Fannie Mae is taking on yet another threat to its continued survival.  In a filing with the U.S. Securities and Exchange Commission (SEC) last Wednesday, the corporation announced its intention to work with the New York Stock Exchange (NYSE) to bring the price of its common stock above $1.00 for 30 consecutive trading days no later than May 11, 2009.

NYSE rules specify that the exchange can begin delisting procedures for any stock where the average closing stock price remains under $1.00 for 30 days.   Under these rules Fannie has until the May 11 date to correct the deficiency.  Until that date the company's common stock and listed preferred stocks will continue to trade on the Exchange but ".BC" will be tagged on to the end of the stock's traditional trading symbol "FNM" to indicate that the company is not in compliance with NYSE listing standards.

Fannie Mae which was placed under conservatorship by the Treasury Department last summer says that it is currently working with its conservator, the Federal Housing Finance Agency (FHFA) to determine what action will be taken to get the stock price back up over the $1.00 mark.  One option that is open to it is a reverse stock split in which the company would reduce the number of outstanding common stock shares to a level which would force the price above $1.00.  In other words, in a 3:2 split an investor with 300 shares would surrender those shares and receive in return 200 shares of the new stock.  This would theoretically boost the price of the new shares 33-1/2 percent over the price of the old shares.

Fannie Mae stock had closed below $1.00 every day since October 16 and on November 26, the day of the announced filing with the SEC, it closed at $0.71.  However, on the next trading day, November 28, it closed at $1.16 and was trading mid-morning on Monday at $1.08.