What happened

Shares of Howard Hughes Corp. (NYSE:HHC) fell more than 15% on Tuesday after the real estate developer said it would not be sold.

So what

In June, Howard Hughes announced that it was conducting a "broad review of potential strategic alternatives to maximize shareholder value." Those alternatives included spinning off some of its assets and putting the company up for sale.

"The Board and management are determined to close the significant gap between our share price and the company's underlying net asset value," CEO David Weinreb said at the time. Investors took that comment as a sign a sale was likely, and Howard Hughes' stock surged on the news.

A line chart that slopes up and then down, with part of the line that continues to slope up erased.

Image source: Getty Images.

Today, however, Howard Hughes announced that it had completed its strategic review but the company would not be sold. Instead, it would enact a "transformation plan" that includes the sale of approximately $2 billion in noncore assets, up to $50 million in cost cuts, and a plan to accelerate growth in its master-planned communities.

Additionally, Howard Hughes said CEO David Weinreb -- who has led the company since its inception in 2010 -- is stepping down. Paul Layne, who has served as president of Howard Hughes' Central Region, will replace Weinreb as CEO.

Now what

Today's decline suggests that many traders are heading for the exits now that the prospect of short-term gains from an outright sale of the company is less likely. Yet if Howard Hughes' new plan can help put the company on a stronger operational footing, patient, long-term investors could be rewarded.