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alstry (35.70)

More HB Misleading Statements???

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May 16, 2008 – Comments (4)

From  HOV's May 5th Press Release just before they sold millions of shares to the public:

"As a result of management's continued focus and progress in reducing inventory investment levels and generating cash flow, the Company is increasing its projection for positive cash flow in fiscal 2008 to greater than $300 million. The Company's prior guidance was for cash flow in excess of $100 million for the full fiscal year. The Company achieved positive cash flow in the second quarter -- one quarter earlier than previously anticipated. Net debt was reduced by approximately $30 million in the second quarter."

Now the release today AFTER they fleeced the public for money selling shares:

RED BANK, N.J., May 16 /PRNewswire-FirstCall/ -- Hovnanian Enterprises, Inc. (NYSE: HOV - News) announced today that it plans to issue an aggregate principal amount of up to $600.0 million of 5-year senior secured notes (the "Notes") in a private placement....

The Notes would be secured on a second-priority lien basis on substantially all the assets owned by the Company .....

http://biz.yahoo.com/prnews/080516/nef019.html?.v=51

Now the shareholders have really be pushed down the priority line.  Doesn't Ara still fly around in a private jet?????

"The Company intends to use the net proceeds from the offering of the Notes to repay amounts outstanding under its existing revolving credit agreement and for general corporate purposes."

Wasn't that what the $$$ from the new stock offering supposed to achieve?  Thanks for bending over new shareholders, I hope that was as good for you as it was for Ara.  Now he can afford the higher fuel costs on his plane.....at least for a while.

4 Comments – Post Your Own

#1) On May 16, 2008 at 8:48 AM, alstry (35.70) wrote:

This one is truly amazing.

In the first week in May, HOV tells the world that it was cash flow positive and paid down $30 million in debt.

In the second week in May, on the back of that announcement, it raises about $150 million dollars in equity to bring new "owners" into the company.

Now in the third week in May, the company announces it is going to borrow hundreds of milllions of dollars and mortgage all of the owners assets.

The funny part is portion of the proceeds of the debt offering is going to pay  down the banks.  You have to believe that HOV and the banks knew they were about to do an offering of this size and mortgage the company when the equity offering was announced.

How can someone bring in an equity partner one week and mortgage out his interest the next week?

Is this where our retirement dollars are going, into the banks pockets and Ara's private plane?

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#2) On May 16, 2008 at 9:18 AM, TDRH (99.84) wrote:

Yet the stock keeps running.  Think I am down 100.

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#3) On May 16, 2008 at 4:34 PM, bobbyj0708 (< 20) wrote:

Stock is up? Apparently Bill Miller isn't out of money or margin yet.

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#4) On May 16, 2008 at 7:41 PM, thisthatother47 (88.49) wrote:

I hope the karma beat-down he suffers some day is deep and painful in every sense of the word.

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