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Housing

A Novastar Takeunder?

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By Douglas A. McIntyre Published
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After the close Novastar Financial (NFI-NYSE) pulled the wool over the naysayers, or so it is trying to say.  The company has received an additional $100 million in liquidity commitments arranged by Wachovia Capital Markets.  This would replace and expand an existing agreement between the two.  The agreement comes at One-Month LIBOR + 350 basis points.

But here is the kicker: The company has hired Bear Stearns to explore strategic alternatives.  The alternatives are including but not limited to a potential sale or other change in control.  The stock closed down at $5.03, and its 52-week trading range is $3.25 to $38.49.  If this can occur, it may offer a floor to the rest of the sub-prime slime operators.  Shares are up 14% at $5.76 in after-hours activity. 

With the stock off more than 80% one has to wonder how realistic it would be that the company could actually secure a successful shareholder vote that would approve the sale.  If nothing else, the company has at least figured out how to issue a press release that may stabilize the stock.

Jon C. Ogg
April 11, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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