Countrywide Leads Insider Selling Spree
The purchasers have lost $14.6 million ... so far.
Then there are the directors and executives at Accredited Home Lenders Holding (LEND). You may have heard about the company recently. It's in a cash crisis thanks to spiking mortgage defaults. It just sold $2.7 billion worth of mortgages at a big discount to face value to shore up reserves. It's so desperate, in fact, that it just paid through the nose to some private-equity sharks for an emergency $200 million advance. Interest rate: 13% a year. How's that for a subprime loan?
No wonder the stock price, which touched $60 as recently as last year, has just collapsed to a mere $10.77.
But the insiders were able to cash out $29 million when the going was good, at an average price of $36.95.Or, to put it another way, the investors who bought those shares have already lost $21 million of their investment. At Santa Monica, Calif.-based Fremont General (FMT ), insiders sold shares between early 2004 and last summer for $17.2 million. That may not seem like much, in the grand scheme of things. But it seems pretty big compared to the $8.1 million those same shares are worth today. The stock, $23 early last year, is down to just $8.78. And congratulations to the folks running NovaStar Financial (NFI) in Kansas City, Mo. Hard to believe the stock once soared above $60. Today it's less than a tenth that, at $5.84.
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