First Marblehead Cracks

Shares plunge on the news of the Sallie Mae buyout.
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First Marblehead (FMD) plunged 25% Monday as investors worried that two big customers will pull their business, now that they're poised to take big stakes in rival Sallie Mae (SLM) - Get Report.

Shares of Sallie Mae jumped Monday after the Reston, Va., student lender said it had agreed to be purchased for $25 billion by a group led by private equity firm J.C. Flowers. Minority stakeholders in the buyout include

JPMorgan

(JPM) - Get Report

and

Bank of America

(BAC) - Get Report

-- two big customers of First Marblehead.

Worries about First Marblehead's relationship with JPMorgan and Bank of America have been the source of anxiety for First Marblehead investors for some time. When the company held its analyst meeting in February, CEO Jack Kopinsky said he believed First Marblehead's relationship with the banks was strong but recognized that "our responsibility is to really help them grow."

On Monday, First Marblehead plunged $10.96 to $33.47, while Sallie Mae surged $8.23 to $54.99.