He says he will leave by 2017. Why should he go now. First of all were very happy well talk about the facts in a second and i want to reassure investors that the family is a big fan of conservative land investment. We want to be disciplined and we dont want to go back to the big land buying days. Theres been sames made about how we want to change a big directionment we just juan a new leader so let me just say that about the conservative smart growth that our family wants and reensure investors that we want that. But let me tell you scott. Richard has been a family friend of the family. We didnt bother him for the last several years but from 2004 to 2015 on acumulative basis the pretax earnings of the business have been a loss of over 400 million and thats very concerning for us. Additionally over the last two years the stock prices stayed stagnant and its time to go and were very hopeful that he goes before next year. The board says your campaign is, quote, misguided and not in the interest of shareholders. The board would also point out since he initiated that Value Creation strategy of his back in 2011 that shareholder gains have been out pacing competitors. Since 2011 until now, the stock up 142 . 140 for lenar. Kb is 7 . Some other Home Builders have done quite well. But whats done with those numbers. The gentlemen that made those statements happen to come from syntex was which a failed acquisition. And hes still a director and much less the lead director of the organization. He road off within two years a billion and a half dollars as a result of that deal. So theres a whole lot of missed opportunities. Many say syntex was going to go bank rupt but the other builders lost a lot more money in the next several years. What are you talking about and referring to in this letter that your grandfather sent to the board of directors . We have seen an enormous amount offal lenned concern. And he knows how to build this business and the amazing thing is he decided to make this subject. We were working with them privately. Monday morning we were blind sided by this announcement. We replaced over years over ten ceos. This is nothing new for us. We would prefer not to have this public battle but in the interest of the employees that we care a lot about. We do not want to replace the Senior Management team. We just want to make a change in ceo and have the family values that made this a Great Company be a Great Company again. Mr. Postal that you referred to already, he is the lead director at pulte and gave me an on the record comment id like to read now and ill quote and get your reaction from it. Personal venn deat as are a smoke screen for whats really at stake here. The successful Value Creation strategy that has driven pulte Group Forward over the last five years. It appears that the pulte family wants to drag if business back to the old path which can expose the company to excessive risks when the housing cycles turn down. The board will not allow this. He lead the execution of a well defined strategy that can enhance performance through housing cycles and the board is committed to seeing it through. Were thrilled that richard will be our ceo for another year to help make that happen. Whats your reaction to all of that . Number one, jim has been with richard since the failed deal and thats important to remember but the family does not want to go back to the old model. We used to have a Value Creation model but a return on invested capital model. Were all about making smart land decisions. In fact, in 2003 the company went on a land buying spree and we learned the hard lessons that we learned over the last several decade which is is you don want to overinvest in land. You want to be smart so this whole play that we juan to stop being smart and many of the things that the company is doing are great. Whether they want to call it Value Creation thats fine but theres a lot of missed opportunities that are happening and his background is not from the ground up in the field and we firmly believe that a seasoned operator, somebody that really understands the Home Building industry and with all due respect, didnt come from pepsi but somebody that understands Home Building would be a great ceo for the business and given the execution risks apparent this year were hoping that a new ceo comes in in the next few months for the benefit of shareholders. I dont see any reason why he would want to stay until 2017 unless for his own personal wishes but thats just my belief. They would probably make the argument that whatever he has instituted since 2011 seems to, in fact, be working. Significant gains in pretax income. A significant decrease in the debt to capital ratio. Instituting a buy back. Things that most people view as being shareholder friendly. Scott, where is the stock price gone in the last two or three years . You know . The record speaks for itself. The stock hasnt gone, in fact, a few years ago it was trading at 21 a share. So the stock prices stayed relatively flat and under richards leadership we don see it getting to where we need it to be. We think the company is doing great things. We love the employees. Some of the Senior Management team we think very highly of. Ryan marshall could be potential ceo one day. Fantastic guy. Harmon smith hes been in the business for a long time. These guys are running the business every day. This is a good fundamental business. Strong assets, strong name. We just need a new ceo for a brighter day. What do you do if he just refuses to leave . Sources that i have been speaking to and those that diana spoke with and already reported on the air less than an hour ago said that he has no plans to leave earlier. My reporting would say he has 100 backing of the board. So what do you do . Well, you know, i really hope for the shareholders and for the employees does he really want to be the center of attention in this Company Going forward. We met with him privately. I told richard the last thing we want to do is bring this public . What did the board do ohri chard do . They went public on this. Nothing can come constructive from this. Richard has made over 100 Million Dollar while the stock price has not dramatically increased. Hes made a lot of money. Its time for him to go. Some may suggest that maybe they had no choice in james grossfeld who we are looking at on the screen is one of the board members. He is now an outgoing board member because he will not stand for reelection on the boards juaning. If he was internally helping to lead an upheaval why should he remain on the board . He told him he did not want him to resign. That was the intention of my grandfather and as far as the board is concerned jim was very independent. Let me tell you a little bit about jim. Hes the Third Largest shareholder in black rock. He ran pulte from 1974 to 1990. Hes a super star by every stretch of the imagination. He has more talent in the Home Building industry and i mean that respectfully to the rest of the board than anybody on the board. Why logically why would the board get rid of somebody with theal len and expertise of mr. Grosfeld . Its inconceivable. He was acting great and working very constructively with us. We would love to meet with the company private. I meet with them today but they have to be willing to hear our concerns. Were the largest shareholder and were not going away. We think its a great buying opportunity. Do you want to be the ceo . Absolutely not. From a little kid i said i have no interest in Home Building. I have a hard enough time escaping the name bill pulte. I have a great business. I care a lot about my grandfather and family name and when i see these people leaving the company and when i see this great Home Building town my grandfather worked for so many years to create go away we have to say we have to do something and this idea that one gentleman would have to stay around to sacrifice that is not in the best interest of the shareholders. You have taken issue with the fact that he moved the company from detroit to atlanta. Why is that such a big point of contention . Well, the company lost a lot of money in the years up to that. Its not apparent to us why that move occurred. He was laid off as part of the move. There are countless stories of that and in addition to the tens of millions of dollars on the move theres a significant loss of talent and were very concerned that we believe him to be reckless management style by doing that cost the company and is still costing the company. The gentlemen i mentioned also had to do with quality and helped with litigation around quality and he was a very valuable person. Those are the decisions that after a certain period of time weve had enough. Was the family supportive of the move at least initially . It was announced or maybe approved by the board . 13 . Was the pulte family initially in support of that move . I would tell you that the board actually did not vote according to some releases the board did not actually vote on that. Mr. Dugas said he spear headed the move. In a statement yesterday they said it was spear headed by the board. So were not exactly sure what had gone on there but the family was obviously disappointed because it became the largest home builder in the state of michigan so one would argue okay we have gone from being the number one home builder to in this case number three or number four so why would somebody lay off people and tens of millions of dollars. But my grandfathers opinion was take a motion out of this. And ended up moving the company and the reality is we dont think that we have seen the proof in the pudding. Tens of millions of dollars has been spent and a lot of great peel were laid off. But again the atlanta move is one indication of the many points that i made. Sure. If not you, if not dugas then who . Who should be running pulte homes and the pulte group from here forward . Two gentlemen. Ryan marshall should be one. Hes an executive fantastic guy in charge of many divisions at pulte. Also harmon smith would be a great candidate. And when mr. Grosfeld went off the board it because he had been in the industry for a long period of time. This board has not had a lot of experience in Home Building and thats why its a big shame to see him go and i would strongly encourage them to add him back. Thats just a shame. What have other large shareholders told you about your attempts if you even had those conversations to this point. I cant talk about that but some of the biggest names in the housing industry smart, smart people called us and said con fwraj lagss. One of them even said now youre going to be a real competitor and i can tell you that i cant talk about the specifics but were confident that if and when we need to tell the whole story well do it but we would like to work constructively with you. We would like to find a solution. We dont want to engage in the public nonsense. Thank you for your time today. Appreciate it very much. Thank you, scott. Have a great day. Bill pulte the grand son of the founder of the pulte group attempting a board room upheaval at that company. Third largest home builder. But he tried to do it, based on what we heard from him, that it was the company and or mr. Dugas that decided to splash this all over the news. The news wires and so forth thats not positive for the company. And especially if its basically a reach out by both pultes and the grandfathers and bill to say lets negotiate here and talk about this and instead he takes it public and thats the long way to go. Were going to take a quick break and react to this story on the other side and heres what else is coming up on the Halftime Report. Still ahead, the apple of her eye. I feel like apple stock has been dramatically undervalued. Why one analyst says that stock is heading to 150. Plus the Biggest Health care deal of all time is officially dead. So what should you do now . And Energy Stocks are topping the tape today. How you should be playing crudes rally. Its all coming up on the Halftime Report. Eese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive im a Customer Relationship im roy gmanager. Ith pg e. Anderson Valley Brewing company is definitely a leader in the adoption of energy efficiency. Pg e is a strong supporter of solar energy. We focus on helping our customers understand it and be able to apply it in the best way possible. Not only is it good for the environment, its good for the businesses bottom line. These are our neighbors. These are the people that we work with. That matters to me. I have three children that are going to grow up here and i want them to be able to enjoy all the things that i was able to enjoy. Together, were building a better california. I think one of the things that people arent realizing in the story is that obviously pulte is more land and Single Family housing, right . Thats not the sweet spot right now. For him to do what he did with the stock the last year or so he did a lot of Financial Engineering to get this company situated for the demographic on slot thats going to happen very quickly as people get fed up paying 4,500 in rent for a one and two bedroom apartment and say im going to get married and have a family and have kids. Im going to disagree because still houses are not that affordable. Very affordable compared to rent. We can debate that all day. You show me charts on affordability but its can you get the financing. Banks. Its the question they may be cheaper but its like a rolls royce. Its a demographic thing. Im telling you. Get married. Have children. Buy homes and theyre not going to want to be in an apartment. And hes lending you money. Banks are lending money if you have obviously down payment. Hes in the sweet spot. We were talking about it pivoted toward apartments. See him on jersey city. And you dont have to worry about the finances. Rental properties. You can actually afford a Million Dollar home. First of all. Second of all, the banks. Thats a dodd frank issue and eventually the credit is going to ease up Mortgage Rates 3. 4 . And lets move apple. Lets talk about that stock. Initiated with a strong buy today. A 150 price target as well. A tech giant is a safe haven. Its the analyst behind the call. Its our call of the day. Welcome. Nice to see you. Why is it time for a strong buy. If you think you took it off of it and laid it against the Walt Disney Company apple had higher margins for the last five years and if you took that hardware label off it would be valued at 200. We think thats the longterm value of apple. There was a note that came out yesterday or the day before from another analyst that cited the Services Business is going to be the big driver. What gets apple to where you think it can go. I think the big call here is that the consumer is replacing his wires in the ground with a Global Mobile footprint and apple has a dominant position in the wealthiest aspect of that. Has 16 of the Global Smartphone market and the android price of hardware is about 300. Apples average price is about 700 of which we think 300 is the hardware and 400 is the subscription revenue stream you buy your way into the ecosystem with. Better apps, Better Service in the stores. Seemless integration and ease of use. Its an 8 year average hold of a smartphone ecosystem meaning if youre in apple you stay there 8 years. That feels like a subscription business to me just like the cable companies. I dont disagree but i have a quick question as well. What do you see Going Forward that gets you the most excited about apple. Not just the eco system itself but is there something that youre seeing that you think could be the next big driver for apple . I really like the apple pay business and this focus on cars and other services that increase the annuity stream business with apple and increase the revenue per their billion active devices today. You havent covered apple since 2014. Is that right . That was the predecessor analyst. Needham hasnt. Thats correct. You have a hold on disney is that right . I do. Weigh in on this new drama now that were faced to deal with with him no longer the heir apparent . I think board put shareholders in a position of having to pray every night that nothing bad happens to bob iger. That 160 billion company doesnt have a succession plan. Even Sumner Redstone has succession plans. Its depending on one guy for all the Senior Management here. Well those are strong words. Are you suggesting that the stock is uninvestable in this current environment . The risk on the stock just went up because you better pray nothing happens to bob iger. All right. Guys. Well id say one of the succession plans potentially here, not at disney but at viacom and mr. Red stone is probably this mr. Staggs. Somebody in this industry is going to pick this guy up, judge. So hes taking a one month, basically a month from now less than that hes gone from disney so unless something happens between now and then hes going to be gone on the market and he wont be on the market for long is my prediction. I think we could say that story about any ceo thats larger than life like iger. He has done a phenomenal job. The risk is racheted up if the ceo leaves. But you have to have somebody. Absolutely. In terms of apple all she did was look back. Lets talk about the next five years. You disagree with laura . I think its an s p stock. I dont think its a super grower. I think its a market stock. Best days are behind it. In terms of out performance you cant say its not a hardware company. It is period. I think the same. Below 100 its attractive. Below 130 its a sell. Youre talking about getting into again a trillion dollar company. Im long calls out in june. You disagree with the guys to the right. I