Freddie Mac (NYSE: FRE) said today that it received a notice from the New York Stock Exchange (NYSE), warning that the mortgage firm could be delisted due to its rock-bottom share price. FRE has been trading below $1 for more than 30 days now, and must notify the exchange by December 2 whether it intends to rectify the problem.
If Freddie does decide to meet the NYSE's listing requirements, it will have until mid-May to address the share-price issue; if not, its common stock and preferred stock are subject to suspension and delisting. In a statement, Freddie Mac said it's "currently working with its conservator, the Federal Housing Finance Agency, to explore options relating to this deficiency and has not yet determined its response."
Earlier this week, Freddie's sister Fannie Mae (NYSE: FNM) received an identical warning from the NYSE. The troubled siblings hit the headlines for somewhat more respectable reasons earlier this morning, when the pair announced they would temporarily halt foreclosures during the holiday season.
After opening broadly higher this morning, FRE has fallen to a 6% loss at 46 cents per share. Sibling Fannie is faring better today; that stock is up roughly 9% at last check -- though today's gain takes the per-share price only as high as 36 cents.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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Reader Comments (Page 1 of 1)
11-21-2008 @ 2:33PM
BHarrison said...
Well, doesn't this and sitautions like Citi's and other corporations' further economic weakening clearly demonstrate that we are FAR from the economy "bottoming out"?
The quandary is that the government and corporations need to create a "positive attitude" to promote economic activity; but the reality of the uncontrollable downward economic spiral keeps undermining the baseless optimismic projections by government and the markets.
Why not have full disclosure of the economic conditions of the corporations, "take the hits" however they may arise, and get to the bottom of the market, so that the recovery can actually begin. Yeah, it is either a quick hard "adjustment, or a slow agonizing demise to get to the "bottom of it all". It is going to be brutal economically for millions of people; but the shorter the time frame, the less damage will be done to the majority of the people. Dragging it all out is just a slow strangulation of too many people.
None of it is going to be easy; why not just get it over with. We need to start by ousting the CORRUPT and INCOMPETENT CEOs . . . and then "clean house" in Congress.