Shares of Indymac took a huge hit Tuesday after Friedman, Billings, and Ramsey analyst Paul Miller (the same guy that went after Countrywide) expressed doubt over the company’s stability.
He estimated that the company only has a capital cushion of just $107 million, but may face losses of $200 million between now and December.
Additionally, he cut his price target to just $1 a share from $3, and said year-end book value would dip beneath $4.50.
Yesterday, Indymac released first quarter earnings, posting a hefty loss of $184.2 million, or $2.27 a share.
CEO Mike Perry also projected that the Pasadena, CA-based home loan lender wouldn’t be profitable until home prices stop falling, and certainly not in 2008.
There has been plenty of speculation surrounding Indymac in recent months, with many curious how they’ve managed to keep chugging along when most, if not all, of their rivals continue to resort to drastic measures to stay afloat.
Bankruptcy rumors were swirling in Pasadena a few months back, and uncertainty still remains, especially with the stock in such a weak position.
Indymac was trading down 66 cents, or 21.57%, to $2.40 in afternoon trading on Wall Street after falling as low as $2.15.
The stock has fallen close to 95 percent over the last 52 weeks and to add insult to injury, Under Armour is replacing Indymac in the S&P 400 index.