Altisource Portfolio Solutions is doing a reverse split of outstanding common stock, effective Wednesday May 28, to regain market listing compliance.
The Luxembourg-based company, known as the former servicing platform provider for Ocwen (which recently rebranded to Onity) is listed on the Nasdaq Global Select Market.
Why Altisource is doing a reverse split
On Dec. 19, 2024, Altisource received a notice from Nasdaq stating the common stock no longer met the minimum bid price rule of $1 per share for 30 consecutive business days.
The following day, Nasdaq sent a second notice that the market value of its common stock was below the minimum requirement of $15 million for continued listing.
But an 8-k filing on March 14 said a new notification from Nasdaq said since the market value was $15 million or greater for the 10 business days from Feb. 19 to March 11, Altisource was back in compliance for this standard only.
How Altisource plans to regain Nasdaq compliance
At its May 13 annual meeting, Altisource shareholders approved an eight-for-one reverse split in order to cure the share price deficiency by 59.6 million in favor and 194,992 against. The transaction will take place on May 28 when the market opens for trading.
Fractional shares will not be issued as a result of the consolidation; instead, holders will be paid in cash based on the May 27 price.
On May 23, Altisource Portfolio Services closed at 84.7 cents per share; at 11 a.m. on May 27, the price was just over 82 cents per share.
In the first quarter, Altisource Portfolio Services lost $5.3 million, a 42% improvement over a loss of $9.2 million one year prior.
Why Altisource Portfolio Solutions had to evolve
The company was forced to change its business model when a regulatory settlement in 2017 required Ocwen, which it had a shared history with including a common leading executive in William Erbey, to find a new mortgage servicing platform.
It made the decision to switch to what was then Black Knight’s MSP. In turn, this led Ocwen to acquire PHH.
An earlier 2014 regulatory agreement forced Erbey out at Ocwen, although he later returned to head up another separate entity, Altisource Asset Management.
Its boilerplate describes Altisource Portfolio Services “as an integrated service provider and marketplace for the real estate and mortgage industries.”
