FRE and FNM, who are buying them?

[Bolimomo]

I have a couple of very stupid questions:

FRE (Freddie Mac) and FNM (Fannie Mae). Their stocks are still trading at $0.66 per share. Volume is still 7 million shares or something daily.

It takes two to transact. Who would be buying FRE/FNM under the circumstances? What do you think they aim to gain? The stock to go back up to $60 someday? Is it possible?

Also, why has NYSE not de-listed FRE and FNM citing their "high standard" for listing requirements? Shouldn't they be in the "less prestigeous" Nasdaq or even pinksheet by now?

[useless]

You know, its been awhile since I have thought about these...Or heard about them on the news. ( I dont watch much news, so very possible I am out of touch )

Are they even really companies anymore? Good question though, be interesting to see anyone can hazard a guess. Wouldn't touch these things with a 10 ft pole.

[XOM]

Same reason that the sub $10 stocks are still on the Dow probably.

[Scooby2clutch]

I have a couple of very stupid questions:

FRE (Freddie Mac) and FNM (Fannie Mae). Their stocks are still trading at $0.66 per share. Volume is still 7 million shares or something daily.

It takes two to transact. Who would be buying FRE/FNM under the circumstances? What do you think they aim to gain? The stock to go back up to $60 someday? Is it possible?

Also, why has NYSE not de-listed FRE and FNM citing their "high standard" for listing requirements? Shouldn't they be in the "less prestigeous" Nasdaq or even pinksheet by now?


Wouldn't a Government announcement shoot these companies pretty high if they got more fundings? Are there more horrible news for real estate on the horizon? everybody knows the subprimed flopped already.

[eaglearb]

don't buy them, arb them, better risk-reward profile....

[Bolimomo]

don't buy them, arb them, better risk-reward profile....
How would you do that? Would you enlighten us? :-)

[Bolimomo]

Also, why has NYSE not de-listed FRE and FNM citing their "high standard" for listing requirements? Shouldn't they be in the "less prestigeous" Nasdaq or even pinksheet by now?

6 months into it... still there...

Quote:

History of the New York Stock Exchange
The New York Stock Exchange has relaxed its listing requirements for companies whose shares have dropped below $1 for 30 consecutive days. Those companies have now been granted a four-month reprieve. NYSE has also extended its lowered minimum market value requirement into June 30, 2009. Capitalization requirement was reduced in January from $25 million to $15 million. "We think everyone is better served by having more time to kind of ride this out and see how this plays out," said Glenn Tyranski, senior vice president of financial compliance at the exchange. Over 50 companies whose stocks trade on the NYSE are currently trading below $1 per share. Same time last year, the exchange delisted 34 companies for low share prices or for market capitalization that was below standards.

End-quote.

http://www.millennium-traders.com/news/marketcommentaryfebruary2709.aspx

[firefighterwebguy]

6 months into it... still there...

Quote:

History of the New York Stock Exchange
The New York Stock Exchange has relaxed its listing requirements for companies whose shares have dropped below $1 for 30 consecutive days. Those companies have now been granted a four-month reprieve. NYSE has also extended its lowered minimum market value requirement into June 30, 2009. Capitalization requirement was reduced in January from $25 million to $15 million. "We think everyone is better served by having more time to kind of ride this out and see how this plays out," said Glenn Tyranski, senior vice president of financial compliance at the exchange. Over 50 companies whose stocks trade on the NYSE are currently trading below $1 per share. Same time last year, the exchange delisted 34 companies for low share prices or for market capitalization that was below standards.

End-quote.

http://www.millennium-traders.com/news/marketcommentaryfebruary2709.aspx


Great research B. These companies spoken of who are trading under $1, are they likely to rebound to above $1 or assume a reverse split or die out? Whats the best way to tell? I realize FRE/FNM are DOA right now, but I would imagine since most of our morgages are somehow interlaced with FRE/FMN backing, they should come to life eventually. Right?

[Bolimomo]

I have no problem with NYSE delisting a company or keeping a company there forever. One way or the other. Frankly I don't give a damn! I just want to see those stuck-up NYSE guys to get down from their high horses and not pretending they are the most prestigious financial organization in the world but arbitrarily pick and choose who to delist.

[MoreYummy]

where will these de-listed stocks go? OTC?

[Bolimomo]

where will these de-listed stocks go? OTC?
It depends on the situation.

Some maybe flat out bankruptcy. Then the company will cease its operation and will be dissolved. Some may return to be a privately owned entity.

It may or may not go to OTC (I assume you meant the Nasdaq market). Because Nasdaq has its listing requirements too that these troubled companies may not be able to meet.

There is a OTCBB (Bulletin Board), aka "pinksheet" where many penny stocks are traded. It is a different part of Nasdaq where the penny stocks go (Nasdaq has its name to protect too :-) ). But you can trade them if your broker allows you.