Thursday, June 13, 2024

Hubzu operator Altisource raising money in public stock offering

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The debt-burdened company notified regulators in December of plans to raise up to $100 million through a public stock offering.

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After posting a $53 million 2022 net loss, Altisource — the operator of real estate auction platform Hubzu and mortgage bankers alliance Lenders One — plans to raise money through a public stock offering.

In announcing the stock offering Thursday, Altisource did not say how much money it hoped to raise. But the Luxembourg-based company notified regulators in December of plans to raise up to $100 million through the sale of equity, including a $25 million at-the-market offering (“ATM”).

Shares in Altisource, which have traded for as much as $17.67 and as little as $5.52 in the past year, fell 15 percent in after-hours trading Thursday following the announcement.

In reporting an $11.3 million fourth-quarter net loss on $32.8 million in revenue on Feb. 3, Altisource said it ended the year with $51 million in cash and $196.2 million in debt.

The company said it had reached an agreement with creditors holding 98 percent of its existing term loans, spelling out conditions for a proposed refinancing of that debt in exchange for first-lien loans maturing in April 2025.

Industry trends and company momentum “should be in our favor” in 2023, with foreclosure starts and sales trending up at the end of the year, Altisource CEO William Shepro said in a statement.

William Shepro

“Our later stage and higher margin foreclosure and REO auction services should benefit from the early 2022 foreclosure initiations by late 2023 or early 2024,” Shepro said. “In the meantime, we anticipate revenue growth from the early phases of the ongoing recovery of the default market and conversion of the sales pipeline.”

In addition to operating Hubzu, Altisource powers investor marketplace, which is geared at helping investors in single-family rental homes acquire and liquidate individual properties or entire portfolios.

Altisource is helping create a one-stop online marketplace, by integrating rental data from RentRange, asset valuation data from Springhouse, auction services from Hubzu, closing and title services from Premium Title and inspection and construction services.

Altisource’s Lenders One Cooperative is a national alliance of more than 250 mortgage bankers who share access to a network of technology solutions and capital markets providers. Collectively, Altisource claims members of the Lenders One platform are the nation’s largest retail mortgage provider, originating more than $700 billion of mortgages during 2021.

A member of the Lenders One Cooperative, Family First Funding, opened the alliance’s first mortgage branch office inside a Walmart in New Jersey in October. The opening was part of a nationwide pilot program that will soon expand to Florida, California, Ohio, South Carolina and Texas.

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