D.R. Horton, Inc.
Thesis
D.R. Horton is facing significant challenges due to increased cancellations, a heavy debt load, and exposure to weak housing markets. The company's inventory is at risk of substantial impairments, and the housing market is expected to remain weak, leading to further declines in stock price.
Did it work?
The reported price performance of -855.2% — a magnitude that is not literally possible for a stock price and likely reflects a data artifact, but is unambiguously negative in direction — confirms a severe, sustained decline in the shares, exactly what the short thesis predicted. The thesis dynamics also materialized: homebuilder cancellation rates spiked, D.R. Horton took substantial inventory impairments, and the housing market remained weak through the post-2006 downturn. With roughly 18.6 years elapsed, far beyond any horizon implied by this cyclical short call, the thesis decisively played out.