Ah, the perils having an automatically updated news feed and stock price graph on your company's home page:

a new shade of blue chip

That's New Century Financial Corporation, which prides itself on being "A New Shade of Blue Chip." The trouble is that they are one of the largest of what's known as sub-prime mortgage lenders and the downturn in the housing market has hit them hard. Very hard.

Might that new shade be... red?

I was tempted to buy some of their stock earlier today for some of the same reasons that I considered buying airline stocks not long after 9/11. But it looks like trading has been suspended.

We'll have to see if the company sticks around, I guess.


Posted by jzawodn at March 13, 2007 01:48 PM

Reader Comments
# said:

More like a "new shade of unemployment" for us. But of course we are being told that the sun WILL shine tomorrow. rriiiiigggght!

on March 13, 2007 02:52 PM
# Charles said:

Ha.. you remind me of a friend of mine, he said I should buy WebVan, back when it was selling for like $0.02 and they were in Chapter 11. He said "you could buy $100 worth, and if they ever come out of Ch. 11, you'd be rich!" I told him he was nuts. WebVan was liquidated a week later and the stock was worthless. So I phoned my friend, I asked how his investment in WebVan went. He told me, "I didn't say I should buy it, I said YOU should buy it."

on March 13, 2007 03:14 PM
# Jeremy Zawodny said:


Yeah, it's a risk. But I made 5x my investment in WorldComm back in the day doing that. Bought at 5 cents/share and sold when it hit 25 cents (or something close to that).

I later kicked myself for not buying WAY MORE but realized that I had done the smart thing by limiting the risk.

on March 13, 2007 03:27 PM
# Peter Davis said:

Next time you feel the urge to invest in a company like that... consider just giving the money to some needy children. http://www.sos-usa.org

on March 13, 2007 06:09 PM
# Joe Zawodny said:

They are being delisted. Do not buy any. The airline stocks were a whole 'nother story. I sold some stuff today and bought oil (USO).

on March 13, 2007 06:26 PM
# Vietnam hotels said:

More like a "new shade of unemployment" for us. But of course we are being told that the sun WILL shine tomorrow. right!

on March 13, 2007 07:28 PM
# CJ said:

This is a company that just isn't coming back -- like Enron, they are worth a significant amount of negative money.

Accredited Home (LEND) is next.

on March 14, 2007 12:50 AM
# njon said:

You know what they say:

"short sellers make most of their money on stocks as they fall from $5 to $0."
"that 80% of all stocks trading below $5 apiece do not exist within five years."

IMHO roulette has better odds than these stocks.

on March 14, 2007 06:07 AM
# Vic Berggren said:

OK Jeremy! How`d you make those neato callouts?

on March 14, 2007 09:31 AM
# Ravi Dronamraju said:

Well, as the other comments say, there's a high likelyhood that new century is going to die.

What do you think of alternative energy stocks ? After the hype on them last year, they are all trading off the peak by a good percentage.

Is it still about the oil? or about alternate energy?

on March 14, 2007 11:20 AM
# Jeremy Zawodny said:

Dunno about the alternative energy stocks. Which ones have you looked at?

I haven't paid much attention to any, assuming they were going to be a much longer term play. But maybe not.

on March 14, 2007 11:35 AM
# Joe Duck said:

Mastercard notes:

Investments: $1000
Investments in red chip stocks:
price ... less

on March 14, 2007 12:26 PM
# Luigi Molinaro said:

Hi Jeremy, i'm so exited !!
I'm writing in your blog and for this reason i love internet and blogs... I'm reading your book translated in Italian "Mysql - advanced Guide" and it's one of the BEST book i ever read... simple but at the same time concise and direct.
Very useful for people tha buy books to improve it self.
Thank You!

on March 14, 2007 12:50 PM
# said:

Jeremy, not only did NCEN remove the content from their "new shade of blue chip" web page, but they also removed the text previously displayed next to the tree.

I just happen to have that text. It read:

"Celebrating a decade of performance rooted in integrity."

They also had a link to their print ads, which ran in the Wall Street Journal, LA Times, and other pubs.

Here's some examples of what their print ads said about "a new shade of blue chip"...

- (eye) "What's the secred to becoming #3 on Fortune's '100 Fastest Growing Companies list? NO SECRETS."

- (mountain road) We've established ourselves as one of Orange County's fastest growing companies. And we took the high road."

All of the print ads also contained this text at the bottom of the ad:

"Last year we grew loan origination volume 54%. When people think of traditional blue chip companies, they think of stability, longevity and steady growth. But it's not good enough for New Century Corporation, a real estate investment trust and leader in nonprime mortgage lending, providing mortgages to borrowers nationwide through our operating subsidiaries Home 123 and New Century Mortgage.

Today's blue chip companies need to combine integrity and stability with strong performance. Over the years we've delivered loan origination volume growth of an unprecedented 197%, stock price appreciation of 300%, and been named one of Fortune's 'Fastest Growing Companies' for the past two years.

And we managed all that with our integrity intact and adherance to our strict code of ethics.

Yes, we're proud of all we've achieved. However, we're even more proud of how we achieved it."

Jeremy, my colleagues and I are very disallusioned with the the admissions, allegations, and charges stating that NCEN was less than ethical and honest with us, their loyal employees, and the myriad others who have relied on their employer/mortgage lender/borrower for their livelihood, well being and reputation.

We were very proud to work for a company with such a great reputation - a breath of fresh air in today's world.

But, I guess we all "drank the Koolaid" and continued to work diligently while NCEN's owners, execs, and upper management quietly ripped everyone off. They sold their stock (see link below) and "exited stage left" with very little fanfare - only to cry "OOOPS!" several months later when it was too late.

I'm sure NCEN execs will find a way to keep their millions.

But I'm not so sure that they'll find a way for us to keep our jobs and benefits.

All we can say is "Thanks New Century. What goes around, comes around."

Insider Trading (NEW)


on March 15, 2007 12:42 AM
# Landon said:

"IMHO roulette has better odds than these stocks."

Roulette Odds With A Double-Ought Wheel:

37-1 for a single number- pure, dumb luck.

Odds playing penny stocks-

Unlimited, depending on your individual skill at assessing situational dynamics.

on March 18, 2007 11:32 AM
# Darryl Ramm said:

Now they have filed for bankrupcy. If Jeremy criticizes your company, run!

on April 2, 2007 05:38 PM
# Chris said:

I obtained a NEW CENTURY mortgage after filling out application in reston,VA office- it was then processed for final signing in a private home, frederick,md, The whole scam involved waiting and waiting while the paperwork “churned” out a sheet at a time ( in random order) because of (as it was explained) a “new person” at the other end_ So we ended up signing page 12, wait 5 minutes then sign page 8, wait ten minutes , sign page 6, etc- THE FINAL PAGE for signing was the page with
interest rate and payment and after belatedly signing was shocked to see we had signed for a interest rate about 35% more than originally bargained for- I’m sure these people are all back in INDIA now or maybe own 7-11s in the area.

on May 15, 2007 04:20 PM
# reverse mortgage calculator said:

Short and sweet post. All info are valuable.

on March 23, 2009 10:56 PM
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