There were more than a few quizzical looks in the newsroom this week when General Growth Properties said it would again list its shares on the New York Stock Exchange. Wouldn’t bankruptcy preclude the stock from being on the Big Boad? Not only does being bankrupt not keep your stock from being traded, but from the reaction of investors, it won’t even make your stock a sell.
Ilaina Jonas reports General Growth is not alone as having its shares trade on the Big Board while operating under Chapter 11 bankruptcy protection. A representative of the exchange did not know how many of the approximately 2,425 companies trading on the New York Stock Exchange were in Chapter 11. But a handful, such as W.R. Grace, have continued to trade on the Big Board post-bankruptcy.
General Growth is a bit different, still. It was delisted after its April filing and has now returned. The company has a market capitalization of over $4 billion, making it the 15th-largest publicly traded REIT of nearly 130 REITs traded on the NYSE. About half of General Growth’s shares are owned by hedge fund manager William Ackman of Pershing Square Capital Management and by Chairman John Bucksbaum and his family or family’s trust. Management is still calling the shots, even from bankruptcy, since the pervasive view – though not officially the view of the court yet – is that the company was sent into the tank by the credit crisis and not anything fundamentally wrong with its business. There is even an equity committee taking part in the bankrtupcy proceedings.
Clearly the stain of Chapter 11 is not worrying investors. The stock, on its re-debut, is up nearly 3 percent in early afternoon trade.