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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (59744)	8/11/2006 1:50:16 PM
From: Think4Yourself	Respond to of 306849

That explains WCI's plunge towards 0 today. What happens to puts if a company issues new stock, making the old stock that the put is based on worthless? Is it automatically redeemed for the put price?

To: Ramsey Su who wrote (59744)	8/11/2006 2:47:30 PM
From: Travis_Bickle	Respond to of 306849

"If the Florida condo market does not reignite in the immediate future, WCI is dead." It looks like a potential go-to-zero case but I don't play those much, as a retail investor I have no means of getting the color on their debt. I imagine WCI's debt is getting shopped around but there is no transparency, only the banks know. As things stand "cash burn rate" may be the topic of conversation for the first time since the dot coms collapsed.

To: Ramsey Su who wrote (59744)	8/11/2006 3:49:33 PM
From: Lizzie Tudor	Respond to of 306849

If the Florida condo market does not reignite in the immediate future, WCI is dead. Wow. And what could POSSIBLY cause the Florida condo market to reignite. I seriously can't think of ANYTHING. Maybe the announcement of a new army base in the center of a WCI community? But thats about it.

To: Ramsey Su who wrote (59744)	8/11/2006 6:27:12 PM
From: XoFruitCake	Read Replies (1) \| Respond to of 306849

I think the conference call is going to be available for at least a few more days. I listened to the call twice and laughed both time. The analysts were very concerned about their tower division and specifically their default rate. They have a total of 6 defaults last Q. Multiple analysts were trying so hard to ask the same question in different way to see if the default rate is going to be higher in the coming quarter. Any other HB would would kill for 6 default in 300+ unit closed in a Q. Default rate clearly is the thing to watch for WCI tower division. But we won't have significant default until at least 4Q06 or 1Q07. All the condo were sold about 2 years in advance. So condo closing now were sold in 04. And buyer paid 20% deposit. With this kind of number, we need today's price 20% lower than 04 price in order to have massive default. I don't believe we are there yet. But once we move to 07, then we just need the resell price to be 20% less than 05 price (which I think we are there already). If we believe June/July 05 was the peak then 07 and 08 is the years with massive default and all the bad thing that can happen to cash flow and loan covenants..