)  |  March 1st, 2011 at 10:00 AM  | 

RESIZE: AAA

The board crisis at St. Joe, has ended:

Fairholme Capital Management founder Bruce Berkowitz’s bid to replace the board of directors of Florida landowner St. Joe Co. ended Monday with the ouster of the company’s CEO and three other directors.

The Fairholme Fund – a mutual fund and St. Joe’s largest shareholder – also got to name four new board members, including Berkowitz, and agreed not to pursue any more changes to the board.

The high drama sees a shake up of epic narrative. I honestly could not have writen an ending such as this:

St. Joe President and CEO Britt Greene, who has been with the company for 13 years, resigned his seat on the board Monday. He will step down as president and CEO later this week, the company said.

Also due to resign this week are directors Michael Ainslie, John Lord and Walter Revell.

In addition to Berkowitz, Fairholme named three other new directors: Fairholme Capital Management President Charles Fernandez, former Florida Gov. Charlie Crist and Carnival Corp. Chief Operating Officer Howard Frank.

Surviving the board shakeup were Hugh Durden, Thomas Fanning and Delores Kesler.

So if my math adds up, Berkowitz will become chairman of St Joe. What that means in the short and long term, is yet unknown. Sure St. Joe has lost money and stock because of the real estate slump. I would bet you good odds that there is something wrong if St. Joe didn’t take a slight tumble during this time.

However my biggest thing in all of this is Berkowitz’s very naked power-play and Charlie Crist’s involvement. I would call Berkowitz’s tactics unnecessary and with overt hostility. Not a fun way to start your tenure as chairman of the board. I also have questions about why Charlie Crist was brought in on this board. Was he brought in for his face and name or was it his technical/busuness skills?

If I was also a voting share-holder, I’d be upset at not being able to vote on this new board. I don’t know their by-laws, but with such a shake-up, wouldn’t this need a vote?

Many questions, so few answers. Again, I am not a share-holder nor am I an employee of St. Joe. I have no skin in this game, other than I am a Florida resident who is worried about the dealings of one of Florida’s biggest companies.

[Cross-Posted On Practical State.com]

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  • Doc Holliday

    You don’t know who here is short JOE or long JOE. Considering Berkowitz was named mutual fund manager of the decade by Morningstar, it is possible some RS’ers have money invested in his fund, The Fairholme Fund.

    This is not your first diary criticizing St. Joe. I guess you can say what you want, it is not my business (it is the moderator’s business), but did you really say anything here? What allegations are you making? I missed them on the first read.

    I will give you my personal view. Since Berkowitz is a value investor with a record of buying into companies he believes will some day be worth more, I am going to proffer that he is doing what he is doing to make money, which is his job. He holds a large position in St JOE, it is reported to the SEC every quarter and he said many times over and over on teevee he thinks the company has a lot of value to unlock.

    This is called activist investing, it is legal and part of capitalism. So Berkowitz is above board, I have been above board and every word I just wrote can be easily checked on Google.

    So, what exactly is your game? Is it because Crist ? Yeah that must be it. He is on the board, so what? Berkowitz has been invested in this JOE a long time,

  • Doc Holliday

    All these guys, politicians, hell even former Generals get free board jobs, it is called the rich getting richer. I would not be surprised if Crist ends up on several boards. They are great jobs if you can get them. You get a nice paycheck, stock, and only have to work a few weeks a year.

    I know former Marine Commandant PX Kelly was once on the board of the former UST inc, the maker of Skoal and Copenhagen. You know, all those Marines dipping, now I see the conspiracy! :) He was also on the Ruger board. What a waste of a conspiracy, we still use the M9 and M4, instead of the Ruger Mini-14 and SR-9.