Much has been said today about the failed merger of LandAmerica Title and Fidelity National. LandAmerica stock fell from 3.81 to 53 cents a share after the merger deal busted.
I hate to see any company in trouble, yet this is simply another example of gluttony gone bad. LandAmerica choose a business model that emphasized massive leveraged growth. LandAmerica's management team chose a plan of massive growth and did not prepare for the eventual market decline. Click here for a partial list of LandAmerica's holdings.
Part of me hopes they do not find a bailout option and suffer the consequences of poor business management. What ever happened to sustainable growth policy combined with careful cash management? Can you imagine how viable they would be today if they had been prudent verses reckless during the crazies of 2003-2006? They'd be cash rich and able to weather the current storm.
The kinder part of me worries about friends who work for LandAmerica and face losing their jobs because management was dazzled by the gleam of gold. Do you think corporate America is learning anything during these times or are they just looking for a quick fix bailout so they can move on to their next mistake?
The Urban Team at Realty Executives