This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

AmeriCredit Investor Could Lighten Stake

Updated to include latest share price.

FORT WORTH, TEXAS ( TheStreet) -- AmeriCredit (ACF) shares could see some weakness following the resignation of Bruce Berkowitz from its board.

Berkowitz is the co-founder and chief investment officer of Fairholme Capital Management, one of the subprime auto finance company's largest institutional investors. He also serves as portfolio manager of the firm's main investment vehicle, the Fairholme Fund (FAIRX), which held a 24.2% stake in AmeriCredit as of Sept. 30.

Berkowitz's resignation, which AmeriCredit announced on Monday, could mean that Fairholme is getting ready to sell some of its holdings in the company.

"It's hard to tell what the exact motivation here is, but I don't think it can be interpreted as a positive," says Sameer Gokhale, an analyst at Keefe Bruyette & Woods, referring to Berkowitz's decision to step down from the board "To the extent that you have a large shareholder with a seat on the board who is now stepping down suggests that as a possibility that Fairholme may be seeking to reduce its stake in AmeriCredit."

AmeriCredit said Robert Sturges, the president and CEO of Nevada Gold & Casinos (UWN), would be replace Berkowitz. Sturges is Fairholme's designee to AmeriCredit's board.

Fairholme Capital is AmeriCredit's second largest institutional investor behind Leucadia National (LUK).

Fairholme increased its stake in AmeriCredit back in December of last year through a debt-for-equity swap as the company was struggling for funding given the frozen credit markets. In the deal, AmeriCredit issued approximately 15.1 million shares of common stock to Fairholme, valued at $6.02 a share, in exchange for $108 million of par value 8.50% Senior Notes due in 2015. As part of the agreement, Fairholme and its affiliates agreed to limit its ownership of the lender's common stock to 28.9%. Prior to the exchange, Fairholme owned about 19.8% of AmeriCredit's outstanding shares.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,160.17 +129.03 0.76%
S&P 500 2,000.82 +16.69 0.84%
NASDAQ 4,548.3870 +29.4850 0.65%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs