The past 12 months have reduced FirstPlus Financial Group-by far the largest company in the controversial high-loan-to-value market-from a hot commodity to a short-seller's dream.

The company, which once had $2.3 billion in market capitalization, is now worth less than $445 million, with the sharpest decline coming in the past week. The company traded at a 52-week low Wednesday of $9.5625, a fraction of last October's high of $61.875.

Executives once said they would not sell for less than $100 a share. Now the company is expected to fetch at most a quarter of that, if it is sold at all. It has been on the block for four weeks.

On Sept. 29, FirstPlus said it was still "strongly engaged" in finding a strategic partner, and that discussions with more than one party were well under way.

"There has been much speculation ... but we have made significant progress," said chief executive officer Daniel Phillips. He added that the company plans to resolve the matter in the "next few weeks."

FirstPlus is being rocked even though demand for its core product- mortgages worth as much as 125% of a home's value-remains strong. Consumers are increasingly turning to companies like FirstPlus, which allow them to roll high-rate credit card debt into lower-rate loans partially backed by the equity in their homes. Since the product was introduced in 1995, high- LTV volume has doubled each year, according to a recent General Accounting Office report.

Why are investors shying away? One reason is that specialty finance companies have been hit by a cash crunch since early this year over concerns about the industry's accounting practices.

And companies like FirstPlus have been drawing attention from regulators and lawmakers worried about the risks homeowners take when they borrow more than their homes are worth. FirstPlus' application to buy a thrift has been pending at the Office of Thrift Supervision for about six months, reportedly because of regulators' concerns about the sector.

But unlike many of its peers, FirstPlus has not as yet been hobbled by rising delinquencies, loan losses, heavy prepayments, or fraudulent accounting.

Rather, observers said, the Dallas-based subprime lender seems to have been dragged down by surrounding market forces, botched communication with analysts and investors, and a whirlwind of rumors.

"Most certainly it is still a viable business," said one analyst who has downgraded several specialty finance stocks in recent months. FirstPlus "is probably a hell of a buy right now, in a sick sense," he said.

FirstPlus shares fell most dramatically over the past week, by about 50%, as investors reacted to talk that a planned buyout of FirstPlus had fallen through, and that the company is strapped for cash.

Investors apparently were disappointed that none of the mainstream lenders that were said to be looking at FirstPlus had stepped up with an offer. Prospective buyers were said to include GE Capital Corp., BancOne Corp., General Motors Acceptance Corp., Providian Financial Corp., and Norwest Corp.

Reports that the supposed front-runner, GE Capital, was not interested, along with a downgrade by a longtime booster of the stock, sent FirstPlus tumbling last week.

Late Thursday, four market sources said that GE Capital and one other lender-variously identified as Apollo Advisors Group or an overseas bank- were preparing to shore up FirstPlus, either by extending a line of credit or by taking a 50% stake in the company. A source close to GE Capital said the company was not looking at an acquisition, but he did not rule out the possibility of extending a loan.

Short-sellers have been attracted to specialty lenders, seeing the sector as vulnerable to writedowns and earnings volatility because of the peculiar accounting requirements for securitizers.

Like other securitizers, FirstPlus is required to predict how loans will perform and to book profits up front.

For most specialty lenders, this technique resulted in fat earnings when interest rates were stable and competition was slim. But more recently, many companies' predictions have missed the mark, forcing them to restate earnings. FirstPlus, however, was one of the first to adopt more conservative predictions, and thus escaped writedowns.

Even so, short interest in FirstPlus equaled 23% of its 37.88 million shares outstanding as of July 31, according to Bloomberg News.

FirstPlus has blamed some of the decline in its stock on a particular Internet investor who was spreading rumors. He is widely believed to be a short-seller who posts on-line messages as "Mr. Pink." A fund manager often said to be "Mr. Pink" downplayed his influence.

"I doubt that Putnam (Investments) sold their shares because they heard about some idiot that was putting messages on the Internet," he said.

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