If you have a weak stomach, you may not want to look at First Marblehead's (NYSE: FMD) stock chart -- the company's stock is down about 90% from a year ago. The private student loan company has not fared well amid the credit crisis, and its loan guarantor filed for bankruptcy a few weeks ago.

Yet not all investors are jumping ship from this company. Earlier this month on our Inside Value First Marblehead discussion board (free trial or subscription required), aitraders listed seven reasons to hold this company:  

  1. There is still value in the residuals. Changing, debatable, perhaps eventually even worthless, but until 'eventually' becomes 'is', I am committed to this investment as long as the FMD officers still have a job.
  2. FMD has 35% insider ownership.
  3. Goldman Sachs (NYSE: GS) has committed to investing a bunch of money centered around the theory of an $11-$15 per share value. Stupid? maybe. But a done deal just the same.
  4. Despite all of the news, we have heard practically nothing from the FMD officers about the current situation. They are playing their cards close to the vest. IMO, trying to prevent irrational overreaction to their next moves while they themselves decide what those may be.
  5. The market is thinning out. If FMD should survive, there will be fewer players. I like their solitary commitment to student lending in contrast to University Systems, other Investors, that move on to find better value elsewhere. They, like SLM (NYSE: SLM), have a solitary objective, and that is to succeed in the student lending market. And one thing is very clear to me-private lending for student loans will continue to be necessary, whether FMD does it or a new structure emerges.
  6. It still doesn't appear that banks want to keep these types of loans on their balance sheets and it appears that the business, or art, of securitisations in general is not dead, it is just going through a structural reevaluation and readjustment.
  7. Lastly, but most importantly, I am well diversified thanks to other TMF Inside Value recommendations and this is not the biggest position in my portfolio. I do not need this money in the next 36 months and can afford to be patient, even take the loss as much as it may hurt. ...

Aitraders continues:

FMD is an opportunity to deepen one's understanding of the student loan market (due diligence) and come to one's own conclusion if there is still value in this play. No one else can recommend or [dissuade] from this investment now -- as mentioned above, almost all are now on the sidelines waiting for the next conference call.

Or one can simply move on to greener pastures.

But until the next FMD conference call, and without another guarantor for the securities, all values are exercises in theoretical evaluations and not practical for further investing purposes.

Welcome to the twilight zone. That's my proverbial 2 cents and is only one investor's opinion. I hope this has helped you get a better picture.

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aitraders is not an employee of The Motley Fool, and his opinion does not necessarily reflect that of the Fool.

Online editor Katrina Chan does not own shares in any companies mentioned. First Marblehead is a former Motley Fool Hidden Gems recommendation. The Motley Fool has a disclosure policy that's suitable for Iron Man.