Another day, another plunge; General Growth drops another 33%

Elk Grove Promenade mall developer on the verge?

Today General Growth Properties (GGP) shares dropped another 33%. It closed trading at $1.37 a share; in after hours trading shares traded as low as $1.20.

The Chicago-based real estate company is the developer of the now-stalled Elk Grove Promenade.

With it's price closing in on $1.00 a share, GGP faces the real possibility of being de-listed by the New York Stock Exchange. When shares drop this low they become vulnerable to the antics of penny stock traders, hence the de-listing.

Of more significance, with the steep drop in it's share price, GGP is capitalized at only about $367 million. The company faces liabilities coming due in the next several months in the BILLIONS of dollars.

With it's huge liabilities, weakened real estate market and national recession, it is unlikely another real estate developer, or any other business for that matter, would be willing to buy the company and assume it's crushing debt load.

As we see it, the more likely scenario has GGP declaring a Chapter 11 bankruptcy and selling off properties in an attempt to stay in business. As we like to say, this story continues to develop.