Why Shares of Newtek Business Services Are Plummeting Today
Shares of Newtek Business Services (NASDAQ: NEWT) traded roughly 30% lower as of 11:30 a.m. EDT today, after the business development company (BDC) announced an acquisition and a huge strategic shift in its business model.
Newtek announced on Monday that it plans to pay $20 million in cash to acquire the one-branch National Bank of New York City, a federally chartered bank, and convert from a BDC to a bank holding company.
National Bank of New York City comes with more than $200 million in assets, including $149 million of high-cost deposits and $175 million of loans, the majority of which are in commercial real estate. The combined companies will have more than $1.1 billion in total assets when the acquisition closes.
Source Fool.com
