Sterling Financial shares plunge
The price of Sterling Financial Corp. stock fell more than 50 percent Monday, the first day of trading after the registration Friday of 4.2 billion new shares.
The shares were issued to new shareholders, who in August put more than $700 million in new capital into the Spokane financial institution. The U.S. Treasury also accepted common stock in return for preferred shares obtained in December 2009, when Sterling received $303 million in federal money intended to strengthen its balance sheet.
With their registration Friday, the new common shares increased the number available for trading twelvefold.
More than 30 million shares changed hands Monday, compared with an average 433,000 shares before registration of the new stock.
The shares closed at 24 cents, down from 50 cents at the close Friday.
Sterling shareholders will vote on a reverse stock split at an annual meeting in December. Chief Financial Officer Dan Byrne said Sterling directors have not yet determined a ratio for the split, which will substantially reduce the number of outstanding shares.