IndyMac stock closer to zero; 'no value left for shareholders'

From Wall Street’s viewpoint, there’s virtually nothing left of IndyMac Bancorp now.

The stock plunged as low as 34 cents this morning and was trading around 40 cents at about 11 a.m. PDT, down from 71 cents on Monday. The price a year ago: $31.

After the close of trading on Monday the loss-ridden Pasadena-based thrift announced it would drastically shrink its business in a bid to survive.

But survival as a publicly traded company seems out of the question. Paul Miller, an analyst at Friedman, Billings, Ramsey & Co., said today the stock was headed for zero. "We do not believe that there is any value left for common shareholders," he said in a note to clients.

Just because shareholders have lost everything doesn’t mean the bank has to close. But it doesn’t help IndyMac’s situation.

What about the bank’s stock listing on the New York Stock Exchange? It’s a formality at this point: The shares have been suspended from trading on the NYSE floor since June 26, when they first closed below $1. Instead, they’re trading on the NYSE’s all-electronic ARCA market.

Under NYSE rules, the exchange can act to permanently delist a company once the average trading price of the firm’s shares over 30 days falls below $1.

An NYSE spokesman wouldn’t comment on IndyMac specifically, citing exchange policy.

Stocks in IndyMac’s price range normally end up in the over-the-counter market, where they’re of interest only to hard-core speculators and day traders.

Photo: Nick Ut / Associated Press

Comments

[Lou]

Note to banks: giving mortgages to people with bad credit, spotty job histories, and no assets with adjustable rates and negative amoritization might not be a a good idea.

In fact a child with developmental disorders could've figured that out.

[G. Montelongo (R.E. Broker)]

This is the worst financial tidal wave since the depression, it's knocking out real estate & mortgage companies out of existance....I should know...I am a casualty of this financial tidal wave, and it's just the beginning..

Face it...we are at "war" billions and billions of dollar are spent where not even US Govt. know where the funds are going to. Gas prices are out of control, the US gov't is borrowing money from China so that the US can pay the salaries for men/women in uniform.

Our deficit will be paid by our childrens, great.great...grand, grand, grand children...

[Walter L. Johnson]

I want to know whether or not Senator Schumer or his staff, friends and associates profited by selling short options (sold without owning any of the stock to bet the stock will decline in value) on IndyMac Bankcorp stock before the release of the letter that put the nail in IndyMac's coffin--assuring a run on the bank. Some credit New York Senator Schumer for the collapse for IndyMac when it was still savable, even though regulatory efforts were under way to shore up the capital base of IndyMac.

In the interest of responsible governing, I really feel that this mere possibility needs to be investigated thoroughly. If Martha Stewart can be punished for acting on insider information, so should lawmakers and their staff.

[martscan]

Walter L. Johnson:

Martha Stewart was NOT punished for acting on insider information. Martha Stewart was punished for lying.

Anyone anticipating a decline in a stock price would NOT be "selling short options." Options traders would BUY put options, giving them the right to buy back a stock at or beyond a predetermined price for a specified period of time. Short sellers would simply sell short and pay interest on the broker's loan, if applicable.

If any 'crime' was committed it was Schumer's failure to get on the a$$es of the regulators a year ago. They did not do their job.

In the interest of responsible intelligence, forget the investigation.