CEO Watch First Marblehead Replaces CEO
The student finance firm First Marblehead Corp. saw its stock skyrocket Monday after it completed an investment with Goldman Sachs Group and announced that Daniel Myers, the company's co-founder and former chief executive, would return to the CEO post.
A $132 million investment from Goldman Sachs saw First Marblehead shares rise 71 percent in trading, the company's highest jump in five years.
Meyers, who co-founded the Boston-based student loan company in 1992, will replace Jack Kopnisky as chief executive on September 1. Meyers stepped down from First Marblehead in 2005 after the company learned he spend $32,000 of his own money on lavish gifts for an executive at Bank of America, according to the Boston Globe.
But yesterday, the board welcomed Meyers back as the ideal CEO to guide First Marblehead through the capital markets crisis that resulted in 500 layoffs at the firm in May.
"We believe there is no better person now to lead First Marblehead than our cofounder Dan Meyers," said lead director William Berkley, according to the Globe.
Goldman's private equity unit, GS Capital Partners, invested the $132 million yesterday, which is in addition to $59.9 million Goldman invested in First Marblehead in December. With the investment, GS Capital Partners owns a little over 13 percent of First Marblehead.
Despite the one-day spike in First Marblehead stock, shares have fallen 66 percent this year due to reduced demand for the firm's securities backed by student loans, according to Bloomberg News. The firm reported a fiscal fourth-quarter loss of roughly $57 million this year, compared to a $78 million gain during the fourth quarter of 2007.
