Shares of Contifinancial Corp. gained more than 60% last week on rumors it was close to arranging a sale or cash infusion.
The New York company has been plagued by the same capital constraints as other nonbank lenders. Its shares had fallen to about $3 earlier this month, from over $30 in the first half of 1998.
Last week, though, they rose steadily, to close at $5.1875 Friday. (They were trading at $5.125 late Monday afternoon.) More than 262,000 of the company's shares changed hands Friday, against a daily average of 65,000.
Contifinancial bonds also rallied last week, and rose sharply on Friday, a trader said.
Analysts said they could not identify a buyer. A posting on a Yahoo message board named GE Capital Corp. as the interested party.
Conti chief executive officer James Moore did not return phone calls. A GE Capital spokesman said Monday that the company does not comment on such rumors.
Contifinancial said last year that it was looking for a buyer. In mid- February the company announced a $58 million loss for the three months ended Dec. 31 and said it was still in talks with equity investors.
Contifinancial also said then that it would be reducing wholesale originations and securitizing more frequently.
Despite its reported cash shortage, Contifinancial has brought several asset-backed deals to the market this month. On March 5 it priced a $650 million issue. On March 17, Triad Financial Corp., its auto lending subsidiary, priced a $127.4 million deal backed by auto finance loans.
Contimortgage, the retail home equity subsidiary of Contifinancial, is marketing a $550 million securitization, according to news service reports.