NFI Novastar Finl

KANSAS CITY, Mo., July 27 /PRNewswire-FirstCall/ -- NovaStar Financial, Inc. (NYSE:NFI), a residential lender and mortgage portfolio manager, today announced that it effected a one-for-four reverse stock split of its outstanding common stock. NovaStar's common stock will trade, adjusted for a one-for-four reverse stock split, on Monday, July 30, 2007 under a new CUSIP number -- 669947889. As a result of the reverse stock split, every four shares of common stock were changed into one share of common stock. No fractional shares of common stock of NovaStar were issued upon the effectiveness of the reverse stock split. Instead, each stockholder otherwise entitled to a fractional share is entitled to receive in lieu thereof cash in an amount equal to the product of the fraction of a share multiplied by the closing price of NovaStar's common stock as reported by the New York Stock Exchange on July 27, 2007. Stockholders will be receiving information from NovaStar's transfer agent regarding the mechanics of exchanging their share certificates and receiving cash in lieu of fractional shares. Immediately after the reverse stock split, NovaStar had 50,000,000 shares of common stock, par value $0.01 per share, authorized, approximately 9,469,910 shares of common stock, par value $0.01 per share, outstanding, and approximately 40,530,090 shares of common stock, par value $0.01 per share, authorized but unissued. No changes were made to the number of outstanding shares of NovaStar's 8.90% Series C Cumulative Redeemable Preferred Stock or NovaStar's 9.00% Series D1 Mandatory Convertible Preferred Stock as a result of the reverse stock split. About NovaStar NovaStar Financial, Inc. (NYSE:NFI) is a specialty finance company that originates, purchases, securitizes, sells and invests in nonconforming loans and mortgage-backed securities. The Company also services a large portfolio of residential nonconforming loans. NovaStar specializes in single-family mortgages, involving borrowers whose loan size, credit details or other circumstances fall outside conventional mortgage agency guidelines. Founded in 1996, NovaStar efficiently brings together the capital markets, a nationwide network of independent mortgage brokers and American families financing their homes. NovaStar is headquartered in Kansas City, Missouri, and has lending operations nationwide. For more information, please reference our website at http://www.novastarmortgage.com/. This press release may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections, and assumptions. Actual results and operations for any future period may vary materially from past results. Some important factors that could cause actual results to differ materially from those anticipated include: our ability to consummate our recently announced transactions, our ability to generate sufficient liquidity on favorable terms; our ability to sell loans we originate in the market place; the size, frequency and structure of our securitizations; impairments on our mortgage assets; increases in prepayment or default rates on our mortgage assets; increases in loan repurchase requests; inability of potential borrowers to meet our underwriting guidelines; changes in assumptions regarding estimated loan losses and fair value amounts; finalization of the amount and terms of any severance provided to terminated employees; finalization of the accounting impact of our previously announced reduction in workforce; events impacting the subprime mortgage industry in general, including events impacting our competitors and liquidity available to the industry; the initiation of margin calls under our credit facilities; the ability of our servicing operations to maintain high performance standards and maintain appropriate ratings from rating agencies; our ability to generate acceptable origination volume while maintaining an acceptable level of overhead; the stability of residual property values; our continued status as a REIT; interest rate fluctuations on our assets that differ from our liabilities; the outcome of litigation or regulatory actions pending against us or other legal contingencies; our compliance with applicable local, state and federal laws and regulations or opinions of counsel relating thereto and the impact of new local, state or federal legislation or regulations or opinions of counsel relating thereto or court decisions on our operations; compliance with new accounting pronouncements; the impact of general economic conditions; our ability to adapt to and implement technological changes; our ability to successfully integrate acquired business or assets with our existing business; and the risks that are from time to time included in our filings with the SEC, including our Annual Report on Form 10-K, for the year ended December 31, 2006, and our quarterly report on form 10-Q, for the period ending March 31, 2007. Other factors not presently identified may also cause actual results to differ. Words such as "believe," "expect," "anticipate," "promise," "plan," and other expressions or words of similar meanings, as well as future or conditional verbs such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. This press release speaks only as of its date and we expressly disclaim any duty to update the information herein. DATASOURCE: NovaStar Financial, Inc. CONTACT: Media Relations, Richard M. Johnson, +1-913-649-8885, or Investor Relations, Jeffrey A. Gentle, +1-816-237-7424, both of NovaStar Financial, Inc. Web site: http://www.novastarmortgage.com/

Copyright