I was reading an article about Countrywide Financial Corp and it mentioned how rumors of the company reportedly going bankrupt led to its shares dropping a significant amount (28%)!!! The rumors were denied by the company stating any rumors of bankruptcy were very untrue and no such substance to back up those rumors. In the 3rd quarter Countrywide reported a loss of $1.2 billion and sees them turning a profit in the 4th quarter (highly unlikely)!!! A couple of questions popped in my head.
Knowing these little facts, from an investors point of view how will this affect doing “business” with Countrywide? Is this something that we should be worried about, if investors are working a short sale with C.W. or should we look forward in hearing news like this? And with a big company like C.W. doing so bad does this mean that smaller companies may follow in their footsteps with any changes they make in providing loans or simply adjusting their existing loans already out there? I was wondering what others thought of this and if they heard the same news what they thought when they read or heard about it.