Standard Pacific: The First Major Homebuilder to Go?
Keep in mind that, 3-4 of these homebuilders are technically bankrupt already, and they are only “alive” because the banks keep changing the terms of their lines of credit and covenants. These are all great short candidates as well (there is no homebuilder short ETF either), and this time I’d ride a few of these to $0. Why, because that’s where they are heading, short of some white knight acquisition.
2 responses so far ↓
1 Brian McMorris // Jan 18, 2008 at 3:53 pm
We have been talking about this for a while on this blog. I don’t know if John is a stock investor / trader, but he said it early (2006?) that some homebuilders need to go out of business before the business can get back to good health. That continues to be true.
LEN, KBC, WCI, there are many other good candidates to go broke. This is the only way to get the industry to stop over-building so prices will stop falling.
2 az mls // Jan 21, 2008 at 10:51 am
I think WCI is #1, but BZH is definitely up there. They are fighting a mortgage fraud investigation in Charlotte at the same time that they are having all the same operating problems as the rest of the industry.
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