Rithm Capital resolves board litigation and updates equity offering programs

Rithm Capital Corp. (NYSE:RITM), a financial services company with a market capitalization of $6.39 billion and an impressive year-to-date return of 16.31%, reported several corporate updates Friday in a filing with the Securities and Exchange Commission.

The company disclosed that on July 30, the Delaware Court of Chancery entered a stipulation and order closing a legal case brought by a stockholder, Arthur Adler, against Rithm Capital and its board of directors. The complaint, filed in July 2024, alleged the board’s structure did not comply with the company’s certificate of incorporation regarding the division of directors into classes. Rithm Capital and its board denied the allegations and moved to dismiss the case in August 2024.

After a director resignation and the election of two new directors in November 2024, the parties agreed the changes rendered the claims moot. The court dismissed the case as moot in December 2024 but retained jurisdiction to address attorneys’ fees. Without admitting any wrongdoing, Rithm Capital agreed to pay $160,000 in attorneys’ fees and expenses to the plaintiff’s counsel to resolve all related claims. The court did not review or rule on the amount of fees paid.

Separately, Rithm Capital announced the filing of a prospectus supplement with the SEC to register 14,423,655 shares of its common stock for issuance under its Nonqualified Stock Option and Incentive Award Plan. The company will receive proceeds from the exercise or purchase of stock-based awards under the plan if exercised or purchased for cash. No proceeds will be received if awards are exercised on a cashless basis. The company, which currently trades at an attractive P/E ratio of 9.15, has maintained consistent dividend payments with a current yield of 8.3%. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the Pro Research Report.

Rithm Capital also amended its at-the-market (ATM) equity offering program, maintaining the ability to sell up to $500 million of common stock through several financial institutions, with $303.8 million remaining available for sale. The ATM shares will be offered and sold pursuant to the company’s registration statement on file with the SEC.

These disclosures are based on statements made in the company’s SEC filing.

In other recent news, Rithm Capital Corp reported its second-quarter earnings for 2025, exceeding earnings per share (EPS) expectations with a reported EPS of $0.54, compared to the anticipated $0.51. This represents a positive surprise of 5.88%. However, the company’s revenue fell short, coming in at $925.63 million against the forecasted $1.21 billion, marking a significant shortfall of 23.5%. Despite the revenue miss, the company saw positive investor sentiment reflected in a rise in stock value.

In related developments, Keefe, Bruyette & Woods raised its price target for Rithm Capital to $14 from $13.50, maintaining an Outperform rating. The investment firm attributed this adjustment to an increase in book value during the second quarter. KBW’s price target is based on a multiple of 1.1 times the GAAP book value of $12.71 and approximately 1.2 times the tangible book value. These recent developments provide investors with insights into the company’s financial performance and market expectations.

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