NovaStar Drops Dividend

NovaStar (NFI Quote) sank 8% after the struggling mortgage lender canceled its dividend.

The Kansas City, Mo., company cited the sharp decline in its stock price and its inability to complete a planned securities offering last month. NovaStar said it is talking with the New York Stock Exchange about continuing its listing.

The company said the decision not to declare a dividend will end its tax-advantaged status as a real estate investment trust. The company, which had planned to pay out $157 million to meet REIT tax requirements, said the move will force it to include a charge for penalties and interest, and a valuation allowance against its deferred tax assets.

Shares fell 68 cents to $7.56.