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Ocwen Stock Drops Below NYSE Standard

Ocwen Financial Corporation, the parent company of reverse mortgage lender Liberty Reverse Mortgage, has been notified by the New York Stock Exchange (NYSE) that the average per share trading price of its common stock was below the NYSE’s minimum average share price rule, which could potentially lead to the stock’s delisting from the exchange without corrective action.

The NYSE requires that the stock price of a listed company be at least $1.00 per share over a consecutive 30 trading-day period, and the exchange sent written notification to the company on April 8 that its stock failed to meet that threshold. Over the past 30 days, the highest per-share value that the stock reached was $0.80 on March 17, while the lowest per-share price in that same period of time was $0.31 on April 3.

“In accordance with the NYSE’s rules, Ocwen has six months from receipt of the notice to regain compliance with the NYSE’s price condition,” said Ocwen in a press release announcing its notification by the stock exchange. “The Company can regain compliance at any time during the six-month cure period if on the last trading day of any calendar month during the cure period or on the last day of the cure period, Ocwen has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on such date.”

In an effort to increase its share price, the company is currently contemplating the implementation of a reverse stock split, which could increase the per-share price and bring it back into compliance with the NYSE listing standard. The company also plans to, “reduce the number of its authorized shares of common stock by the same proportion as the ratio chosen for the reverse stock split,” according to its press release.

The company’s board of directors plans to request shareholder approval of the reverse stock split proposal on an advisory basis at the company’s upcoming annual shareholder meeting on May 27. 

“The Board intends to take into account the results of the advisory vote as well as changing market conditions and other developments which may impact the company’s stock price in order to make a determination with respect to the best course of action to pursue in order to regain compliance with the NYSE’s minimum share price requirement,” Ocwen said in its press release.

Even if the shareholders do not approve of the plan, the board of directors reserves the right to implement it anyways if the proposed split is deemed to be in the best interest of the company and the shareholders, Ocwen said.
Liberty Reverse Mortgage recently rebranded and began operating as a division of the Ocwen-owned PHH Mortgage Corporation in March.

Liberty Reverse Mortgage is currently ranked as the fifth largest reverse mortgage lender by Home Equity Conversion Mortgage (HECM) volume, according to data from March 2020 tabulated by Reverse Market Insight (RMI).