Fannie, Freddie Shares Moved Off NYSE Floor Trading
Wednesday, September 17, 2008
The New York Stock Exchange (NYSE) announced last Thursday that trading of Fannie Mae (FNM) and Freddie Mac (FRE) has been moved off the exchange floor. Following the government's takeover of the two companies last weekend, market capitalizations of both stocks fell below $800 million, as shareholders of the government-sponsored enterprises (GSEs) began a sell frenzy.
Traditionally, once a stock falls below $1.05, it is moved to the electronic platform, such as NYSE Arca, and can only return to the exchange after being traded above $1.10 for an entire day, a report on the Dow Jones Newswire explained. Although both companies fell below that mark early last week, the exchange said it expected heavy trading volume to come about and therefore decided not to relocate trading of their shares. That exemption was lifted on Thursday, however, with Fannie dropping to 73 cents and Freddie trading at 63 cents.
"Effective immediately, consistent with the guidelines under the NYSE Sub-penny Trading Rule, orders in Fannie Mae and Freddie Mac common will be routed to NYSE Arca with NYSE Arca pricing applied," the exchange said in a statement on Thursday. Both companies, common and preferred shares, will continue to be listed on the New York Stock Exchange, the NYSE added.
Both companies are continuing on a downward spiral. As of early this afternoon, Fannie Mae shares had fallen to 62 cents; Freddie Mac's stock had dipped to 40 cents per share.
Traditionally, once a stock falls below $1.05, it is moved to the electronic platform, such as NYSE Arca, and can only return to the exchange after being traded above $1.10 for an entire day, a report on the Dow Jones Newswire explained. Although both companies fell below that mark early last week, the exchange said it expected heavy trading volume to come about and therefore decided not to relocate trading of their shares. That exemption was lifted on Thursday, however, with Fannie dropping to 73 cents and Freddie trading at 63 cents.
"Effective immediately, consistent with the guidelines under the NYSE Sub-penny Trading Rule, orders in Fannie Mae and Freddie Mac common will be routed to NYSE Arca with NYSE Arca pricing applied," the exchange said in a statement on Thursday. Both companies, common and preferred shares, will continue to be listed on the New York Stock Exchange, the NYSE added.
Both companies are continuing on a downward spiral. As of early this afternoon, Fannie Mae shares had fallen to 62 cents; Freddie Mac's stock had dipped to 40 cents per share.
