Bluegreen stock and health of company

[jabjaw7 Member Find all posts View Profile Close jabjaw7]

What insight do you have of the volatility of Bluegreen stock was up to $12.50 with the Diamond Resorts release but today is at $4.50 lowest in many years.

Do you feel this is due to the market in general or something specific to Bluegreen we should be worried about?

Also on Oct 1st Motley Fool included Bluegreen in an article "5 Deathbed Stocks" as potentially going bankrupt within 2 years. If Bluegreen were to go bankrupt, how would that affect timeshare owners, especially those with Bluegreen holding the mortgage? Would the affect be greater or the same to us?

Thanks
Justine

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

My guess is that Bluegreen's stock is suffering with every other stock in this market. To the extent it is hurting more than others, it's probably due to the fact that it has significant exposure in the residential real estate market.

In addition, Bluegreen relies on its customers financing their timeshare purchases. If their credit facilities disappear, it will be impossible for them to keep up their sales volume. That would hurt the value of the stock.

Lastly, the Bluegreen Vacation Club is a separate corporate entity from Bluegreen Corp. If BXG went bankrupt, the Club would still remain. It's just that some other resort developer would run the Club. To the extent owners who financed their purchases default on their loans, the points packages would be foreclosed and then resold by the new developer or by the Club. The only issue for owners would be if enough of them defaulted so that the maintenance fees would rise dramatically.

[crwisconsin Senior Member Find all posts View Profile Close crwisconsin]

You still owe

If Bluegreen were to go bankrupt, how would that affect timeshare owners, especially those with Bluegreen holding the mortgage?

If Bluegreen went bankrupt, those owners owing money to Bluegreen on their mortgages would still owe the money. The only difference is that the bankruptcy judge will tell them where to make the monthly payments. The question to ask if the owner then defaults, will the new holder of the mortgage be kinder or meaner than Bluegreen would be (ie., renegotiate, buy back, or break your knees with a baseball bat). If the owner goes bankrupt, the last possibility is still valid.

Charles

[Ryne08 Senior Member Find all posts View Profile Close Ryne08]

At $4.50 per share sounds like a very good time for Diamond International to buy.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

At $4.50 per share sounds like a very good time for Diamond International to buy.

At $4.50 per share, they could just start buying shares. Even if Bluegreen swallowed the poison pill, the new buyer would get it for $9/share which is singificantly below the $15 offered by DRI.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Diamond's massive credit lines have also been reported to have been canceled due to the credit crunch on wall street- so until the finance situation starts to clear up in general- they won't be as active. Diamond also just suspended their reacquisition programs across the board until their credit lines are reinstated. Diamond's backers have access to a large cash pool- so the purchase of BlueGreen is still a possiblity due to the drop in stock price- but I personally just don't see Cloobeck taking that risk at this point.. Who knows, perhaps Cloobeck and Jim Murren will go to dinner again and change their focus back on casinos!

BlueGreen owners that were worried about Diamond can now relax a bit.......

[vintner Super Moderator Find all posts View Profile Close vintner]

As far as the price of the stock, I wouldn't worry. Real fair trade value of this stock (in a time when the world isn't falling apart) is in the $5-6 range, so before the announcement, it had been trading at or maybe slightly above value. Yes, it is off it's high from a couple months ago, but so are most stocks. Percentage wise, many stocks have lost far more.

[swirg53 Senior Member Find all posts View Profile Close swirg53]

At $4.50 per share, they could just start buying shares. Even if Bluegreen swallowed the poison pill, the new buyer would get it for $9/share which is singificantly below the $15 offered by DRI.

I am not at all astute in the stock market and in fact, often quite confused by it, but if Bluegreen is "at" $4.50 per share, why would the (potential) new buyer pay $9 per share?

Thank you in advance to whomever attempts to educate the ignorant (me).

[swirg53 Senior Member Find all posts View Profile Close swirg53]

As far as the price of the stock, I wouldn't worry. Real fair trade value of this stock (in a time when the world isn't falling apart) is in the $5-6 range, so before the announcement, it had been trading at or maybe slightly above value. Yes, it is off it's high from a couple months ago, but so are most stocks. Percentage wise, many stocks have lost far more.

Similar question to my previous posting: What do you mean by "real fair trade value"???????????? That obviously isn't the price the stock is currently at (whether above or below this number)??????

Maybe this has something to do with that: I have noted when my dividends are re-invested, the price paid per share was higher than the actual price (value?) per share at the time of the trade. That is something I have never been able to understand either.............and maybe when I get the above answer, I will understand this part too.

Thanks again for helping me understand all this.

[vintner Super Moderator Find all posts View Profile Close vintner]

Ya know what is weird? The price of stocks are often adjusted for the price of the dividend. I found some stocks offering high dividends, bought the stock and before the lock date, the price of the stock is adjusted down. I still make nice money on the dividend, but not the stock after the adjustment.

But that is not what you asked.

Stocks or their companies have a value. The stock typically bounces around that value, sometimes higher, sometimes lower. In this market, there are a lot of stocks that have a value much higher than where the stock is currently priced. A lot of stocks have dropped 2, 3 or 4 times. How would you like to own a stock in June/July at $160 and it is worth $40 today? That is pain for the holder.

I don’t know what the bottom line will be for Bluegreen or their stock in the next year, but I don’t think the stock at this time is affected directly by Bluegreen. I think it is partially the poor market, partially Bluegreen and their business, and partially the DIA issue. If DIA was not involved, the stock price may be different. It may be higher if Bluegreen can hold it on its own, it may be lower if DIA was holding it higher waiting for the big payout. Tough to say.

[Spence Super Moderator Find all posts View Profile Close Spence]

I'm not a stock guru and I don't know what the heck DIA is (unless you're referring to Defense Intelligence Agency) but swirg, stocks have a 'book value' based on the company's physical assets and cash. If they are in vogue they may be trading way above their book value and vice versa.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I am not at all astute in the stock market and in fact, often quite confused by it, but if Bluegreen is "at" $4.50 per share, why would the (potential) new buyer pay $9 per share?

Thank you in advance to whomever attempts to educate the ignorant (me).

Bluegreen has a poison pill provision that allows the management to double the number of shares and distibute them to current shareholders. They implemented this to thrwart the David Siegel hostile takeover attempt.

If Bluegreen says for DRI to take a hike at $4.50/share, they can still buy it for $9/share without Bluegreen's support. It's highly doubtful that Bluegreen would agree to a $4.50/share price.

[vintner Super Moderator Find all posts View Profile Close vintner]

I'm not a stock guru and I don't know what the heck DIA is (unless you're referring to Defense Intelligence Agency) but swirg, stocks have a 'book value' based on the company's physical assets and cash. If they are in vogue they may be trading way above their book value and vice versa.

I guess work is getting to me and I can't think straight at the end of the day. Now the powers that don't know how things work want the CAD drawings to look like a web page. Uh...NO. Ons and Ons and Mor-ons.

DIA was supposed to be DRI. I guess I was thinking Diamond, so got the DIA part of it.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I'm not a stock guru and I don't know what the heck DIA is (unless you're referring to Defense Intelligence Agency) but swirg, stocks have a 'book value' based on the company's physical assets and cash. If they are in vogue they may be trading way above their book value and vice versa.

When I looked at the BXG balance sheet a while ago, I think I recall their book value being around $12/share. The problem with that book value is that it probably assumes unrealistically high basis for residential real estate owned.

Typically, book value is based on acquisition cost of assets. If those assets are still on the books at artificially high levels, then the book value is much lower for the company. I don't believe that Bluegreen has marked-to-market their current inventory. If they did, I think you would see a lower book value.

Otherwise, the break up value of the company is worth more than the stock. This is probably true. Bluegreen is probably worth more as two companies rather than one... a residential real estate builder and a timeshare company.

I don't think there is much synergy betweent those two business lines.

[willettj Junior Member Find all posts View Profile Close willettj]

Boca,

BXG is under a $1 per share now and the company I work for has dealings with Bluegreen and I heard a rumor today that they were in bad shape and very near bankruptcy. I know the club is a separate entity and our ownership is safe. Just curious what new insights you had?

Joe