The St. Joe Company Dropping On SEC Concerns (JOE)

Maybe David Einhorn has been right all along. The St. Joe Company

is down sharply in pre-market trading, almost 8% on reports that the SEC is looking into the company's accounting practices. The SEC is determining whether the company should have taken additional impairment charges of its real-estate assets. In a filing Monday, St. Joe said the SEC's notification of the inquiry doesn't indicate any of wrongdoing and it will cooperate with the SEC while the inquiry is ongoing. This is one of the more interesting cases, as back in October, David Einhorn revealed at the

that he was short JOE, and that the company was worth around $8-$10 per share. Bruce Berkowitz, of Fairholme Capital is long the stock, and the battle between the two hedge fund titans has been seen as something of a

In a statement last night, a spokeman for Einhorn's Greenlight Capital said, "St. Joe's valuation practices remain open to question, as it is hard to understand how the company invested hundreds of millions of dollars during the real estate bubble and haven't seen fit to take a material write-down." But in a note Tuesday, Keefe, Bruyette & Woods said St. Joe has been discussing and outlining its impairment policy since the investor presentation raised questions surrounding its practices. The firm said it believes St. Joe and its independent auditor, KPMG, adhered to generally accepted accounting principles and that the issue should be resolved successfully. At last check, shares of JOE were off $1.80 to $21.27, a loss of 7.8%.