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Beazer Homes Put Adjustment

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Beazer Homes Put Adjustment

This morning a rumor made the rounds saying Beazer (BZH) was about to file bankruptcy. The stock plunged to $8.10 at the open from yesterday's close of $14. Beazer quickly issued a press release saying they had no idea where these unfounded rumors originated. JP Morgan came out and supported the stock saying they had a large cash position and were not in any immediate danger of going under.

The stock rebounded off its $8.10 low on the JP Morgan support to $12.60 but immediately sank again to trade in the low $11 range as the spotlight on Beazer did highlight its SEC, Federal, State and local legal problems. Beazer is clearly not out of the woods yet.

However, with the major brokers saying positive things about Beazer I don't want to get caught in a sudden uprising of good will and lose all our gains.

I am lowering the stop loss on our Beazer put to $12.75. We have had a good run and while Beazer may still hit single digits as I expected when we instituted the play I am not willing to give back our $11 profit (+375%). Lower the stop and let's continue waiting for single digits.

Jim Brown

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