CNBC’s audio did Ara Hovnanian a huge favour yesterday by cutting out just as the questions from Jim Cramer got uncomfortable.
The Hovnanian Enterprises founder and CEO went on CNBC yesterday morning to discuss the problems facing the company.
Among them, as cited by CNBC hosts Melissa Lee and Jim Cramer:
- Housing starts for August falling 5%; the biggest decline since the month of April
- JPMorgan says by the end of 2012, the company will have to raise more capital.
- Credit Suisse says Hovnanian should lose $1.58
- “The company may be comfortable with liquidity levels, but obviously investors are not.”
- In June 2010, Hovnanian was “very enthusiastic” on CNBC
Cramer asks [at 02:10]: “Why should we own the stock if we see red ink after red ink after red ink after red ink? I struggle to find a reason when we see headlines like this: Credit Suisse: limited cash, mountain of debt, Wells Fargo raises the issue of growing concern…”
Hovnanian clearly has no idea how to answer the question.
Hovnanian: “Uhh, look Jim, I understand, uh, concerns, uhhh, it’s a difficult market and uhh, we’re feeling the pain of it.” [Body language: looking down, shoulder shrug, head shake.]
Then Cramer asks why Hovnanian was feeling more pain than Toll Brothers, which is in the same competitive market as HOV.
Hovnanian just continues talking over him, saying mumbo jumbo. Listen closely like we did and it’s obvious that he’s not saying ANYTHING – he’s just stringing together a bunch of cliché positive buzzwords. Then Cramer asks him again about Toll Brothers and he loses audio. Convenient!
Hovnanian: “But uhhh we’re confident will come through and we remain long-term, uhhh, show great returns for investors. It’s just a difficult period right now.”
Cramer: “But I’m not seeing those same issues with Toll?”
Hovnanian: “I’ve lost the audio… Can’t quite hear you.”
Lee: “Are you there?”
Hovnanian: “Cannot, uhh, hear you right now.”
Watch it below:
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