WCI shareholders are probably more than a little miffed. First, WCI turned down $22 from Carl Ichan. Then the stock promptly crashed to less than six. To add insult to injury, today's online WSJ had this to say:
"Analysts say luxury-condo developer WCI Communities Inc. could also face cash-flow problems, because they expect a growing number of buyers to cancel contracts to buy condos.
As of March 31, WCI had the smallest net-worth "cushion" before it tripped its debt limit, according to Moody's, which recently downgraded its credit rating of the builder."
Let's look at these conclusions. WCI had $305 million of customer deposits as of their last filings and inventory of $1.9 billion. And two of their condo developments in South FL are sold out.
Some of WCI's properties are spectacular. That's what attracted Ichan to it in the first place. But with that developmental flair, comes a more aggressive business plan. Meanwhile, it's FL counterpart, Lennar has cash, a better balance sheet, and does about 10X WCI's billion in revenue.
Jerry Starkey of WCI, didn't like taking Carl's calls. Maybe he should call Stuart Miller of Lennar. They might make a good mix. And Stuart? He'd probably be able to offer less than half of what Carl did, and use some stock. You make the call.
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