Greenland Holding's stock has dropped 55% in five years; WSJ's 2019 advice to sell was sound; how will Greenland USA raise cash for Atlantic Yards?

Remember the advice, nearly three years ago, from Wall Street Journal columnist Mike Bird to sell Greenland Holdings Group (aka Greenland Holding Group), the parent of the main Atlantic Yards/Pacific Park developer, Greenland USA?

He was right, as the company's stock price has dropped by more than half, as explained below.

Bird's 8/28/19 column observed that that, despite growing property prices in China, and Shanghai-based Greenland celebrating a Forbes rank for fastest revenue growth, there were reasons to worry. (Note: Bird's original tweet, cited in my post, was later deleted.)

While Greenland had cut debt in half, from a stratospheric figure, it had doubled "unearned revenues," which refers to properties bought by customers but not yet delivered. That left Greenland with a dangerously high figure of debt to assets of 89%, a bit higher than even some other large developers.

Indeed, with the pandemic and national policies upending previous patterns, Greenland's significant debts caused its credit rating to plunge recently to Selective Default, as per S&P, before recovering slightly.

A state bailout

Before that, as Reuters reported 3/15/22, Greenland was rescued "after Shanghai authorities told local state-owned enterprises (SOEs) to step in and buy new Greenland debt," thus precluding default on a $500 million offshore bond.

Greenland, though traded on the Shanghai Stock Exchange, is owned significantly by the government of Shanghai.

Reuters said country's seventh-largest property developer faced rising interest rates and new state-imposed limits on debt.

A need for cash

The upshot for the projects from Greenland USA seems to be a need for cash.

A hotel in the firm's Metropolis development in Los Angeles is up for sale, and Greenland Forest City Partners recently sold two "100% affordable" buildings in Atlantic Yards/Pacific Park, with Greenland USA gaining 70% of the revenues.

The question is what else they have to sell--future development rights to the railyard? to Site 5?--to fund the project going forward.

Stock price plunges

The 2019 Wall Street Journal article didn't mention Greenland's stock price, but, from my search, it was 6.17 renminbi (aka yuan) as of 8/23/19, down from 7.25 a month earlier. It reached 7.24 in July 2020, but has since plunged.

Just two months ago, it was 3.78. Today, it closed at 3.02, marking a nearly 55% decline in five years.

In other words, had investors sold short, they would've done well.

Screenshot via Google Finance