Why Millrose Properties Inc. (MRP) Went Down on Monday

We recently published an article titled These 10 Companies Led Monday’s Downturn. In this article, we are going to take a look at where Millrose Properties Inc. (NYSE:MRP) stands against the other stocks.

Wall Street’s major indices kicked off the trading on a positive note, all finishing in the green territory, as investors brushed off fears of growing global trade tensions.

The Dow Jones rose by 0.38 percent, the S&P 500 grew 0.67 percent, while the Nasdaq rallied 0.98 percent.

However, 10 companies defied a broader market optimism, mostly due to a series of stock rating downgrades from investment research companies on the back of poor earnings guidance and dismal earnings performance.

To come up with Monday’s worst performers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

An aerial shot of a large real estate investment trust, its properties sprawling across the ground below.

Millrose Properties Inc. (NYSE:MRP)

Millrose Properties Inc. saw its share prices fall by 13.95 percent on Monday to end at $23.01 apiece following the completion of Lennar Corp.’s spinoff of MRP to LEN stockholders.

The spinoff which was completed on Friday involved the distribution of approximately 80 percent of MRP shares to stockholders of LEN.

Each LEN shareholder as of record date January 21, 2025, received one share of MRP common stock.

Investors, however, quickly sold off positions in MRP to book early profits following Friday’s 16-percent premium from Thursday’s closing price.

MRP engages in land purchases, horizontal development, and homesite option purchase arrangements for LEN and potentially other homebuilders and developers.

While LEN is currently MRP’s only customer, the latter anticipates that its “first of its kind” public vehicle will be attractive to other homebuilders seeking to implement an asset-light strategy and believes that becoming a capital source for other homebuilders will provide for accretive growth to the MRP platform.

Overall MRP ranks 2nd on our list of Monday’s worst performers. While we acknowledge the potential of MRP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as MRP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.