Tuesday, November 6, 2007 0 comments ++[ CLICK TO COMMENT ]++

Beazer Cuts Dividend and Workers

Quick housing update...

Not a surprise to anyone but Beazer (BZH) eliminated its dividend and cut 25% of its workforce.

Beazer Homes USA Inc., the home builder that has been rocked an investigation into its mortgage-origination business in addition to the housing pullback, has suspended its quarterly dividend in an effort to firm up its capital position...

Last month, the builder said it found evidence that workers in its mortgage business violated Housing and Urban Development regulations. Its probe also uncovered evidence of other accounting irregularities that will lead to expected restatements, Beazer said.

On Tuesday, Beazer said it was unable to report its fourth-quarter and fiscal 2007 results but was providing preliminary, unaudited data. It has negotiated waivers of default from its lenders due to its failure to report financial results on time...

Beazer said it let go about 650 workers, or 25% of its staff, during October.


As you can see, Beazer has a whole hoard of problems on top of the housing collapse.
I don't like Beazer very much. It's very risky and might not survive. However I am following it because it has 90%+ of its shares shorted. I have never seen that for a company that actually has a chance--albeit small chance--of surviving.

If someone is interested in Beazer, perhaps the best bet is if you can find a convertible bond. I'm not sure if Beazer ever issued any convertible bonds but those are worth looking into assuming you are confident that their balance can withstand the shock of the housing collapse.

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