Flagstar Bancorp, one of the nation’s largest residential wholesale funders, is taking steps to shore up its stock price.
The $14.3-billion-asset company's board this week approved a reverse split of outstanding shares that will give holders of Flagstar common stock prior to Oct. 24 one share for every 10 they own.
Flagstar said the transaction would help the company continue to meet requirements of the New York Stock Exchange, which can suspend a company's shares from trading if the average closing price of its common stock is less than $1.00 over a consecutive 30 trading-day period.
Flagstar's shares have been trading below $1 for much of the last 14 months and are down 79% since it last completed a one-for-10 split in May 2010. Its shares were trading at $1.06 midday Thursday, up nearly 4% from Wednesday's close.
Among residential wholesalers,
"The board believes that the reverse stock split, combined with our improving results, will further improve the market for Flagstar's common stock, making it more attractive to a broader range of investors and analysts, while also allowing the Company to regain eligibility for inclusion on the Russell index," said company president Joseph P. Campanelli.
In July, Flagstar
This past week a federal judge