NovaStar Completes Reverse Stock Split

Subprime residential lender and mortgage portfolio manager NovaStar Financial, Inc. (NYSE: NFI) completed a reverse stock split on Friday and trading began Monday under the new arrangement.

NovaStar under the previously announced one-for-four reverse split, every four shares of common stock were changed into one share of common stock. For fractional shares of stock, each holder is entitled to receive cash equal to the fraction multiplied by the closing price on Friday.

Immediately after the reverse split, NovaStar had 50 million shares of common stock authorized: 9,469,910 shares of common stock outstanding and 40,530,090 shares authorized but unissued.

NovaStar is a specialty finance company that originates, purchases, securitizes, sells and invests in nonconforming loans and mortgage-backed securities.

The company’s stock price was down more than 16 percent in midday trading Monday, hovering around $13.50.