Fannie Mae and Freddie Mac announced that they are delisting from the New York Stock Exchange. They are unable to meet the minimum requirements of $1.00 per share for a 30 day price average. This is voluntary and will take effect in early July.
The Wall Street Journal reported:
The companies' share prices plummeted on the morning announcement; Fannie's and Freddie's stock closed down nearly 40% to 56 cents and 76 cents, respectively, in Wednesday trading. Meanwhile, the roughly three dozen publicly-traded preferred securities issued by Fannie and Freddie were punished nearly as severely, posting declines of 14% to 46% in Wednesday afternoon trading.
Fannie's and Freddie's shares have limped along since the federal government seized them. The U.S. Treasury acquired ownership of 80% of each company's common stock and agreed to pump in capital as needed to keep the companies solvent. The government has so far injected $145 billion and losses at the company continue to mount. In exchange for the capital, the federal government has received preferred shares in the same amount carrying a 10% coupon.
The American people just got screwed again. This is what happens when the federal government dictates to companies who they should do business with. Now, the world is in a quandary because the federal government implicitly guaranteed bad loans. This nightmare is just beginning.
Source: http://online.wsj.com/article/BT-CO-20100616-712880.html?mod=WSJ_latestheadlines
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