Home Builder Standard Pacific shutting down???
A few weeks ago, I blogged about SPF liquidating an entire community near Palm Springs at over 40% off. It was a community of million plus homes where NOT A SINGLE home was sold since the community opened over a year ago. The sale involved 5 models and 8 specs. The homes were liquidated at over 40% off and not a word was said to stakeholders.
Now this today from very desireable Santa Rosa, Sonoma County California.
“After selling just 16 homes in an entire year, Standard Pacific Homes is tired of waiting for a housing turnaround and aims to auction off the rest of its Santa Rosa subdivision in a single day. Today’s auction of 17 homes at Avondale is different in one respect: This is the first bulk sale of newly built houses in Sonoma County. Standard Pacific is resorting to an auction, in part because it must meet sales goals for shareholders
‘They have to make quarterly numbers and that’s obviously a driving factor. This is a strategy to move inventory,’ said Ken Stevens, CEO for the Danville auctioneer conducting the sale....”
Homes are sold to the highest bidders once a minimum bid is reached. The minimums range from $195,000 to $215,000 for homes once priced at between $424,900 and $479,900....
A Standard Pacific official did not return calls seeking comment.
I couldn't find a word about this sale on their website. I even called a friend who lives in Santa Rosa and he wasn't aware of the sale. Why wouldn't SPF put out a press release like DHI if it was trying to get top dollar for shareholders? Why not make the sale prominant on their web site?
Management has not said a word about either the Palm Springs sale or Santa Rosa sale. What is going on at SPF? Are they quietly shutting down communities without informing stakeholders???
If SPF is having trouble in Palm Springs and Santa Rosa, what the hell is going on in the more challenged areas like Bakersfield and Sacramento? Why is SPF concealing these sales from stakeholders and not advertising them prominantly on their website to maximize revenues for shareholders?????
The following are simply a chronological string of behavior by SPF's management and the board over the past year:
CFO Parnes dumping tens of thousands of shares in November in the twenties while telling shareholders SPF will be profitable in Q4 2006. SPF had huge losses.
CEO Scarborough projecting profitability for 2007 in February KNOWING he is liquidating homes at losses with a negative outlook while insiders selling shares. SPF lost hundreds of millions in 2007.
Scarborugh putting out fanstastic delivery projections while dumping his own shares in May. Never came close.
In August, in unprecedented behavior, pratically the entire board, including Jeff Peterson, and some executives are all buying a small number of shares in the public markets just before the most dilutive shareholder unfriendly convertible offereing in the company's history.
Jeff Peterson buying a few more shares in November just a little while before he is "unexpectedly" named CEO with a million dollar compensation package in a company losing hundreds of millions per quarter.
In December, reporting impairments as % of land owned at the end of 2006 as opposed to current land holdings potentially giving a misleading perpective of stated book value and burying this fact in a footnote to a slide presentation.
Secretely liquidating entire communities at huge discounts. No permanent bank amendment announced. Seriously folks, if you were going to hold an auction and you wanted to maximize dollars, wouldn't you put out a press release like DHI did?
Don't you think stakeholders are entitled to know that is management team is liquidating entire communities? The arrogance of this management team could be unprecedented among the publicly traded HBs.
Wasn't the new CEO instrumental in granting the CFO his $1.6 million dollar bonus in February when he was on the board???
How desperate is SPF to meet quarterly numbers if it is being forced to liquidate entire communities at HUGE discounts?