In early pre-market trade, Fannie was down a penny at $0.93 while Freddie was flat at $1.15.
When we posted "Frank to Recommend Replacing Fannie Mae, Freddie Mac (FNM; FRE)" last Friday the teaser we copied out from the Bloomberg story was their first draft. They went through four updates which is something they won't spend time doing unless a story is important.
The Bloomberg writers moved this bit to the third paragraph (our emphasis):
...Frank said Congress also needs to figure out what to do with the remaining shareholders in Fannie Mae and Freddie Mac as well as investors in the companies’ $5.4 trillion in mortgage bonds and $1.7 trillion in unsecured corporate debt.“That will be one of the things we will be talking about,” Frank told reporters after the hearing.
“The stockholders were of course already pretty much beaten up.”
My rather sharp-tongued grandmother used to say, "A remarkable grasp of the obvious".
Fannie traded over $70 as recently as August, 2007.
As I said in "Nightly Business Report: "The President's Plan for Fannie Mae & Freddie Mac" (FNM; FRE)":
...Although I don't have any inside information on this, my best guess is that current common shareholders will get wiped out with maybe some warrents or an equity stub as a bone to this rather powerless constituency....