alstry (36.10)

Why did the Toll Brothers just SOLD millions of shares????

September 15, 2008 – Comments (2)

Here is some analysis that other CAPs players don't tell you.

Toll had a really low cancellation rate last quarter.....and Bob Toll made sure he bragged about that fact........do you think it was because he had a whole bunch of spec homes that he dumped at really cheap prices and when you are giving away standing inventory buyers generally don't cancel.  Now watch how surprised Bob Toll is when cancellation rates skyrocket this quarter as standing spec inventory is at skelton levels.

Bob is no fool...he has a bunch of raw land that he can't afford to build out because the cost of building out the land is more expensive than the value of the resulting lot.  Bob is going to slow building if he can't make any money at it.  Things may really get slow for a while and he knows it.  Thus, he has a whole bunch of land on the books that he is telling shareholders is worth hundreds of millions where in reality has very little present value.

Bob sells really expensive McMansions....guess what kinds of homes people are not buying now?  guess what kind of homes that people are selling now because they can't afford their current lifestyle due to the economic slowdown?

So what does Bob tell you?  That he sees light at the end of the tunnel?.........he just forgot to tell you that is the front of the engine brother Bruce is driving right at you.

Sure Bob has some cash, but he has a whole bunch of debt too....guess what....LEH had a whole bunch of cash.....but they had a whole bunch of debt too.  I am not saying that Toll is going bankrupt.....but of Bob and brother Bruce are dumping millions of shares......what should we be doing??????