Shares of Fannie Mae (FNM) dropped more than 4 percent Wednesday after the mortgage finance company under investigation for massive accounting problems said a multibillion-dollar profit restatement would not be completed before the second half of 2006.

The company, in a Tuesday evening filing with regulators and then on a call with investors on Wednesday, said its failure to file timely financial reports could lead the New York Stock Exchange (search) to delist its stock.

"We understand the significance of this issue," Chief Executive Officer Daniel Mudd told investors.

Mudd said Fannie Mae was in discussions with stock exchange officials about is continued listing amid the restatement process.

What's more, Fannie Mae said the restatement process was not only lengthy but expensive, and would cost more than $420 million in 2005.

"In the individual items, I don't think the development today has been necessarily eye-popping but in totality people feel things are not moving along as quickly as they had hoped for," said Matthew Park, analyst at A.G. Edwards & Sons.

Shares of Fannie Mae fell $2.44, or 4.43 percent, to $52.38.

Mudd also said Fannie Mae was close to filling the chief financial and chief risk officer jobs. But he would not say when the company might make those announcements.

"I can't provide you with timeline today but I can tell you today that we're getting close to filling out our remaining positions," Mudd said.

Fannie Mae has been rebuilding its management team for months after regulators uncovered massive accounting problems last year that led to the ouster of top officials.

Mudd also told investors the company was "quite comfortable" with where its capital levels were tracking versus a plan agreed with its regulator that requires Fannie Mae to hit a specified target by Sept. 30.