Freddie Shares Tumble on Loss, Dividend Cut

"The only thing that does appear certain is that investors will seek additional guarantees from Freddie Mac in connection with investing in any future capital raising efforts," O'Haire says.

Some wondered why the company would pay any dividend at all while its capital levels are in danger of being depleted and the market's appetite for new stock is questionable.

"Almost no prudently run private firm would pay out needed funds while losing money at this rate," San Diego State University finance professor Dan Seiver says in an email message. He cynically notes that despite Freddie's "whopping loss," it can "can borrow taxpayer money, get [its] liabilities guaranteed by the taxpayers, and still turn around and pay some of it out to [its] shareholders."

Syron had come under fire on Tuesday, after The New York Times reported he had ignored warnings signs that the company was taking on too much risk as early as 2004. In a lengthy, blistering response, Freddie questioned whether Syron had ever seen the memo in question, noted the story's main source left the company "involuntarily" and attributed other anonymous charges made to a "well-worn band of ideologues and self-interested detractors who have opposed the GSE model for years."

Still, after the accounting scandal of 2003 and now that the housing market crisis has revealed that government backing doesn't necessarily equate to a buoy for stock prices, Aite analyst John Jay wonders what equity investors are holding out for.

"I don't know why equity investors were so forgiving," says Jay. "It's not like one quarter, two quarters -- this is going on a decade and it's just getting lazy that Uncle Sam was going to be there."