Shares of New Century Financial Corp. were officially booted from the New York Stock Exchange Wednesday and now trade on Pink Sheets, a haven for penny stocks.
The move is another sign of how far the subprime mortgage lender has fallen, trading a prestigious NYSE listing for a lowly place on Pink Sheets, where listed companies don’t need to file statements with the Securities and Exchange Commission or meet other requirements.
Shares of New Century were trading at about 65 cents at recent check, less than half of where they were on Monday when the NYSE suspended trading.
The company’s shares now are down 98% since February.
New Century’s spiral started last month when the company warned of a loss for the recently ended quarter, projected a big drop in loans this year and said some 2006 results will be restated to fix accounting errors.
This month, lenders that provide New Century with credit to make loans have cut off funding.
Investment banks that bought New Century loans packaged as bonds are triggering deal provisions to have the company buy back loans that have gone bad.
Earlier this week, federal prosecutors and the SEC started probing stock sales at New Century prior to the accounting error disclosure.
