Fannie Mae Gets NYSE Delisting Notice
WASHINGTON --
Fannie Mae
(FNM)
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 along with fellow government-sponsored entity
Freddie Mac
(FRE)
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.
Shareholders of Fannie and Freddie were wiped out in the government seizure, including major banks like
JPMorgan Chase
(JPM) - Get Report
and
Wells Fargo
(WFC) - Get Report
as well as smaller banks and thrifts like
Sovereign
(SOV)
and
Westamerica
(ABC) - Get Report
which owned common and preferred shares in the two mortgage giants and were forced to write off billions of dollars worth of stock.
The government's next move will be to determine the next step for
. They could be converted into government agencies; continue as publicly held companies with restrictions to try and prevent another disaster; or be split along business lines, with the pieces sold off as new, private companies with no government backing.
Federal Reserve
Chairman Ben Bernanke last month said some form of federal backing of the two companies would probably be necessary.
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