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This got me thinking... could the conservators arbitrarily decide that the country needs that equity more than the twins and just repeal the earlier decision to stop the sweep, and instantly sweep all their net worth back into the treasury? That big chunk of cash could be pretty tempting...
That's the plan.
I have been away from this board for a while, but not surprisingly the price action brought me back.
I'm trying to read back and find the news triggering this move, but have failed so far. Is this trading on actual news, or has this become a meme stock?
Thanks
I've been off this board a while, but wasn't it along who talked down the price, then when he was short, he had his "brother" pump it so he could dump it? Seems backward this time.
I'm pretty sure there are a few assets left that didn't go in the sale. I'm hoping a few pennies or even dimes might come along, so I'm not selling yet. I can't find any documented information about what they might be, unfortunately.
Nice gain in FRCIL preferred shares today!
Does anyone know if shareholders (common or preferred) stand to benefit from the employee suit filled against FDIC yesterday?
Getting closer to my $.5 by Friday predictions. I start buying back at $.45
$.5 by Friday!!!!
I took a little off at .90. Also sold some at .75. I figured if it goes up I make more and if it goes down I can lower my basis.
Win-win.
What did Jamie Dimon say about FRCB? I'm only seeing comments about JPM.
Wow, did JPM buy the assets of FRCB for a huge profit! I wish some of that went to FRCB shareholders.
When you say none that you know of, are you saying they have no assets or that they have not published a balance sheet or asset list?
I'm trying to figure out exactly what assets and liabilities the entity associated with this stock has. I never thought there would be much for common shareholders, especially after liabilities and preferred shares got paid.
Is there a current asset list or balance sheet for FRCB?
I see the price creeping up a few pennies. When they sold the assets it seemed like there was quite a bit more cash coming in than all of the debt of the company combined. It seemed like there may be a buck or two a share available for common shareholders.
Does anyone else have better numbers on what assets may be left over after everyone is paid?
Not confident enough yet to buy for a nickel, but that might be a great deal.
Wash sales are a pain to track with all the price adjusting so I try to avoid them, but so far selling fannie in even months and freddie on odd months seems to not trigger them.
I have heard conflicting answers as to whether I am allowed to take a loss on Fannie right after buying Freddie and vice versa. I know they are essentially identical stocks, but technically they are completely separate companies.
Answer my own question.
Successor in interest apparently has a different meaning in law than it does in English.
Now if I could just figure out why common Fannie shareholders are not included... more reading.
Can_you buy new shares and_be_in the class-action suit?
This may have already been discussed - but the notice says members of the class are:
All current holders of common stock in Freddie Mac as of the date of certification, or their successors in interest to the extent shares are sold after the date of certification and before any final judgment or settlement
This wording makes it sound like if someone sells you shares - they lose class status but the class status transfers to the new owner as successor in interest.
Just curious - might give me more flexibility in day trading this stock or to load up later.
I didn't get any letters about any class actions and I have 100,000 shares combined of common and juniors over two different Schwab accounts. I bought some before 2008 and at various other times up to last week... so I should be a member of at least ONE class.
But - people have been telling me the mail is slow again.
I've been off this board since last summer's decision by The Supremes rendered my investment worthless. I only got back on here out of curiosity about why my juniors were going up and I didn't see any news.
I'm not sure this is a real thing either.
Oh we are playing that game?
I mean F&F should be allowed to redeem some senior preferred stock shares each quarter using quarterly profits.
We need suit to allow repayment.
It's insane that F&F are not allowed to repay their debt. I think a simple suit to force FHFA to allow them to use quarterly income to repay debt would get this whole problem solved in less than 10 years from now.
Maybe Trump and friends buying out the float. Then executive order overnight giving windfall to shareholders. Then Trump pardons himself and friends for stock manipulation. That would explain the last minute pop.
Technically they are allowed to borrow the money to pay for the sweep. The sweep has not ended, it's just being taken in the form of liquidation preference, not cash. Since the seniors are not counted to determine liquidity of the companies it appears to increase their net worth, however their net worth remains at zero and will remain at zero until the agreement is amended again, or until the supreme court demands it.
This is the end for common and Junior preferred. By the time F&F are ready to be released the accumulated liquidation preference will total nearly $500 billion. At that point the NWS is replaced by a 10% interest payment on that $500B which is $50B per year. They don’t make that much money so they can NEVER exit conservancy. Today’s agreement is a full taking of these companies in perpetuity. Stocks are now technically worth zero.
The only hope is the Supreme Court. If they affirm the 5th court the NWS is over and liquidation preference is zero.
The other good news is that this constitutes a new taking, and the court cases can start all over again. By 2028 we may find there actually is some value in the F&F common and preferred shares. So maybe not going to zero tomorrow?
The US government cannot own shares in a private company. That's why they get warrants, not shares. Warrants the US got for other companies were sold prior to exercise. It is not clear whether an "Exercise and Sell" trade would be legal since there may be a millisecond while the government owned the shares, but exercising and holding is clearly illegal.
The F&F warrants specifically allow the government to sell them - that's how they would do it. They would sell them for the current price of shares minus the exercise price which is basically zero. They might sell at a discount if they want to reward some potential buyer. They might even sell them to fannie and freddie for just the option price if they felt like it.
Sometimes selling warrants to the parent company is part of the recapitalization plan. The companies can then sell those shares on the open market to raise cash instead of doing a secondary IPO. They did that with AIG as I recall.
The government could BUY a company, but then they can't have any publicly traded shares. I think the gov't actually took ownership of Chrysler for a while.
End of year impacts many things.
If you have long term capital gains in fannie and freddie, you might want to take those gains this year while tax rates are still low. If you have losses in fannie and freddie you may want to take those losses this year, or save them for next year when losses are more valueable. Their fiscal year ends Dec 31, so FHFA might want to have a change on the books prior to the end of the fiscal year. So much happens on Dec 31. Previous modifications were squeezed in before the end of the year.
Or everyone at FHFA has taken the week off and Mnuchin is working to complete emptying a case of Brandy.
I suggest people relax. The supreme court said the fannie and freddie case we really care about would be decided during the 2020-2021 term. This means a decision will be released by October 3, 2021. Until then, just buy the dips and sell the peaks.
We don't know what the decision will bring us, but any news is good news. Liquidation is good. Release is good. Reimbursement is good. Status quo is bad.
Hopefully this applies to senior preferred too.
(we wish)
I find this part of the proposed rule interesting. I especially note how it hints that a consent order will be coming soon.
E. Transition Period
An Enterprise will not be subject to any requirement under the final rule until the compliance date for the requirement under the final rule. The compliance date for the regulatory capital requirements (distinct from the PCCBA or the PLBA) will be the later of the date of the termination of the conservatorship of the Enterprise (or, if later, the effective date of the final rule, which would be 60 days after publication in the Federal Register) and any later compliance date provided in a consent order or other transition order applicable to the Enterprise. In contrast, FHFA contemplates that the compliance dates for the PCCBA and the PLBA will be the date of the termination of the conservatorship of the Enterprise (or, if later, the effective date of the final rule), so as to provide additional authority to FHFA to restrict dividends and other capital distributions during the period in which the Enterprise raises regulatory capital to achieve compliance with the regulatory capital requirements. FHFA expects that this interim period could be governed by a capital restoration plan that would be binding on the Enterprise pursuant to a consent order or other transition order.
The final rule's advanced approaches requirements will be delayed until the later of January 1, 2025 and any later compliance date specific to those requirements provided in a consent order or other transition order applicable to the Enterprise. Regardless of the date of the termination of the conservatorship of an Enterprise, the Enterprise will be required to report its regulatory capital, PCCBA, PLBA, standardized total risk-weighted assets, and adjusted total assets beginning January 1, 2022.
I just got an email from FHFA announcing this proposed rule change. I didn't even know I was on Calabria's email list.
I'm surprised this isn't being discussed more or moving the stock more today. This is obviously part of the ground work for a consent decree and efforts to lock out the Biden administration from messing too much with Fannie and Freddie. I think this may be the beginning of the beginning for shareholders.
I was lucky enough to see today's drop at just the right time. I had sold about 4000 shares in recent weeks, so today I was happy to buy those back and add 1000 juniors just for fun. I was a little nervous I wouldn't get my FNMAH because it's so thinly traded. I actually took the risk of a market order for those - given how thin the trading is I might have ended up paying $100 per share, but got it just a little off the low.
Days like today are why I'm still in these stocks! Total fun!
It's mostly dead money until The Supremes sing next October - but until then these pops and drops do provide some excitement.
This contrarian bull did both. I sold 1000 shares of both fannie and freddie yesterday, and this morning I bought them back. Only made 20% on the round trip, but it's better than nothing which is what these companies have returned to shareholders over the last 12 years.
I'm eagerly awaiting the day they start paying dividends again. In the meantime, I've got my sell order in for those 2000 shares again. Don't worry that is a very small percentage of my holdings.
Canceling student_loans is a double-win for F&F! Not only will graduates have more money to put towards a mortgage payment, students who were saving up for college can now use that money towards a down payment on a house, and just borrow the money for college. After graduation they have both the down payment and money for the monthly payments. This will be a BOOM for F&F and housing in general. I'm investing in both F&F and real estate.
They both clearly said exactly when the GSE's would be released:
When they are adequately capitalized.
They even said how much capital they need by referencing the new capital standards.
They didn't say when they would have adequate capital, but we know that by simply retaining earnings they could have it in 5-10 years. If The Supremes grant some monetary relief that could be accelerated by 2-5 years.
It seems everyone has moved away from this room too.
I wouldn't expect the Supreme Court to take up our case before April or May. You will need to chill out for a while.
It looks like some (bad) news hit today based on the price action.
I keep wondering if there might be a penny or two per share left over for common shareholders after all is said and done.
Does today's price action suggest that someone in the know knows that there will be more than a nickel a share left over from the bankruptcy to distribute to shareholders? Or is it just random speculation?
How does the larger than expected Q2 loss reported affect the future of Akorn? It's down today, but how far down should we expect it to go?