Turning out the lights at Novastar
The week ends on yet another a low note for Novastar (NFI). The subprime mortgage company fired 85 percent of its remaining staff and had its securities delisted from the New York Stock Exchange. The setbacks are hardly a shock, given that Novastar spent 2007 slashing jobs as its business - making high-cost loans to people with poor credit histories - collapsed under the weight of rising defaults. At Friday’s closing price of $2.92 a share, Novastar has lost 95 percent of its value since a year ago. The stock has also lost almost two-thirds of its value since the day in mid-October when the NYSE began delisting procedures. Novastar has turned into such a debacle that even the CEO got thrown out last month, though the company’s press release politely said he was leaving. Now almost everyone else who was at Novastar is out on the streets, too - though chances are good that most people didn’t get a nice severance payment the way ex-chief Scott Hartman did.
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It’s too bad this had to happen. A lot of good employees have lost their jobs. NovaStar was for the most part a a good company, but unfortunately when you have the inmates running the asylum, this is what happens.