Douglas A. McIntyre at 24/7 Wall Street rounds up a sobering list of big-name stocks that have fallen below $1 a share, plus a few that could be headed that way. His list, their recent prices, and their 52-week highs below.
- Thornburg Mortgage. (TMA) Current price: 26 cents. 52-week high: $140.50.
- Fannie Mae. (FNM) 83 cents. $40.45.
- Freddie Mac (FRE) 82 cents. $37.18.
- Sirius XM Radio (NASDAQ:SIRI) 18 cents. $3.94.
- Level 3 (NASDAQ:LVLT) 82 cents. $4.48.
- Charter Communications (NASDAQ:CHTR) 17 cents. $1.67.
Names that could still meet their break-the-buck fate? Ford (NYSE:F), Citigroup (NYSE:C), Sprint (NYSE:S), The New York Times (NYSE:NYT), and ETrade (EFTC) -- a list that would've looked like the top holdings of a pretty conservative mutual fund 18 months ago.
The common devastating thread in the businesses above is the credit crisis, either directly (exposure to risky mortgages) or indirectly (difficulty refinancing debt). As McIntyre says:
The lesson that Wall St. can take from this is that a prolonged lack of access to credit and an ongoing banking and housing crisis could take shares in a number of other very well-known companies into the pennies which will make them candidates for delisting and wild price swings from day traders moving in and out of the shares.
While credit markets have improved from the October panic, they're still showing signs of distress (see this 3-year chart of the TED spread) at the same time tighter lending could be spreading into the consumer sector. The worst could be over, but it's too soon to expect a turnaround.