Wellington Investment Mgt manages 100s of private label funds. I believe NOVC Board controlled by 2 DX investors + Chuck Gillman/Whitney Tilson & Ex Soros Portfolio Mgr Jeff Eberwein and their appointees; David Pointer, Tim Eriksen & Lee Keddie want their RSUs. Why will NOVC Board not transparent to all shareholders, it must be they want more RSUs. Jeff Eberwein as COB and CEO of NOVC during Ch 11 picked up over 1m RSUs to go with his 3.2M common (see Form 4s April-Oct 2015), ditto for Chuck Gillman. Howard Amster and Barry Igdaloff are two major DX investors (BI long time DX Board Member) hold millions of NOVC common yet have continued to award themselves with more RSU over 1m each (2017-18) valued at pennies. NO NOVC Board Member should sit and represent a fiduciary duty to NOVC common shareholders without buying a material sum of common per Sarbanes Oxley SOX which is the LAW.
NOVC Board must be planning and if not ask them why not to:
1. Copy Fortress' playbook at NCT Newcastle Investment Group which Fortress split into NRZ 15 pps & DS 5 pps. NOVC can do the same by spinning out as separate company NFI Novastar Financial Inc. (similar to NationStar Fortress just sold to COOP Mr. Cooper aka WaMu Washington Mutual holds 7B NOL (17% KKR owned) and operate by Fortress as MREIT just like Fortress does with NRZ see home page below. Fortress split from Newcastle Inv Group NCT Drive Shack DS which kept all NCT's NOLs obviously because a REIT does not need NOLs $730M. I believe NOVC Board and two big bros Mass Mutual Barings & Fortress have known this all along. If true this means the Sr Debt has been used as a shield for Ch 11 and to keep Mr. Market away from NOVC while they pad their nests. NOVC Board (2 DX investors plus Chuck Gillman his mate Jeff Eberwein/Lone Star Value Mgt HF & their designate during CH 11) gave Sr Debt in Ch 11 a windfall including: all back interest compounded $5.8M + $500k Nondefined penalty versus CRAM DOWN which NOVC CH 11 lawyer from Shapiro Sher, Joel Sher Founding Partner, should have done for his black tie award (M&A Advisor) given Shapiro Sher naming NOVC as the small cap turn-around of 2017 (Hello NOVC at 2 cts and going concern less than 30 days from exit from Ch 11 in Q1 and a quasi-going concern Q2 per Pacer Monitor ). 10Q for Q2 clearly shows for deferred interest only NOVC Board has awarded Sr Debt aka Fortress 2/3rds and FBR 1/3rd via CDOs they control amounting to 31.3M Common/Warrants at less than one penny. These are facts.
I interviewed several ex executives from Healthcare-Staffing HCS. They told me HCS business model is proven and if they expand to just half the states could be a $500M Revenue business with est 30M EBITDA. Why is NOVC Board not communicating about this? Why has NOVC Board kept HCS web site down for over two months for maintenance while at the same time allowing 3 top executives to walk within weeks of each other 2019 - one with 1m NOVC RSU? I listen to ex NOVC COB and CEO Jeff Eberwein speak at public shareholder call at Hudson RPO trades HSON. JE is now CEO of Hudson RPO and he speaks about aggressive M&A in HSON future. NOVC Shareholders should be informed of the truth about HCS and the tremendous proven potential because these moves by NOVC Board could be a prelude to giving HCS away to Jeff Eberwein COB and CEO of HSON and ex COB/CEO of Novation Companies, Inc OTCBB:NOVC.
Could this odd behavior at NOVC Board be because they know the changes made to NOVC poison pill approved Oct 4, 2018 read pages 11-15 Rights Offering included changing the poison pill from inserting language from "bonds for common" if investor breaches the 4.99% IRC Sec 382, to a private placement if your in good standing you can invest in private placement or 500M Common Equivalents aka rights to one NOVC Common Dividend (Collect) and Votes (Control) priced at exactly Mass Mutual Barings cost basis 2.33/common right page 13.
NOTE CDOs Taberna I & II own 67% of NOVC Sr Debt which means Fortress holds NOVC Sr Debt. Google “Fortress purchase of all 8 Taberna CDOs from RAS RAIT Financial in 2010” same year Barry Igdaloff and Howard Amster joined NOVC Board (at the time time Fortress public traded FIG, they went public 2007 $7B+ market cap to sell to SoftBank for $3.3B 2017. Wesley Edens COB ex Head of MBS desk at Blackrock and Peter Briger Head of Fortress Credit at FIG ex Goldman Sachs walked with over B $1,000,000,000 cash between the two of them -- now that is talent not to be wasted by NOVC.
2. NOVC Board (3 of 5 have no SKIN in the game meaning they have never invested in dime in NOVC common shares). So why are they there? I believe by appointment of Jeff Eberwein, Chuck Gillman refer to me by Whitney Tilson. This appears: to a reasonable investor, as a conflict of interest as NOVC board #1 goal, while knowing this real plan appears to be motivated to drive NOVC share price as low as possible to award themselves massive RSU, (see last 14A proxy 4 of 5 awarded themselves 833,333 converting $25,000 Board pay at 3 cts per share).
Shareholders need to call NOVC Board out for this outlandish behavior, as I am sure they are thinking of 2019 14A proxy, see www.otcshortreport.com no economic investors is shorting NOVC.
I will say it again, NO NOVC Board Member should sit and represent a fiduciary duty to NOVC common shareholders without buying a material sum of common per Sarbanes Oxley SOX which is the LAW.
Note Thomas Akin, ex COB/CEO of Dynex Capital DX (sat on DX Board with Barry Igdaloff for years) is a large shareholder in NOVC, DX and IMH where with his HF Talkot Capital owns 1.6m IMH shares. IMH is going full bore securitizing with AAA Ratings from S&P the same asset class NOVC holds call rights on most of $3B portfolio (right to call back collateral assets Non-QM aka Subprime Mortgages & resecuritize like IMH at NIMs north of 400 Bpts) https://finance.yahoo.com/quote/imh
New Residential Investment Corp. (NYSE: NRZ) is a publicly traded real estate investment trust (“REIT”) that focuses on investing in, and actively managing, investments primarily related to residential real estate.
We aim to drive strong risk-adjusted returns primarily through investments in (i) Excess Mortgage Servicing Rights ("MSRs"), (ii) Servicer Advances, (iii) non-Agency residential mortgage backed securities ("RMBS") and associated call rights.
Our objective is to leverage our proven investment expertise to deliver attractive returns that will help drive strong and growing dividends to our shareholders. We target assets that generate stable long term cash flows and employ conservative capital structures to generate returns throughout different interest rate environments.
Over the last few decades the complexity of the market for residential mortgage loans in the U.S. has dramatically increased. We believe that unfolding developments in the approximately $21 trillion U.S. residential housing market are generating significant investment opportunities. For example, in the aftermath of the U.S. financial crisis, the residential mortgage industry is undergoing major structural changes that are transforming the way mortgages are originated, owned and serviced. These changes are creating a compelling set of investment opportunities. We believe that New Residential is one of only a select number of market participants that have the combination of capital, industry experience and key business relationships we think are necessary to take advantage of this opportunity.
New Residential was formed as a wholly owned subsidiary of Newcastle Investment Corp. We were subsequently spun off as a separate publicly-traded entity on May 15, 2013. We are externally managed and advised by an affiliate of Fortress Investment Group LLC and benefit from the resources of a highly diversified global alternative investment manager.
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