Busy like a beaver at NewStar…
Yesterday was a very busy day for NewStar Financial (NEWS): they announced 3rd quarter earnings, held a conference call, and issued this press release announcing a $125 million private placement at a 10% premium to what the stock was trading at before the news.
Given all that activity — there were five separate SEC filings from the company yesterday — it’s understandable that this 8-K on the resignation of Managing Director Phillip Burnaman might not have attracted much notice. Burnaman had been in charge of NewStar’s Structured Products, which according to the slides released yesterday, represents the smallest piece of NewStar’s portfolio. Still, the company didn’t provide any details on why Burnaham was stepping down — not even for personal reasons. But there may be a hint from this sentence in his online bio: “Mr. Burnaman has been involved with mortgage-backed, asset-backed and real estate-related securities since 1984.” (Ed note: NewStar wasted no time on Thursday taking the bio down, so we had to turn to archive.org to change the link). The lack of attention seems particularly strange because just last month, NewStar issued this release on the resignation of one of its directors.
Since going public last December at $17, NewStar’s stock has continued to decline. The separation agreement attached to yesterday’s 8-K provides Burnaman with a $450K payment and a few other goodies, including accelerated vesting of options. As earlier filings note, Burnaman is also the head of the audit committee for California Coastal Communities (CALC), another stock that has dropped sharply this year.
So even piecing the filings together, investors seem to only be getting part of the story here.