Silence Has Been Golden for Fremont

0

The stock of Fremont General Corp. gained more than 78 percent last week nearly twice as much as the second-biggest gainer on the LABJ Stock Index of 200 local companies. Why was there so much interest in the Santa Monica-based lender, whose shares have been so mercilessly beaten down in the subprime meltdown earlier this year?


Rumors abounded. One was that Texas billionaire Gerald Ford, who led a group of investors that put $80 million into the struggling company in May, was set to take the reins of the company. Another unfounded report said that institutional investors were buying up the stock. Others held that hedge funds were buying up the shares in the morning and dumping them before the market closed.


Companies and their spokesmen typically tamp down unfounded rumors, whether by out-and-out denials or through more subtle means. But Fremont and its spokesman, Dan Hilley, had no comment, regardless of the rumor du jour.


That was no surprise to Fremont watchers.


“I dropped coverage on them three weeks ago after they never returned my phone call,” said Theodore Kovaleff, with New York-based Sky Capital LLC, the only listed analyst for the company. “Actually, make that seven phone calls.”


Shares in the notoriously silent lender closed Wednesday at $5.46, up 78 percent from the week-earlier price of $3.06. However, the company was still off 67 percent for the year.


Kovaleff feels the stock should be trading “in the $10 range.”


Shares in Fremont were trading down 59 cents, or 11.6 percent, Monday to $4.51 on the New York Stock Exchange.

No posts to display