Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Shares of Seritage Growth Properties Are Plummeting Today

By Matthew Frankel, CFP® – Jun 9, 2020 at 2:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The retail REIT is down more than 20%.

What happened

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 (SRG -0.33%) is plunging, with its stock price down by more than 20%.

Shopper holding bags and heading towards mall entrance.

Image source: Getty Images.

So what

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.

Now what

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.

Matthew Frankel, CFP owns shares of Seritage Growth Properties (Class A). The Motley Fool owns shares of and recommends Seritage Growth Properties (Class A). The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Seritage Growth Properties Stock Quote
Seritage Growth Properties
$8.99 (-0.33%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.