Home builder TOUSA Inc.'s third-quarter results "strongly indicate existing shareholders will be completely wiped out, or at the very least diluted to almost nothing," wrote Morningstar Inc. analyst Eric Landry in a research note Thursday. The troubled company, which operates mostly in Florida, late Wednesday said its quarterly loss widened and that it may be forced to file for Chapter 11 due to the housing slump. Landry estimated the company's book value is now less than zero.
I don't think this part of the housing slide has even begun. You've got the builders going under, their employees being laid off, and of course all of their subcontractors and suppliers not being paid.