Financial stocks suffered a furiously traded bloodbath Tuesday afternoon following
(FRE) announcement of an
Freddie shares tanked by more than 28%, and fellow mortgage investor Fannie Mae (FNM) by nearly 25%, after the former reported a loss of $2 billion, or $3.29 a share. That's nearly triple the amount of last year's loss, which panned out at $1.17 a share.
In light of its dire cash levels, Freddie also said it might cut its dividend in half next quarter and that it's considering "very near term capital raising alternatives" with help from Goldman Sachs (GS) and Lehman Brothers (LEH).
Freddie slid $10.76 to $26.74 as Fannie traded down $9.33 to $28.25.A Fox-Pitt analyst meanwhile argued that, if the foundering Freddie and Fannie can't purchase Countrywide's (CFC) loans, the mortgage lender's viability of remaining in business will be