NYSE warns Fannie Mae it may delist its stock

Fannie Mae on Tuesday said it received notice from the New York Stock Exchange that its stock failed to satisfy price-related requirements, and may lose its listing on the exchange.

In a regulatory filing, Fannie Mae said the notice arrived Wednesday. The NYSE requires that the average closing price of a stock remain above $1 per share. Fannie Mae stock, which a year ago was trading as high as $40.45, closed at 47 cents Tuesday.

Fannie Mae said it is working with its conservator, the Federal Housing Finance Agency, to explore options to boost the share price, but has not yet determined its response or any specific actions it will take.

If Fannie Mae notifies the NYSE of plans to boost the price, it has six months from the Nov. 12 date of the notification to bring the stock above $1 for 30 consecutive trading days and remain listed.

The mortgage finance company, which was seized by federal regulators in September amid the subprime mortgage meltdown, last week posted a $29 billion loss for the third quarter and warned that its $100 billion lifeline from the government may not be sufficient for its solvency should it continue to lose money.

Fannie Mae has about 1.08 billion shares outstanding.

Well this is just great how are they going to boost the price? no one wants to buy it especially after this announcement....wow 1.08 billion shares that's a lot of people who are gonna lose money ... i bet the stockholders are callin up their brokers and are like SELLL NOWW haha .... this isn't looking good nice to see our government can help out companies and that they're ways of a bail out work, NOT!

reply to post by baseball101


They will do a Reverse Stock Split.

Most Reverse Splits end up loosing more value then what the stock traded at before the reverse split.

hot diggidy damn

1+ billion in outstanding shares, that's a helluva lot of cash and unhappy investors...

With the US Gov't holding a 79.9% ownership stake in Fannie via common stock, how much of a loss would we be looking at with a reverse split?

Hmmm...just add that to the tab, I guess.

Nothing to make a fret about happens to a lot of companies. They will just combine the stocks until each stock is over a dollar.

-Ign0ranT

Originally posted by anachryon
With the US Gov't holding a 79.9% ownership stake in Fannie via common stock, how much of a loss would we be looking at with a reverse split?

Hmmm...just add that to the tab, I guess.

Gov would be unaffected for two reasons.

1. If the reverse split occurs it does not devalue the amount held. If you own two share for $1 each, and a 1 for 2 split occurs, you have one share worth $2 .. same value, different numbers.

It's to entice investors. Usually it means that more people will sell.. very unusual for a Reverse Split to actually work like it's intended.

2. The US Government never purchased Common Stock, they purchased Preferred Stock with an annual yield of 10%. Preferred Stock is uneffected by splits, of any kind.