Hi HWGA. I share your sentiments, however now I must temper that with the current situation.
I think there is a very simple explanation of why CRH did not go ahead, that does not involve manipulative behaviour.
I don't know the numbers CRH wanted, but let's say they were aiming to get orders from builders for 2000+ houses over the next couple of years.
If they did get that much commitment from builders then the JV surely would have gone ahead as it would be earning $40+ mill.
So I think they did not get enough commitment for the JV to be worthwhile. I don't know what their cutoff number is, but I would expect it to be at least 1000 houses.
The next question then is why builders did not commit?
I think that is because we are trying to get the builders to make a giant leap of faith - ie risk projects worth maybe half billion $ on the basis of having seen a few houses. Maybe the builders want to take smaller steps, but in total not enough to satisfy the JV.
The hx is great. Maybe now Pulte may agree to commit to a decent size project. If not, what is the plan?
FBR Price at posting:
2.1¢ Sentiment: Buy Disclosure: Held
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