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Newcastle Investment (NCT) prices its 20M share secondary, with gross proceeds of about $209.6M...

Newcastle Investment (NCT) prices its 20M share secondary, with gross proceeds of about $209.6M ($10.48/share?). The underwriters retain a 30-day option to buy up to 3M additional shares. Well-received? Newcastle is off just 0.3% to $10.72 in premarket trade. (PR)
Comments (5)
  • This one had me worried ... being that I'm PST I set up a conditional trade with my broker before I went to bed ... just canceled it ... looks like we're gonna be OK ... Good underwriting ... unlike BofA ...
    12 Feb 2013, 09:24 AM Reply Like
  • I'm just happy to get a quarterly check.
    12 Feb 2013, 10:02 AM Reply Like
  • Hope dividends continued along with stock increases.
    12 Feb 2013, 11:23 AM Reply Like
  • I was just looking at the trends inside the industry and revealed several areas of focus. All data can be verified by going to mortgagestats.com.
    1. The banks have enjoyed the perfect storm when it comes to MSR market share. The top three have grown out of the misfortunes of others and supported by the govt. Wells has not had as much growth as BAC or JPM. But between the three they have 4.5T out of 7.9T of the market. During 2007 the three had 2.7T. Then country wide failed and in 2008 BAC took over and all three held 5.2T. And for the years after the numbers have been the same.
    2. Now BAC is shedding MSR in a timely manner. If they were to divest all countrywide MSR that would leave 1.2T left to wind down. This would put them back at there 2007 level.
    3. JPM had 800B in 2007 and peaked at 1.5T in 2008. since then this number has come down to 1.1T. So YOY change is about 100B
    4. Now WFC had 1.4T in 2007 and now has 1.8T.
    5. Now for as applies to us. As Basel goes we could see another 600 to 800B coming from super banks. WFC uses this as a core but in order to comply they will have to wind down eventually. Same applies to JPM and Citi.
    6. Basel itself will not apply the needed urgency to divest. Next as the proposal goes Congress is finding ways to make these super banks smaller. I don't think something like Glass-Steagal but it will definitely impact them. As a fact Dodd-Frank didn't solve this and the banks just got bigger. So as the banks get smaller in order to comply they'll have to divest more. So Basel and Congress will help in spreading the wealth.
    7. So if NSM,FIG,NCT/NRZ can reach a point where they hold 1T in MSR a lot of money can be made.
    8. IMO this will take years up to 2019 for the bulk of divestures to happen.
    9. SPP is currently standing at 2X. As years go out SPP has room for growth to 3.5 to 4X. This affects our pps. As the value of each MSR multiple increases the economic worth will increase pertaining to pps. As Credit Suisse pointed out currently MSR on the books will be worth 6.15 per share or a 2X multiple. So grow the MSR on the books and as the multiple increases so will pps.
    10. It's going to be a long road and I applaud mgmt for going this direction. I also applaud all of you who have sat through this. I still sweat a lot even though I filled the truck at 0.47 per share a few years ago. Just trying to average down. But the investment is still strong.
    12 Feb 2013, 11:41 PM Reply Like
  • Truly amazing that 20 million shares hit the market at 8:30am and by 2pm over 14 million shares sold and the stock price holds within .02 of its open. (Still concerned to see how this soon to be delivered "stock split/spin-off" will work out, not to mention the 3 million shares that brokers have options on).

     

    Until the "spin-off" is finalized I'll continue to "hold" before adding to my position. Regardless this stock has performed well beyond my initial expectations when it was under $7.00/share...

     

    Aside: Has anyone run the numbers to see if this SPO is truly accretive to stock valuation?

     

    Regardless, good luck to all...
    13 Feb 2013, 02:40 AM Reply Like
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