Famed mutual fund manager Bruce Berkowitz of Fairholme Funds dropped a bomb on the investment community of the St. Joe Company (NYSE:JOE) on Monday. 

According to a source of CNBC’s Mary Thompson, Berkowitz, whose fund owns about 29 percent of the company, wants to be Chairman of the Board, his Fairholme partner Charles Fernandez to be the Vice Chairman, Howard Frank (of Carnival Corporation) and Rodney Barreto (of Floridian Partners) to be added to the board, and Hugh Durden (the current Chairman) and three other directors to step down on May 1st at St. Joe’s annual meeting.

His plan envisions keeping with current CEO Britton Greene in place.

So far, investors responded optimistically as shares have soared 8.42 percent in Monday’s trading session to close at above $29 per share.

Berkowitz, a value investor, obviously sees value in St. Joe.

In past interviews, he stressed a business’ ability to generate cash.  St. Joe, however, has been, in aggregate, unprofitable and losing cash for the last five years.

The value, then, must be in St. Joe’s 576,000-acre land ownership in northwest Florida.

About the land, Berkowtiz said at an earlier interview that it is on the Gulf and surrounds a new international airport. Moreover, the region benefits from a recovering economy and population growth.

Now, if Berkowitz gains control, he will presumably work to unlock the land’s value.

How will he do so?

According to CNBC’s Thompson, Berkowitz plans to explore joint venture and bolt-on acquisition opportunities. Moreover, he wants to cut $60 million in expenses, lease 41,000 acres of land for $80- to $100-million, and break even in 6 months.

If Berkowitz's plan works, one unhappy hedge fund manager will be David Einhorn, who has maintained a short position on St. Joe since 2006.

On October 2010, Einhorn valued St. Joe’s swamp lands at just $7 to $10 per share.

Email Hao Li at hao.li@ibtimes.com