New Century Financial Corp. could have a fight on its hands.
Hedge fund manager Greenlight Capital Inc. of New York has taken a shot at the Irvine-based subprime mortgage lender, saying New Century’s executives haven’t done enough to boost its stock.
Greenlight principal David Einhorn went as far as calling New Century’s central strategy a failure.
The inflammatory statement, made last month in a filing with the Securities and Exchange Commission, has fueled speculation about what Einhorn plans to do next.
Greenlight “may make proposals to (New Century’s) management and its board of directors, and may engage financial, legal and other advisers, to explore value-creating alternatives,” the company said in its filing.
Those alternatives include “changes to the overall strategic direction of (New Century), corporate structure, capital allocation, capital raising activities, declassification of the board, board and management composition and related topics.”
Greenlight is New Century’s largest shareholder, at about 9% after some recent buys. The company declined to comment for this story.
The Greenlight action was a minor factor at New Century’s annual shareholder meeting last week, bringing a couple of questions from analysts. A company executive said during the meeting the filing was a surprise but declined to say much else about it.
In an e-mail, a company spokeswoman said, “We are committed to having an open dialogue with our stockholders and we routinely communicate with them. We are very focused on building stockholder value, and we are confident that executing our business strategy as planned will create long-term stockholder value.”
For more on this story, see the May 23 issue of the Business Journal.
