Sallie Mae Tumbles After Testy Conference Call
Shares of Sallie Mae plunged Wednesday after the chief executive said in a contentious conference call that the student lender would consider cutting its dividend next year to shore up its finances amid rising loan defaults and dwindling government subsidies.
The company slashed its 2008 profit forecast last week in the wake of a failed $25 billion buyout.
Sallie Mae fell to a new 52-week low and more than 50 percent below the $60-per-share offer made in April by the investor group led by led by private-equity firm J.C. Flowers.
Chairman and CEO Albert L. Lord, taking questions from investors in a conference call seemed at times agitated as he tried to reassure investors about the company's future. He also said the company would consider buying out smaller players in the student lending industry.
Lord grew testy after being challenged by analysts to detail the company's status.
"You should give (Chief Financial Officer) Steve a call," Lord told an analyst.
"But you're the CEO. You're the guy who just took over the company," the analyst responded.
"Yes, that's exactly right. I'm the CEO. You should give Steve a call. Next question."
Later, Lord says, "Steve, let's go. There's no questions, let's get the (expletive) out of here."
Then, he warns analysts: "And so when I stand before you in January, I will be prepared to take all your questions and I would suggest maybe you get there early because I can assure, you will be going through a metal detector."