caseism

NovaStar Financial: Short Sellers Battle Case Solution & Answer

The NovaStar case described the difficulties encountered by the short seller hedge fund Rocker Partners Marc Cohodes, trying to explain what he thought was a massive fraud mortgage lender NovaStar Financial. The case is in the period 2001-2007 and monitoring of the growth of industry and the subprime collapse leading to the financial crisis. The case describes the business model of NovaStar, a leading subprime mortgage, and accounting practices with a focus on the risks and opportunities facing the business key. The case, students must take the role of Marc Cohodes numbers and understand the business model and accounting to identify whether financial performance is a good representation of the true economic performance. In particular, students learn the accounting concepts related to securitization gains on sale of accounts, valuation of securities available for sale, and analysis of the cash flow statement. The case also allows students to understand the role and motivations of the various players in the capital market as sales analysts, media, auditors and the Securities and Exchange Commission (SEC).
by
Suraj Srinivasan,
Amy Kaser
Source: Harvard Business School
27 pages.
Date Posted: March 13, 2013. Prod #: 113120-PDF-ENG
NovaStar Financial case battle of a solution of a short seller

Share This

LOOK FOR A FREE CASE STUDY SOLUTION

JUST REGISTER NOW AND GET 50% OFF ON EACH CASE STUDY