Einhorn Wins, Berkowitz Loses on St. Joe Drop

(Bloomberg) -- David Einhorn has the upper hand in his disagreement with Morningstar Inc.’s domestic equity-fund manager of the decade over St. Joe Co., based on the Florida landowner’s stock performance.
St. Joe rose yesterday for just the third time since April 28, a period in which the shares tumbled as much as 30 percent. Yesterday’s 2.3 percent gain followed 10 consecutive losses.

Last month, the stock fell for 15 trading days in a row.

The Fairholme Fund is managed by the award-winning investor, Bruce Berkowitz. He controls a 29 percent stake in St. Joe through Fairholme Capital Management LLC and has served as the company’s chairman since March.

Einhorn, a co-founder of the Greenlight Capital Inc. hedge fund and prospective buyer of a stake in Major League Baseball’s New York Mets, disclosed that he was betting against St. Joe in October. The stock was 23 percent lower at yesterday’s close.

“St. Joe has huge possibilities,” Berkowitz said last week during an interview with Bloomberg Television. “We can just wait for the property market to turn.” Fairholme Fund had 3.1 percent of its assets invested in
St. Joe as of Feb. 28, according to data compiled by Bloomberg.

The holding accounts for most of Fairholme Capital’s investment in the company, based in Watersound, Florida. The stock’s losses contributed to an 11 percent decline in Fairholme’s share price this year. The fund ranks in the bottom 2 percent of its peer group, according to Morningstar. American International Group Inc. is its biggest holding, and shares of the bailed-out insurer fell as much as 44 percent for the year.