Reddit ignites mall stock, letting fund cash out US$500m

New York

THE largest shareholder in high-end mall owner Macerich sold its entire holding for nearly US$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 US$20.25 a share, details in an amended 13D showed. The Canadian fund had owned 16.4 per cent of the company, data complied by Bloomberg showed.

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 towards e-commerce. The stock lost 84 per cent 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, AMC Entertainment Holdings and other heavily-shorted or out-of-favour stocks.

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

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

"We've been a long-term investor with Macerich and throughout this relationship they have been a valued partner," Dan Madge, a spokesperson 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 per cent of the float, data compiled by Bloomberg showed.

Lower rents and increased vacancies have plagued mall owners during the pandemic. Macerich owns 52 shopping centres across the United States, mostly in cities, said its website, including Kings Plaza Shopping Center in Brooklyn and The Shops at North Bridge in Chicago.

Macerich fell 15 per cent on Thursday to US$19.01. BLOOMBERG