Largest U.S. Mall Owner Sues Gap for $65.9M

SPG is down over 50% for 2020

Digital Content Manager
Jun 4, 2020 at 11:17 AM
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The shares of Simon Property Group Inc. (NYSE: SPG) are up 2.4% at $74.57 this morning, after the biggest mall owner in the country sued apparel retailer Gap (GPS) for more than $65.9 million in missed rent payments and overdue charges, according to a lawsuit filed Tuesday in Delaware state court. Gap is not the only major retailer skipping rent -- many others have stopped making payments after the coronavirus pandemic forced them to shut down stores, sparking tension with landlords.

On the charts, SPG has been struggling to recover from the steep selloff it suffered to the $42 level in mid-March, when most states implemented stay-at-home orders and closed nonessential businesses. Earlier in January, before the pandemic hit the U.S., that shares were pushing against the $150 level. And although SPG was able to find support at the round $50 level in early April, the equity remains down over 50% year-to-date.

Ahead of the lawsuit, analysts were hesitant toward SPG. Coming into today, 10 of the 13 in coverage sport a lukewarm "hold" recommendation, while the remaining three carry a "buy" or better. However, the stock's 12-month consensus price target of $78.21 is a healthy 5% premium to current levels.

In the option pits, the appetite for calls is unusually high as of late. In the last 10 days, 4.61 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all readings from the past year, meaning calls are being picked up at a faster-than-usual clip. 

 

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