Bay View Capital Corp. lost $326 million last year and nearly $8 million last quarter, but that has not stopped investors from gobbling up its stock.

Since bottoming out at $4 on April 3, stock in the San Mateo, Calif., company had climbed nearly 80%, to $7.18, at Thursday’s close.

Observers attribute the sudden spike to the company’s hiring of Robert B. Goldstein, a well-known turnaround specialist who took over as president and chief executive officer in late March.

In little over two months, Mr. Goldstein has revamped Bay View’s management team, spearheaded a rights offering that raised $137.5 million — and was so oversubscribed that the company returned more than $50 million to investors — and outlined a plan to rid the company of its money-losing units. Investors are betting that Mr. Goldstein, who has also promised to cut the workforce by 15% before yearend, will do for Bay View what he did for Regent Bancshares Corp. in Philadelphia: Clean up the balance sheet and sell the company at a handsome profit.

“Bob Goldstein has a lot of credibility,” said one investment banker. “The street just knows that Bob is good at dealing with a bad situation. He comes in, blows up the problems, gets the stock up, and then sells the companies. When Bob walks in, you know the clock is starting to tick for a sale.”

Bay View, the $4.9 billion-asset parent of Bay View Bank, was on the block last year but failed to attract a decent offer, according to analyst Campbell Chaney at Sutro & Co. in San Francisco. He said Wells Fargo & Co. and Golden State Bancorp were both rumored to be interested in Bay View but wanted a deep discount for taking on mounds of bad loans from Bay View’s now-defunct franchise lending division.

But if Mr. Goldstein’s turnaround plan succeeds, Bay View may start to appear on more radar screens. One potential buyer: Zions Bancorp of Salt Lake City, which invested $4 million in Bay View’s recent rights offering.

Clark Hinckley, a spokesman at $22 billion-asset Zions, would not name names but said, “We are continuing to look at acquisitions, particularly throughout our markets in the West.”

Mr. Goldstein, for his part, was reluctant to discuss his long-term strategy, though he was quick to say, “It’s not fair to shareholders to not look at every opportunity.”

For now he is mainly interested in disposing of some $500 million in high-risk loans originated by the franchise lending unit, which catered to owners of fast-food restaurants, gas stations, and convenience stores. Mr. Goldstein, 60, said that the entire portfolio may be sold in bulk by the end of the second quarter.

Bay View is also planning to sell its two other high-risk businesses, an auto leasing finance company and a high loan-to-value home equity finance company. After Bay View converted from a thrift to a commercial bank in 1999, it focused on acquiring finance companies to build up assets, Mr. Goldstein said. His team is moving in a different direction.

“Previous management had been leveraging Bay area deposits to buy the finance companies, which were nationwide in their focus,” Mr. Goldstein said. “We’re retrenching back to being strictly a Bay area bank.”

Despite Bay View’s recent troubles, observers say it has one of the most attractive deposit franchises in the San Francisco Bay area. It plans to capitalize on that strength by offering more products through its 57 branches and beefing up its commercial lending.

“We are repositioning it to be a major commercial lending institution in the Bay Area, which this bank really has never been,” Mr. Goldstein said.

A turnaround of Bay View would be another feather in Mr. Goldstein’s cap, said David Winton, an analyst at Keefe, Bruyette & Woods Inc. in New York.

“He has a track record of saving companies that have had asset quality problems and were under regulatory mandates,” Mr. Winton said. “Each case was a little different, but all required recapitalization to clean up the balance sheets. Almost every bank he has headed has eventually sold, with shareholders making out quite well.”

For example, Mr. Goldstein was able to spruce up troubled $250 million-asset Regent, which was sold in 1998 to neighboring JeffBanks Inc. for $56 million, or 2.93 times book value. At $2 billion-asset JeffBanks, Mr. Goldstein convinced the board to finally entertain a sale and, a year later, the company was acquired by $7 billion-asset Hudson United Corp. of Mahwah, N.J., for $350 million, or 2.75 times book.

Mr. Goldstein has enjoyed strong support from institutional investors whenever the time has come to recapitalize banks with which he is involved.

Those investors again supported Mr. Goldstein in the recent rights offering for Bay View. In fact, many of them went out and bought up more Bay View stock with money that was returned to them from the oversubscribed rights offering.

“I think they went into the market and bought the stock, which I speculate accounts for the volume” on May 29, Mr. Goldstein said, which was nearly five times the daily average. “I’ve seen some pretty successful offerings, but I’ve never seen anything like this.”

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