Good News: Hov will be taken over by issuing new shares to the bidder.
As you notice that the board of hov files to SEC on Jan 28, and it ask shareholders to vote for increasing the number of authorized shares of Class A Common Stock from 200,000,000 shares to 400,000,000 shares. Considering the size of authorized shares (current float only 100M+ shares), we can infer that hov will issue new shares to the bidder and essentially sell hov. So despite the dilution effects of the new issuance, the take-over news will push hov to around $9 per share. Look, the hov is a perfect target of take-over, because it is making money and because it has huge accumulative losses which is tax shield for a profitable bidder.
I generally hate the "takeover" talk because 99% of the time it never materializes and is just kooky talk to keep investors interested. If I've heard the words "takeover target" once, I've heard it a 1000 times on my investments. The share dilution is problematic because right now it's an unknown occurrence and just rumor. Rumor has sunk many a stock and I'm really not sure what KHov is doing here. I'd rather they pulled a "midnight massacre" and make an unexpected announcement on new shares rather then play the waiting game as the stock gets hammered over the next 2 months...then make the announcement.
In any event, right now I would not touch this stock until some type of resolution is completed on share dilution. Either do it now or make an announcement that there are no current plans to do this. One thing investers loathe is incertainty. Hov did their investors no favors here. The stock has dropped close to 25% in a couple weeks as markets continue to soar. It's time to make hay, not horse****
Guess now we know why CEO sold a whole boat load of shares recently. It does seem like we are in a little trouble here as shareholders without some kind of clarification from HOV. Although I am a little confused as last cc sounded very bullish to me. They already did a secondary last year and thought that was behind us.