NEW YORK (

TheStreet

) --

Newcastle Investment

(NCT)

shares jumped Friday on above-average volume after a hedge fund disclosed that it has acquired a stake in the real-estate investment company.

Hedge fund Appaloosa Management, founded by value investor David Tepper, said in a regulatory filing late Thursday that it had acquired 3.47 million shares of Newcastle Investment, good for a 6.58% stake in the company.

In a separate release Friday, Newcastle Investments said that it did not receive a sufficient number of shares of preferred stock prior to the expiration of its tender offer and will not purchase any preferred shares. The offer, which commenced on Nov. 18, was to purchase up to 2 million shares of its 9.75% Series B preferred stock, up to 1.1 million of its 8.05% Series C preferred stock, and up to 1.5 million shares of its 8.375% Series D preferred stock.

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Shares of Newcastle Investment were climbing by 22 cents, or 13.4%, to $1.86. More than 419,000 shares changed hands by 10 a.m. EST Friday, compared to the stock's three-month average daily volume of 770,000, according to Yahoo! Finance.

Newcastle Investment has a 50.6 million-share float with a short interest float of 4.8% as of Nov. 30, according to Yahoo! Finance. Insiders hold only 4.1% of the company's shares, with another 22.5% owned by institutions.

-- Written by Robert Holmes in Boston

.

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