AT&T marketing plan to project innovative, hip image
By Jon Van Tribune staff reporter
September 11, 2007
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AT&T Inc., striving to remake its image from one of stodgy dependability to a more daring, innovative and hip concern, is launching a marketing initiative Tuesday that borrows aspects of virtual reality and social networking.While the phone giant's marketing push will include traditional television commercials, billboards and print ads, it will also include an online AT&T Souvenir Store that will launch next month, inviting customers to make up their own worlds.Riding a crest of popularity of the iPhone, which operates exclusively on AT&T's wireless network, Apple announced Monday that it has now sold 1 million iPhones.
"One million iPhones in 74 days," said Steve Jobs, Apple chief. "It took almost two years to achieve that milestone with iPod."The iPhone has helped AT&T appear more youthful, said Jeff Kagan, an Atlanta-based telecom industry analyst, but acquiring a new image for the consumer market while continuing to appeal to corporate and government customers may be a challenge."AT&T is a wireless leader but it's still got this big wired business, and that's not going away," said Kagan. "This is about putting on a new youthful coat for the consumer market. It's a follow-on to what they did last year with their logo when they went from using AT&T in capital letters to using at&t in lower case."This time, AT&T will shift from using blue as its predominant color to using orange, which had been the theme for Cingular, the wireless service that AT&T has rebranded as AT&T Mobility. ."It's the corporate version of getting a new hairstyle," said Kagan.The Web-centric part of the marketing effort will encourage customers to list the cities they most often frequent, say Chicago, Austin and San Francisco, that would be turned into a mythical place, perhaps called Chitinfrisco. Customers will be invited to describe their personalities, such as whether they are "lovers" or "fighters," said Troy Ruhanen, executive vice president and managing director of BBDO North America."We use the jumble of city names to make a word, add a personality profile and then offer T-shirts or coffee mugs with slogans reflecting the places and personalties of the individual," said Ruhanen. "It's not meant to be a home page. It's more an expression of their world."
Tuesday, September 25, 2007
Wednesday, September 19, 2007
Novastar Financial waives healthy dividend
NovaStar Financial’s stock plummets after waiving dividend
By DAN MARGOLIES
The Kansas City Star
In the latest sign of mounting woes that threaten its survival, NovaStar Financial lost about a fifth of its value Monday after deciding to stop paying dividends to investors.
The Kansas City-based subprime mortgage lender said its inability to pay the dividend would cost the company its status as a real estate investment trust. The action also could lead to its delisting by the New York Stock Exchange.
The struggling company said that it expected the change in its corporate structure to have “a significant adverse impact” on its third-quarter results, although it said it was in the process of determining its tax liability.
NovaStar’s stock took a beating in after-hours trading following the announcement. Shares tumbled nearly 20 percent in the evening to $6.70, down $1.54.
NovaStar has been scrambling to surmount the turmoil that has engulfed the subprime mortgage market in recent months. Among other actions, the company has slashed its work force from more than 2,000 last year to about 600 employees.
Crimped access to the credit and equity markets has roiled the once fast-growing company, which focused on providing mortgages to borrowers with shaky credit records. Monday’s announcement came two weeks after NovaStar canceled a $101 million stock offering to raise capital.
The company has gotten out of the retail and wholesale lending business and is now confining itself to managing its investment portfolio and servicing existing loans.
“We continue to take steps to preserve liquidity, mitigate risks and manage our portfolio in the midst of a difficult environment for the mortgage industry and capital markets,” Scott Hartman, NovaStar’s chairman and chief executive, said in a prepared statement Monday.
“Clearly, we did not anticipate the drop in market value or the level of demands on liquidity caused by the market turmoil this summer. Based on these events, we now believe canceling the previously planned dividend is the only reasonable and prudent course of action.”
Company officials could not be reached for further comment.
NovaStar had expected to drop its REIT status after reporting earlier this year that it expected little or no taxable income through 2011. The company, however, had planned to declare a dividend in the third quarter of 2007 to satisfy tax code requirements governing the distribution of its 2006 taxable income.
REITs are companies that specialize in owning and managing real estate for the benefit of shareholders. They pay little or no federal taxes on their profits provided they distribute most of those profits to shareholders in the form of dividends.
But NovaStar’s plan to distribute about $157 million in dividends to shareholders, by way of convertible preferred stock, fell by the wayside amid questions raised by its auditor, Deloitte & Touche, about its viability as a going concern. The company’s lush dividends — $5.60 per share last year — have been one of its chief attractions to investors.
One analyst, Scott Valentin of the investment firm Friedman Billings Ramsey Group, said in a report two weeks ago that the odds of NovaStar becoming insolvent had “increased significantly.” Valentin also said the eventual liquidation of the company was “highly probable.”
Like scores of other subprime lenders, NovaStar has experienced increased delinquencies and defaults among its borrowers, who do not qualify for conventional mortgage loans.
In the past, NovaStar has sold most of its loans to investors, but investors have stopped buying them because of the loan problems. Likewise, lenders to subprime companies have cut off much of their funding, forcing scores of subprime lenders to shut down, declare bankruptcy or look for investment partners.
NovaStar said the termination of its REIT status will be retroactive to Jan. 1, 2006. It said it expected the resulting tax liabilities to be offset by its tax losses this year.
By DAN MARGOLIES
The Kansas City Star
In the latest sign of mounting woes that threaten its survival, NovaStar Financial lost about a fifth of its value Monday after deciding to stop paying dividends to investors.
The Kansas City-based subprime mortgage lender said its inability to pay the dividend would cost the company its status as a real estate investment trust. The action also could lead to its delisting by the New York Stock Exchange.
The struggling company said that it expected the change in its corporate structure to have “a significant adverse impact” on its third-quarter results, although it said it was in the process of determining its tax liability.
NovaStar’s stock took a beating in after-hours trading following the announcement. Shares tumbled nearly 20 percent in the evening to $6.70, down $1.54.
NovaStar has been scrambling to surmount the turmoil that has engulfed the subprime mortgage market in recent months. Among other actions, the company has slashed its work force from more than 2,000 last year to about 600 employees.
Crimped access to the credit and equity markets has roiled the once fast-growing company, which focused on providing mortgages to borrowers with shaky credit records. Monday’s announcement came two weeks after NovaStar canceled a $101 million stock offering to raise capital.
The company has gotten out of the retail and wholesale lending business and is now confining itself to managing its investment portfolio and servicing existing loans.
“We continue to take steps to preserve liquidity, mitigate risks and manage our portfolio in the midst of a difficult environment for the mortgage industry and capital markets,” Scott Hartman, NovaStar’s chairman and chief executive, said in a prepared statement Monday.
“Clearly, we did not anticipate the drop in market value or the level of demands on liquidity caused by the market turmoil this summer. Based on these events, we now believe canceling the previously planned dividend is the only reasonable and prudent course of action.”
Company officials could not be reached for further comment.
NovaStar had expected to drop its REIT status after reporting earlier this year that it expected little or no taxable income through 2011. The company, however, had planned to declare a dividend in the third quarter of 2007 to satisfy tax code requirements governing the distribution of its 2006 taxable income.
REITs are companies that specialize in owning and managing real estate for the benefit of shareholders. They pay little or no federal taxes on their profits provided they distribute most of those profits to shareholders in the form of dividends.
But NovaStar’s plan to distribute about $157 million in dividends to shareholders, by way of convertible preferred stock, fell by the wayside amid questions raised by its auditor, Deloitte & Touche, about its viability as a going concern. The company’s lush dividends — $5.60 per share last year — have been one of its chief attractions to investors.
One analyst, Scott Valentin of the investment firm Friedman Billings Ramsey Group, said in a report two weeks ago that the odds of NovaStar becoming insolvent had “increased significantly.” Valentin also said the eventual liquidation of the company was “highly probable.”
Like scores of other subprime lenders, NovaStar has experienced increased delinquencies and defaults among its borrowers, who do not qualify for conventional mortgage loans.
In the past, NovaStar has sold most of its loans to investors, but investors have stopped buying them because of the loan problems. Likewise, lenders to subprime companies have cut off much of their funding, forcing scores of subprime lenders to shut down, declare bankruptcy or look for investment partners.
NovaStar said the termination of its REIT status will be retroactive to Jan. 1, 2006. It said it expected the resulting tax liabilities to be offset by its tax losses this year.
Friday, September 14, 2007
Lenders ease requirements on NovaStarWednesday September 12, 6:41 pm ET
Wachovia Bank National Association and its affiliates loosened certain lending requirements for NovaStar Financial Inc.
In a filing after the market closed on Wednesday, Kansas City-based NovaStar (NYSE: NFI - News) said that Wachovia, NovaStar's primary lender, and its affiliates on Sept. 7 eliminated the requirement for a certain ratio of NovaStar's adjusted tangible net worth to equity and cut the amount of net worth NovaStar must maintain by 71 percent, to $150 million from $517 million.Further amendments to lending agreements enable Wachovia to name a back-up servicer to service some or all of the securitization deals and loans NovaStar currently services, the SEC filing said.
NovaStar has suffered damaging blows the past few months as the subprime-loan market has virtually collapsed. Subprime loans are those made to customers with weaker credit and typically carry higher interest rates.
Published September 12, 2007 by the Kansas City Business Journal
Wachovia Bank National Association and its affiliates loosened certain lending requirements for NovaStar Financial Inc.
In a filing after the market closed on Wednesday, Kansas City-based NovaStar (NYSE: NFI - News) said that Wachovia, NovaStar's primary lender, and its affiliates on Sept. 7 eliminated the requirement for a certain ratio of NovaStar's adjusted tangible net worth to equity and cut the amount of net worth NovaStar must maintain by 71 percent, to $150 million from $517 million.Further amendments to lending agreements enable Wachovia to name a back-up servicer to service some or all of the securitization deals and loans NovaStar currently services, the SEC filing said.
NovaStar has suffered damaging blows the past few months as the subprime-loan market has virtually collapsed. Subprime loans are those made to customers with weaker credit and typically carry higher interest rates.
Published September 12, 2007 by the Kansas City Business Journal
NovaStar Financial shares rise as lenders grant some relief
By RICK BABSON
The Kansas City Star
NovaStar Financial Inc. late Wednesday said Wachovia Bank and its affiliates have eased some lending requirements for the troubled subprime lender.
In a filing with the Securities and Exchange Commission after markets closed, Kansas City-based NovaStar said Wachovia and affiliates cut the net worth the company must maintain by 71 percent, from $517 million to $150 million.
In midday trading, NovaStar shares were up 66 cents, or 8.99 percent, at $8 on the New York Stock Exchange. Shares closed at $8.18, up 84 cents, or 11.44 percent.
In recent weeks, troubles in the subprime sector and a national credit crisis have forced NovaStar to close both is retail and wholesale lending operations and trim down to 600 jobs from the 2,000 employees it had last year.
The company also had to cancel a stock offering that was to raise $100 million in badly needed cash after its auditor raised questions about its ability to survive.
It will try to live off its mortgage loan portfolio until the credit crisis runs its course.
By RICK BABSON
The Kansas City Star
NovaStar Financial Inc. late Wednesday said Wachovia Bank and its affiliates have eased some lending requirements for the troubled subprime lender.
In a filing with the Securities and Exchange Commission after markets closed, Kansas City-based NovaStar said Wachovia and affiliates cut the net worth the company must maintain by 71 percent, from $517 million to $150 million.
In midday trading, NovaStar shares were up 66 cents, or 8.99 percent, at $8 on the New York Stock Exchange. Shares closed at $8.18, up 84 cents, or 11.44 percent.
In recent weeks, troubles in the subprime sector and a national credit crisis have forced NovaStar to close both is retail and wholesale lending operations and trim down to 600 jobs from the 2,000 employees it had last year.
The company also had to cancel a stock offering that was to raise $100 million in badly needed cash after its auditor raised questions about its ability to survive.
It will try to live off its mortgage loan portfolio until the credit crisis runs its course.
Sunday, September 9, 2007
Novastar Financial, Inc. originates and services "nonconforming" residential loans to borrowers who generally do not qualify for conventional mortgages.
NovaStar retains interests in the nonconforming loans it originates and purchases through its mortgage securities investment portfolio and is taxed as a real estate investment trust.
Its four operating units are mortgage portfolio management, mortgage lending, loan servicing and branch operations.
[edit] Stock Price Volatility
Its stock was selling for $70 until the appearance of a Wall Street Journal story in 2004, which implied that the company's basic business model (making "high-risk loans to people with poor credit") would prove unsustainable. After that story, the price fell to $30 almost immediately. That figure served as a floor over the next couple of years. It would move upward for a time, only to return to $30. The company had some enthusiastic fans, who made the case that the stock price declines weren't so important as the fact that the company kept paying solid dividends.
During this period, too, the stock of NovaStar became a favorite of short sellers, and has become one of the foci of the controversies over short selling in general -- whether public policy ought to make it more difficult or easier, whether certain reporters and analysts are doing the bidding of the shorts, and so forth.
Liz Moyer of Forbes did a story on the retailization of securities lending in December 2006. NovaStar was her leading example of a stock that gets lent out by the new breed of retail-level lenders. She wrote that she had talked to (unnamed) investors who said they had received an 8% return on lending Novastar stock. That figure indicated an extraordinary amount of demand for shares to short sell.
On February 20, 2007, the company announced its fourth quarter 2006 figures: a loss that quarter of $14.4 million, or 39 cents per share. Analysts polled by Thomson Financial said they had expected a profit of 73 cents a share. This signaled the end of the dividend stream that had so re-assured investors in the past, as the company also announced that it did not expect any profits for the period 2007-2011. On this news the stock price halved overnight from $18 to $9. On March 12, when rumors swilrled that competitor New Century was nearing bankruptcy[1], NovaStar's stock price halved again to $4.
[edit] Legal Action
On March 20, 2007, the law office of Howard G Smith initiated a class action suit on behalf of investors against certain executive officers of NovaStar for inflating the stock price by deceptively reporting the company's financials. On April 2, 2007, the law office of Keller Rohrback initiated a class action suit on behalf of NovaStar 401(k) plan members on similar grounds. A third class action concerning NovaStar's charging of yield spread premiums, fees paid by the lender to the broker which has come under notable criticism, is set to go to trial in May 2007.[2]
In 2006, forty shareholders in NovaStar Financial, Inc. sued ten Wall Street prime brokers, claiming a scheme to manipulate rhw companies' stock by allowing naked short selling.[3]
Retrieved from "http://en.wikipedia.org/wiki/NovaStar_Financial%2C_Inc."
Categories: Companies listed on the New York Stock Exchange Real estate investment trust
NovaStar retains interests in the nonconforming loans it originates and purchases through its mortgage securities investment portfolio and is taxed as a real estate investment trust.
Its four operating units are mortgage portfolio management, mortgage lending, loan servicing and branch operations.
[edit] Stock Price Volatility
Its stock was selling for $70 until the appearance of a Wall Street Journal story in 2004, which implied that the company's basic business model (making "high-risk loans to people with poor credit") would prove unsustainable. After that story, the price fell to $30 almost immediately. That figure served as a floor over the next couple of years. It would move upward for a time, only to return to $30. The company had some enthusiastic fans, who made the case that the stock price declines weren't so important as the fact that the company kept paying solid dividends.
During this period, too, the stock of NovaStar became a favorite of short sellers, and has become one of the foci of the controversies over short selling in general -- whether public policy ought to make it more difficult or easier, whether certain reporters and analysts are doing the bidding of the shorts, and so forth.
Liz Moyer of Forbes did a story on the retailization of securities lending in December 2006. NovaStar was her leading example of a stock that gets lent out by the new breed of retail-level lenders. She wrote that she had talked to (unnamed) investors who said they had received an 8% return on lending Novastar stock. That figure indicated an extraordinary amount of demand for shares to short sell.
On February 20, 2007, the company announced its fourth quarter 2006 figures: a loss that quarter of $14.4 million, or 39 cents per share. Analysts polled by Thomson Financial said they had expected a profit of 73 cents a share. This signaled the end of the dividend stream that had so re-assured investors in the past, as the company also announced that it did not expect any profits for the period 2007-2011. On this news the stock price halved overnight from $18 to $9. On March 12, when rumors swilrled that competitor New Century was nearing bankruptcy[1], NovaStar's stock price halved again to $4.
[edit] Legal Action
On March 20, 2007, the law office of Howard G Smith initiated a class action suit on behalf of investors against certain executive officers of NovaStar for inflating the stock price by deceptively reporting the company's financials. On April 2, 2007, the law office of Keller Rohrback initiated a class action suit on behalf of NovaStar 401(k) plan members on similar grounds. A third class action concerning NovaStar's charging of yield spread premiums, fees paid by the lender to the broker which has come under notable criticism, is set to go to trial in May 2007.[2]
In 2006, forty shareholders in NovaStar Financial, Inc. sued ten Wall Street prime brokers, claiming a scheme to manipulate rhw companies' stock by allowing naked short selling.[3]
Retrieved from "http://en.wikipedia.org/wiki/NovaStar_Financial%2C_Inc."
Categories: Companies listed on the New York Stock Exchange Real estate investment trust
Wednesday, September 5, 2007
Novastar
NovaStar Financial to cut 275 jobs, cancel stock offering
By DAN MARGOLIES and MARK DAVIS
The Kansas City Star
Bad news continues to batter NovaStar Financial Inc., the Kansas City-based subprime mortgage lender caught in the undertow of a sinking industry.
The company on Tuesday said it was slashing an additional 275 jobs and canceling a stock offering aimed at raising $101 million to enable it to survive ongoing market turmoil.
NovaStar also reported that its auditor, Deloitte & Touche, had raised questions about its ability to survive.
Wall Street hammered NovaStar’s stock, with shares falling as much as 18 percent before closing at $7.16, down nearly 16 percent.
An analyst at investment firm Friedman Billings Ramsey Group said Tuesday that the odds of NovaStar becoming insolvent had “increased significantly.” The analyst, Scott Valentin, also said the eventual liquidation of the company was “highly probable.”
NovaStar, through its spokesman, declined to comment on the speculation swirling around the report.
NovaStar’s president and chief operating officer, Lance Anderson, said in a statement that the company’s goal was “to preserve and maximize” the value of its mortgage portfolio “through this difficult period for the industry” and that it would continue to “consider all necessary or appropriate changes or strategies.”
The layoffs and canceled stock offering were among several steps NovaStar said it was taking or considering as it sought to remain afloat amid the wreckage of the subprime industry.
The company plans to close 12 retail loan offices, laying off 275 employees, which will leave it with about 600 employees overall, including 440 at its headquarters at 8140 Ward Parkway. Last year the company had more than 2,000 employees nationwide.
NovaStar said it would focus for now on managing its portfolio of $15.45 billion in securitized loans, or loans that have been bundled into financial instruments.
Meanwhile, the company said it planned to evaluate “strategic alternatives for its loan servicing business,” which includes the collection of payments from more than 100,000 borrowers. Those alternatives include partnering with other companies, though NovaStar said it “cannot predict the outcome of that process at this point.”
The moves essentially mean that NovaStar is getting out of the lending business, at least for now, and focusing instead on managing its portfolio and servicing existing loans.
NovaStar said it might resume its wholesale business — loans originated through brokers and other third parties — if market conditions improved. The company announced last month that it was suspending new wholesale loans.
“We are pulling back to focus on NovaStar’s core strengths and preserve liquidity,” NovaStar’s chairman and chief executive, Scott Hartman, said in the company’s news release. “In better times for the industry, operating a sizable mortgage banking business to feed loans into the portfolio made strategic sense.
“But the secondary market has deteriorated substantially, so we are modifying our business model and further reducing costs for this difficult environment.”
The subprime mortgage market, which caters to borrowers with risky credit, has been buffeted in recent months by falling housing prices and soaring loan delinquencies. Its woes have spread to the larger credit markets and led to wild gyrations in U.S. and overseas financial markets.
Dozens of mortgage companies have curtailed or stopped lending or found buyers this year. Others have shut their doors or declared bankruptcy.
Next page >
To reach Dan Margolies, call (816) 234-4481 or send e-mail to dmargolies@kcstar.com. To reach Mark Davis, call (816) 234-4372 or send e-mail to mdavis@kcstar.com.
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This is not a NovaStar problem. This is a case of a bankrupt...
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