NetBank (NASDAQ:NTBK) is the nation’s oldest active Internet bank serving retail and business customers in all 50 states. They were rated a ‘Top 10 online banking site’ by the Keynote WebExcellence Scorecard for Banks so with the Web 2.0 making a comeback, you would think NetBank would be at the forefront – not quite. NetBank shares have fallen 84% in the last year, gone are the 2 cent dividends, and they can barley keep their share price above $1. Before the tech bubble burst, NetBank hit $57 a share, but today they are struggling to remain on the NASDAQ.
Last week NetBank received it’s second warning from NASDAQ to get their quarterly filings in order otherwise "hello OTC trading and get ready for Peter Leeds to talk it up as a penny stock." Tell me you’ve seen his ads, I know you have? He claims to be the "Penny Stock Professional", because nothing says investment genius better than the title of "Penny Stock Professional", do you think he puts PSP at the end of his name on his business cards? Its a wonder Warren Buffet or Eddie Lampert haven’t snatched up his talent but when you have your own infomercial and a $200 annual subscription for Penny stock picks, why would you do anything else but slap your ads all over the internet and go for broke? As an added bonus, when you visit Leed’s site you may notice the strategic and intense "investing music" running on a constant loop. Wow, Leeds is "a Professional". If only 247WallSt.com had that music, we’d be in business? Maybe the next upgrade.
Today shares of NetBank are down 45% after reporting this morning that they will record a loss of about $60 to $70 million on the sale of certain assets and transfer of deposit liabilities to EverBank, a unit of privately held EverBank Financial Corp. The deal should close in June and primary assets and liabilities in the transaction include the bank’s $2.5 billion core and brokered deposits, the NetBank brand & related trademarks and service marks. But why stop there? They didn’t, the deal also includes Netbank’s held for investment loan portfolio, and all assets and liabilities of NetBank Business Finance, the bank’s small business equipment leasing and financing operation.
Reuters today reported that Steven Herbert, NetBank’s CEO, said the company is actively evaluating long-term strategic alternatives for its mortgage servicing operation, along with its retail prime mortgage franchise, Market Street Mortgage, as well as those of the parent company as a whole.
I’m not sure what could come next, maybe a NetBank yard sale or an everything-must-go ONE DAY MORTGAGE SALE!!!! I’m sorry to say but NetBank isn’t going to make it to this year’s Web 2.0 awards, maybe next lifetime. But for Peter Leeds, here’s your heads up about NetBank, go get em’ tiger.
Frank Lara Jr.
Frank Lara Jr. can be reached at [email protected]; he does not own securities in the companies he covers.
24/7 Wall St. has covered this one before and was unable to come up with any positive valuation when the stock sat at $3.87 in January, and that is after panning it previously in July 2007 at almost $6.00.
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