The stock market is having a mildly negative day on Tuesday with the Dow Jones Industrial Average and S&P 500 down by 0.7% and 0.4%, respectively, as of 1:50 p.m. EDT today. But retail real estate investment trust Seritage Growth Properties (NYSE:SRG) is plunging, with its stock price down by more than 20%.
There isn't any specific news propelling Seritage lower today. In fact, the recent news involving the company has been very strong. Last week, Seritage announced that it had collected 65% of its expected April rent and 52% of what it expected in May, not including rent deferrals it agreed to. And 224 of the company's 280 tenants have reopened for business.
The problem is that retail REITs (and Seritage in particular) have been on fire lately. From June 1 through June 8, Seritage gained a staggering 170% in a sustained rally. In situations like this, it's not uncommon for a stock to get a bit overheated and pull back as many investors decide to take profits.
The recent news has been very good for Seritage, and the company now has a far better chance of making it through the pandemic in good shape than previously thought by many. But the market is struggling to value the business right now, and that's what we're seeing in its stock price action.