Magazine article American Banker

AppOnline Goes Its Own Way in Web Divorce Plan

Magazine article American Banker

AppOnline Goes Its Own Way in Web Divorce Plan

Article excerpt

Bucking the growing "bricks and clicks" trend in the mortgage industry, Inc. of Melville, N.Y., has announced plans to separate its branch and Internet operations in two companies.

The lender said it would spin off its Internet operation into a newly formed company through an initial public offering this summer. The remaining AppOnline operation, Island Mortgage, which has 58 offices in 22 states and focuses on FHA, VA, and subprime loans, is to be given a name that reflects its low-tech approach.

The new Internet company, AppOnline, is to be independent, with its own board of directors and officers, and Apponline shareholders are to own a majority of the venture.

"My shareholders will now have two public companies instead of one," said Edward Capuano, chief executive officer of AppOnline. "I can unlock the value of the online business. It's a better deal for the stockholders." AppOnline, whose stock price wallowed below $5 for most of last year, was trading between $3 and $4 this week.

AppOnline this week announced a deal for Cyber Media Group, which it plans to spin off in ApplyOnline. Cyber Media owns Mortgage, an aggregate Web site where many lenders offer loans, which is to be a large component of ApplyOnline. "This acquisition puts the whole package together," Mr. Capuano said. "It's like having your own LendingTree."

The IPO is designed to take advantage of the high value investors have placed on technology companies, pushing many of them to stratospheric market values. …

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