New developments in the strange case of NovaStar Financial, a subprime lender whose stock was aggressively pushed by stock market conspiracy theorists.
On Friday, NovaStar was delisted from the New York Stock Exchange and announced dismissal of 85% of its employees.
To me, what makes NovaStar interesting was how this mediocre lender became embraced in the bosom of anti-naked-shorting conspiracy theorists, who have a sizable following and did a great job of doling out misinformation to people who bought NovaStar stars.
Led by an Internet charlatan from Irvine, Calif., named Phil Saunders, they succeeded handsomely in convincing investors to ignore the mounting warning signals, and not sell their NovaStar stock.
The role of these charlatans in whipping up an investor frenzy over NovaStar, and other mediocre companies, is a subject that has been largely ignored by regulators.