Investors and warehouse lenders could lose confidence in New Century. New Century's business model is highly reliant on liquidity, so if investor confidence deteriorates and credit facilities are constrained, a liquidity event could ensue.
New Century's accounting issues and deteriorating fundamentals at its lending operation could put it at a steep downward slope, in our view, and we are more concerned that liquidity issues and adverse market reactions could undermine its business model and financial stability even further.
~ Kenneth Bruce, Merrill Lynch analyst, from a note to clients on Feb. 8, "Big banks control fate of subprime lenders," MarketWatch, February 16, 2007
(Merrill Lynch downgraded the stock to a sell.)

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