Man, nobody, and I mean hardly anybody, is stupid enough anymore to buy a Toll Brothers house. I guess there might be 8,900 maximum still in the US (Toll's forecasted '06 unit sales), but will someone, anyone, tell them to read HP? At least negotiate 40% off.
HP calls on its readers to formally file an SEC complaint against the Toll brothers for their so perfectly timed insider stock sales. They obviously had inside information on the deteriorating conditions inside their Ponzi Scheme (oops, I mean business) and knew of cancellations before the general market, and then they traded on it, further enriching themselves.
Here's the debacle at Toll today. Man, I hope "The Banker" didn't kill himself...
Homebuilder Toll Brothers (TOL) reported a 48% plunge in third-quarter new orders and again cut its delivery forecast for the year, as the company blamed oversupply for the weak U.S. housing market.
Toll, the country's largest luxury-home builder, also warned that it is walking away from certain land option contracts, which will results in write-offs of deposits. The company said it will quantify this impact when it reports earnings later in August.
Based on its current backlog, the company expects to deliver between 2,500 and 2,800 homes in the fourth quarter, compared to its previous guidance of 2,900 to 3,300 deliveries. For its full 2006 fiscal year, the company believes it will deliver between 8,600 and 8,900 homes.
In a prepared statement, Toll Brothers CEO Robert Toll said the current housing slowdown first manifested last September and is "somewhat unique."
"It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors," he said.
"Instead, it seems to be the result of an oversupply of inventory and a decline in confidence:
Speculative buyers who spurred demand in 2004 and 2005 are now sellers; builders that built speculative homes must now move their specs; and nervous buyers are canceling contracts for homes already under construction.
The resulting excess supply has exacerbated the drop in consumer confidence, which first appeared last September, that was already a drag on new-home sales."
The company also said it saw an increase in its cancellation rates in a number of markets, including Orlando, Fla.; Northern California; Palm Springs, Calif.; Las Vegas; and Phoenix.
August 09, 2006
Toll Brothers plummets (again). The epic housing bubble is over. Bob Toll sold at the tippy tippy top. Where is the SEC investigation?
Posted by blogger at 8/09/2006