Wednesday, April 8, 2009

Pulte/Centex Merger: Dinosaurs Mating

The stock for stock merger between Pulte Homes and Centex to giant home builders, announced today represents a continuation of the death spiral the home building industry is in. Simply put the merger these two behemoths is very much akin to dinosaurs mating. Nothing much will come of it as they are on the downside of the evolutionary curve.

A far better strategy would be chop each company up into smaller more focused units. In that way each unit would be less of a slave to Wall Street earnings projections and instead focus on profitability rather than growth. Afterall it was the search for growth at any price that led to the buying huge tracts of land at the top of the market.

1 comment:

  1. Pulte Homes.
    Wall Street analysts are concerned about the risk .
    Pulte Homes