SEG

SEG is a post-spinoff (separated from Howard Hughes on July 31, 2024) collection of Lower Manhattan real estate and entertainment assets — the ~480,000 sq ft Seaport (Pier 17, Tin Building, Fulton Market, Cobblestones), 250 Water Street, and the Las Vegas Ballpark/Aviators. The investment case is asset value, not earnings: stockholders' equity of $457M works out to roughly $35.70 per share against a $27.12 price, so the stock trades at a discount to book, and the balance sheet is lightly levered (liabilities/equity 0.40x, long-term debt cut 62% to $38.3M). Revenue is also inflecting up — $130M in FY2025, +18.3% YoY — and the net loss narrowed to -$117M from -$153M in FY2024 (and off the -$838M FY2023 blowup), so the trajectory is directionally less bad.

The problem is that the operating business is deeply unprofitable and consumes cash. Operating margin is -90.6%, net margin -89.5%, and the company burned -$49.7M of operating cash in FY2025 while cash fell 53% to $77.8M. On that run-rate the balance sheet holds perhaps a year and a half of runway before management must sell assets or raise equity — and issuing stock below book value would be dilutive to the very asset value that anchors the thesis. The MD&A shows management already leaning on asset sales (the 250 Water Street purchase-and-sale, completed after year-end), which supports liquidity but shrinks the portfolio.