PMCC Financial Corp. has completed an initial public offering in what is expected to be the first of a wave of subprime mortgage companies coming to market.
But judging from PMCC's first-day performance Wednesday, the Street may not be ready for another rash of public lenders that cater to borrowers with damaged credit.
The Roslyn, N.Y., lender offered 1.25 million shares at $9 each. By Wednesday's close, the stock price had fallen to $8.
The equity markets have not been kind to subprime companies in the past six months, but some observers say that is not stopping new lenders.
"People are gearing up to go public again," said specialty finance veteran R. Harold Owens, president of World Acceptance Corp., a Greenville, S.C., consumer finance company.
For example, several former employees of FirstPlus Financial Corp., the Dallas-based leader in the high-loan-to-value mortgage market, plan to bring a high-LTV lender public in the near future, Mr. Owens said.
In addition to B through D loans, PMCC Financial provides short-term financing for one- to four-family residential rehabilitation properties.