Berkowitz writes to St Joe Employees as the new Chairman

Exhibit 99.1

Associates of St. Joe:

These past months have not been easy — especially, for you and your families.

Your new Board understands this and our responsibilities to all stakeholders of Joe. We are already working hard for a better future.

Charlie Fernandez and I have traveled the globe twice in the past few months discussing all of the possibilities at Joe with top-class organizations.

We have asked leaders from all over the world to see the opportunities for themselves...and they’re coming.

St. Joe is a national treasure, capable of developing world-class communities for work and play. We will not waste these opportunities.

Today starts a new Board with fresh eyes and ears. Your new Board — with experience that will benefit Joe.

Governor Charlie Crist brings to Joe his fight for the people of Florida and, in particular, this very special part of our State.

Howard Frank, the Vice Chairman and Chief Operating Officer of Carnival Corp., brings to Joe decades of business success.

Charlie Fernandez and I bring Fairholme’s shareholders, clients and potential partners for win-win solutions.

We are moving fast to create a new vision, a meritocracy — where you are paid for performance, no matter your position. We will build a company with no ceilings.

However, I will not sugar coat the current situation. St. Joe is losing money, selling valuable assets to cover losses and is under attack.

We cannot continue on this course for long or there will be no Joe. Starting today, we will not continue down this road.

St. Joe will have the capital it needs, will build on what you have already done and will quickly move forward.

Joe will become a model of what can be.

My personal commitment to you is to take whatever steps are needed to make Joe successful.

I know change is painful, but the seeds of greatness are planted during tough times.

Hang in there!

Bruce

Revisiting St JOE Short Interest

As per the latest institutional holding from
http://investors.morningstar.com/ownership/shareholders-overview.html?t=JOE&region=USA&culture=en-US
and my guess of who will not sell the stock this is the
total number stocks not available in market for trading = 27.7+13.4+11.6+9.6+4.8+2.2+3.1 = 72.4

Float = 92.6 - 72.4 = 20.2

Sold Short = 25.6
http://shortsqueeze.com/?symbol=joe&submit=Short+Quote%99

If the shortsqueeze.com data is correct the number of shares sold short has actually increased from my last writeup. This can get really interesting since as of today the number of stocks sold short is much higher than the traded float even after not including another 10 million shares that are held by Franklin,Fidelity and Vanguard group.

St Joe Short Interest

I recently bought JOE at around 20 bucks a share. The stock price is falling like a rock throughout the year. But things are getting interesting. I am not going to comment here about the underlying valuation of the company but just about the stock itself.

As of today(11/17/10) in millions

Total outstanding shares : 92
Total shares sold short : 21.6
Average daily volume : 2
Days to cover short at this volume : 18

Now this stock is liked by long term value oriented investors who I can speculate would not be selling the stock at these prices. Most likely they will be buying more. Lets find out who these people might be

1) Fairholme Fund : 27 (including holdings in privately managed funds besides Fairholme fund)
http://www.thestreet.com/story/10890674/1/berkowitz-to-einhorn-thank-you.html?cm_ven=GOOGLEN
2) THS Partners: 4.8  ( long term long only investors)
http://www.thspartners.com/philosophyprocess/process/
3) Third Avenue Management: 2.2 ( there is no way they will be selling)
4) Royce & Associates: 3.1 (Again a value investor that might not sell)
5) Janus Capital Management: 10.3 ( JOE is held in Janus Contrarian fund. I am not confident about them but since they are also value oriented fund I may speculate that they wont also sell at these prices)

Hence,
Total stocks not available in market for trading = 27+4.8+2.2+3.1+10.3 = 47.4

Assuming all of the above is true, 21.6/(92-47.4) = 48% of the float is sold short.

If the short interest rises further or if the stock price falls further it will be a good trade to buy some out of the money CALL options on this stock expiring in 6 months or so.

What do you think ?

I am not sure how many shares David Einhorn have shorted. If its a big position then IMO he should start covering soon.

As of today option expiring in Mar 18, 2011 to buy JOE at $17.5/share is selling for $1.7/contract