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Meritage Homes Corporation Message Board

  • alstry alstry Apr 17, 2008 9:09 AM Flag

    MTH must be JOKING

    Raise less than $100 million in an equity offering?

    This company lost about $400 million last year pre tax....IN A BETTER SELLING ENVIRONMENT.

    What can $90 million do in the current environment with MTH's current needs other than provide a little extra funding for the executives retirement packages?

    Can't wait to read the S-1....if it ever comes out.

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    • I'm guessing they would like to buy $200 million of very cheap land to give them a chance of making some money in out years.

      But they can't afford to buy any land with their current balance sheet. The land they have now may not be great for the next cycle. They need some fresh new land at rock bottom prices to make any profits in future.

      Or they preparing for 3 more bad years in housing and need all the cash they can get.

      • 2 Replies to drugsman12
      • They need cash to survive, plain and simple, and they're not generating it, or enough of it, from operations or asset sales. And no lender in their right mind will cut a deal with them now.

        CTX is another good example here: selling off assets as fast as they can near the end of the quarter in order to make the balance sheet look better. Pathetic.

        These asset sales are like a white flag, an admission that they cannot make money engaging in their core business, which is building homes.

      • galaxysportsinc Apr 17, 2008 6:20 PM Flag

        I don't have a problem with issuing more stock. The number of outstanding shares will still be very low. However, I do have a problem with trying to guess what their motive is as others are doing on this board. As a shareholder I (and everyone else) has the right to know what the company's plans are for the 80 million. SO, why are we guessing??? Are you public or private??????????

    • alstry.... this is a very bad sign for the weaker builders... which is half the other publics... it plays into what i have been saying on CAPS.... the builders are heading for negative cashflow at the tail end of 2008

      • 1 Reply to floridabuilder47
      • This tells me several things:

        1) HB's are coming to the realization that the tax bill will get shot down

        2) MTH realizes the stock is way over valued.

        3) MTH is out of cash.

        I think it's strange that MTH would pay off its revolver only to turn around and issue stock. It makes me believe that they paid it down not because they wanted to but because they had to. They said they weren't in violation of their covenants but perhaps they realized they soon would be and the bank expressed they would not be issuing waivers. Thus MTH had to pay it off so figured might as well do it before earnings to get a boost in price before diluting equity.

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