Fannie, Freddie avoid NYSE delisting after stocks soar

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Speculators went wild for shares of Fannie Mae and Freddie Mac in August. And thanks to that buying frenzy, the two government-controlled mortgage giants will avoid getting booted off the New York Stock Exchange.

The companies separately said today that the NYSE had informed them that they were back in compliance with minimum share price requirements after their stocks rocketed last month.

Fannie Mae shares jumped from 58 cents at the end of July to $2.04 by Aug. 28; Freddie Mac soared from 62 cents to $2.40 in the same period.

Both stocks sold off earlier this week but are trading higher today, with Fannie up 12 cents to $1.76 and Freddie up 7 cents to $1.94 at about 11:50 a.m. PDT.

The NYSE last November warned both companies that their stocks were in danger of being delisted because they had fallen under $1. The shares had collapsed after the government seized the companies last September, saying they were on the brink of failing.

In February, however, the NYSE suspended its $1 minimum stock price requirement for all listed companies in an effort to give stocks time to recover from the fall and winter market meltdowns. The NYSE put the rule back into effect on Aug. 1, which gave Fannie and Freddie until mid-October to ‘cure’ their penny-stock problems.

With their shares now well above $1, the two companies won’t have to worry about the October deadline.

Does the government have an interest in keeping the stocks on the NYSE? Probably. Even though the shares may ultimately be worthless (the Treasury already has 80% ownership of both firms), an NYSE listing provides more flexibility for the Obama administration as it works on a plan for the future structure of the companies.

It also would seem to be in the interest of the many remaining institutional investors in Fannie and Freddie for the stocks to stay on the NYSE.

So maybe it wasn’t just rank speculators driving the stocks higher last month.

Conspiracy theorists, have at it.

-- Tom Petruno