Safe and Green Development (NASDAQ: SGD) should not be confused with its former parent company, Safe and Green Holdings (NASDAQ: SGBX). Obviously, there are great similarities in names, continuing cross connections across the companies and so on but they are now separately listed organisations. Holdings is, really, a manufacturer of mobile homes. We can get a bit more fancy and call them modular buildings if we like and we probably will when we think of commercial structures. Development is the real estate arm of that same business line. So we can think of Safe and Green Development as a developer of mobile home parks - or get a bit fancier and insist upon modular building developments.
SGD stock rose 531% yesterday. SGBX rose a rather more modest 81%. There’s no particular news that explains either price movement. We can surmise a bit - if SGD rises then any residual holding in SGBX should benefit that company. But at least as far as we know there isn’t one of those. For SDG - recall, Development, the real estate arm - floated onto Nasdaq only a couple of months back. By way of a spin off of the subsidiaries stock to the shareholders of the parent company. So, SGD stock was distributed to SGBX holders: “ Safe & Green Holdings Corp. (NASDAQ: SGBX) (“SG Holdings” or the “Company”), a leading developer, designer, and fabricator of modular structures for residential, commercial, and point-of-care medicine, today announced it has completed the spin-off of its real estate development subsidiary, Safe and Green Development Corporation (NASDAQ: SGD) (“SG DevCo”). Starting today, SG DevCo will begin “regular-way” trading on Nasdaq under the symbol “SGD.”...(...)...”Holders of SG Holdings common stock received 0.930886 shares of SG DevCo common stock for every five (5) shares of SG Holdings common stock held on September 8, 2023, the record date for the distribution.”
Safe and Green Development stock price from Nasdaq
As we can see that hasn’t worked out so well. They only rang the closing bell just over a month back so that’s really not so well at all.
As to why the rise no, we don’t know either. Our assumption is simply that we’re still in that febrile stage after an IPO as people try to work out what the substantive value is. Which will include some rallies and momentum trades - which is what we think is happening here. It starts to move, more buy in and so it continues to move. The big trick about momentum trades is working out when they’re going to stop and then reverse. Good luck with that here.
