Reddit Ignites Mall Stock and Fund Cashes Out $500 Million

(Bloomberg) -- The largest shareholder in mall owner Macerich Co. sold its entire holding for nearly $500 million when the stock soared after being touted on Reddit.

Ontario Teachers’ Pension Plan sold 24.56 million shares on Wednesday at an average price of $20.25 a share, according to details in an amended 13D. The Canadian fund had owned 16.4% of the company, according to data complied by Bloomberg.

Macerich, a real estate investment trust based in Santa Monica, California, has been struggling for years and was battered by a pandemic that forced malls to shut down and pushed consumers toward e-commerce. The stock lost 84% of its value over a three-year period ending Dec. 31, 2020.

Then comments began appearing on Reddit boards including r/wallstreetbets, the subreddit now famous for helping to fuel an astonishing rise in GameStop Corp., AMC Entertainment Holdings Inc. and other heavily-shorted or out-of-favor stocks.

Macerich shares jumped 68% in four trading sessions and reached about $26 at one point on Wednesday on frenetic volume -- allowing Ontario Teachers to get out.

“We’ve been a long-term investor with Macerich and throughout this relationship they have been a valued partner,” Dan Madge, a spokesman for the Teachers fund, said in a written statement. “Moving forward, we are focused on scaling and diversifying our global real estate platform, and growing our existing Canadian real estate business.”

One Reddit user touted Macerich as “GameStop’s landlord,” saying it has “the potential to offer a GME-like short squeeze, but with better downside protection.” The short interest is 57% of the float, according to data compiled by Bloomberg.

Macerich owns 52 shopping centers across the U.S., mostly in cities, according to its website. That includes Kings Plaza Shopping Center in Brooklyn and the Shops at North Bridge in Chicago.

Its shares fell 15% on Thursday to $19.01. The stock jumped when trading opened in New York on Friday, but it was down less than 1% as of 9:43 a.m.

Heavily shorted retail property owner Tanger Factor Outlet Centers Inc. has also seen its shares shoot up in January, gaining 63% this year.

The company’s stock closed 2016 at $35.78. Four years later, it had lost 72% of its value and finished 2020 at $9.96.

Tanger slipped 9.4% on Thursday, closing at $16.19. The stocked jumped as much 7.2% on Friday, before paring the gains.

Even with the recent stock gains for mall owners, the “fundamental outlook for malls and outlets” has not changed, according to Green Street.

“The unusual trading activity is being driven by retail investors fueled by social media encouragement and speculation,” the report said.

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