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the stock price has gone down from $70 to .25 due to selling pressure.
RIGHT! The stock has been LIQUIDATED. If you don't know, "liquidation" = "sold off". And the common who understood that the government has seized control of FRE - and extinguished your voting rights and dividends - owns a 79.9% hedge fund for their ROI, LIQUIDATION PREFERENCES, RIGHTS and per the toxic purchase agreement the company will issue more common to sell to pay-off the senior preferred's dividends and interest -FURTHER DILUTING THE COMMON INTO OBLIVION. That is why the stock was LIQUIDATED from around $70/share to its' current price. Those with any smarts know what is happening here.
You want to claim that Regulation T of the Fderal REserve says one thing, but I have actually read it and linked quotes from the federal reserve that says another thing.
How long have you been trading? One cannot SHORT via a CASH ACCOUNT. ALL SHORTING is on margin and NON-MARGINABLE SECURITIES CANNOT BE BOUGHT OR SOLD ON MARGIN per REG T by decree of the FEDERAL RESERVE BOARD.
I have NO IDEA what you are arguing about. It's the LAW. Get it?
I've never seen a poster more cocksure about things you've already been proven absolutely dead wrong beyond any shadow of a doubt about. I can't figure out if you're you're really this obtuse or just pretending.
Rawnoc, save it. OK? I'm right. You're wrong. And its' dangerous posting tripe to the pinky players who've swarmed over here for a quick buck. This POS is TOXIC.
Lets not forget, that even if somebody never did business through FNM/FRE, if these two fail, what will the effect be to the prices of their houses?
What will the effect of the bail-out have on home prices? The federal reserve is diluting the US dollar by printing up the cash to bail-out FRE, AIG, etc. The debt will dilute & devalue the dollar by an estimated 50%. To buy a home that was selling for $200k will now cost a buyer $400k. The equity in your home will be devauled 50% and if you sell the house, you will get back 1/2 of what you have in it. And the taxpayers will be paying the govt approx $7000 each to pay back the debt. Everyone loses but the fat cat execs who walked away with millions.
If during this whole discussion you would have made it clear that SHAREHOLDERS were liquidating (instead of insinuating that FRE was " liquidating"), I would have never had an issue with that particular argument of yours. So thanks for being clear in your response to us that time (seriously).
I was very clear about who liquidated. Another poster here has been twisting my posts for reasons only he knows. The senior preferred's liquidation rights and preferences are just one more reason knowledgable investors have liquidated their FRE holdings. The conservator has already taken away the common's voting power and dividends. That is another reason educated investors have liquidated their holdings of FRE. NO MATTER WHAT THE GOVT DOES TO BENEFIT FRE, THE COMMON WILL SEE NO DIVIDEND. That was blown off by another poster as "temporary". You'll see.
Woogster, the bounce on this toxic POS was purely based on speculation. Everyone woke-up yesterday morning like it was XMAS morning and Bushie was Santa Claus. Can you imagine if we all woke-up that morning to discover we had no more credit card debt. No more mortgage payment, etc. etc., and we had MORE money to speculate with? Even this pig bounced. The two victims in this are the common shareholders and the taxpayers. It's amazing to me that anyone would play this for more than a flip.
Can I ask you what kool-aid you & Rawnoc are drinking? I ask you the same thing I ask Rawnoc. If the stock hasn't been liquidated, how did it go from around $70/share to its' current price? In the real world which I live in, it means the shareholders sold-off their positions of this toxic garbage while they still could. Are you and Rawnoc suggesting to reasonable people that the share price dropped from around $70/share to its' current price because people are BUYING IT? Or are you telling us evil shortsellers are responsible? And, OH LORDY, you say just because I made the observation that the stock has been liquidated that my "intentions are less than virtuous"? LMFAO! May I suggest that perhaps the two of you, to be "virtuous", explain to us how the price dropped from $70/share to its' current price without shareholders liquidating their holdings of it? TIA.
(1) Stock is being liquidated. lol
The stock has been liquidated from approx. $70/share to its' current price. I have no idea what to attribute to the drastic devaluation of this stock other than shareholders selling it.
(2) Equity is worthless. lol
Again, you have trouble comprehending what I wrote. The common shares, your "equity" in FRE has been devalued from approx. $70/share to its' current share price. In reorganization the common shares are "extinguished" as debt. Your equity in FRE will have no value. No offense, you really need to study up on this stuff.
(3) Low risk terminal short at 25 cents. lol
I never made such a claim, nor have I, or would I, short FRE.
(4) Non-marginable stocks can't be shorted. lol
That's the law per Reg T & decree of the Federal Reserve Board. If you think different, you really need to learn more about securities laws.
(5) Only 45 days ;eft -- this is worse than BK. lol
Boring, asked & answered numerous times. Like securities laws, you also appear to be deficient in understand BK & Conversatorships.
(6) Government is selling common shares. lol
I suggest you reading the toxic financing terms in the purchase agreement. It's a major red flag here and IMO you do real harm by suggesting to green traders that it is "boilerplate" and not important. It IS. VERY.
(7) Common shares are debt. ROFLMFAO !!! (my personal favorite)
No offense, but you're obviously clueless about bankrupty, reorganizations and conservatorships. Common shareholders are "extinguished" as debt in reorganization. The conservator must see to it FRE is solvent. Upon entry from the conservator, or BK Court, all of a company's shares of common stock will be immediately extinguished, and no shares of the company's common stock will remain outstanding. The company will then file a Form 15 with the SEC to terminate the registration of its common stock and suspend its reporting obligations under the Securities Exchange Act. That's how it works.
Seriously though. have you ever not asked yourself what those "Q's" are added on to BK'd tickers? Those are offerings wiped out as debt in reorganization. Its' scary I even have to explain that to you.
(8) Heading for zero. lol
per the chart it is, and again, you've already lost your dividends and voting rights. The common are "extinguished" in reorganization. How much more "zero" can you get?
(9) Only way to get a ROI is to sell at 25 cents. lol
That's silly. You make it up as you go. I never made such a claim. I suggested all take their profits off the table after this dead cat bounce. Reality will kick-in regarding what Bushie was talking about. There is no concern here for either taxpayers or the common shareholders.
I don't mind debating with you, but you might wanna learn about this stuff a little bit more before you attempt to talk down people who know more than you. No offense.
I figured as long as we're going to say foolish things like the conservatorship = 45 days
Rawnoc, I explained clearly about your seemingly purposeful "misunderstanding" of conservatorship v. Chapter 11 and the deviation from the standard 45 day stay.
I informed you that a 45 day is the standard stay for FDIC conservatorships per 12 U.S.C. 1821(d)(12). I explained to you that the FDIC is not really set up to handle failed GSE's. I explained to you that no OFHEO conservatorship team has experience in handling failed GSEs and thus the extended stay. I also provided you info that conservatorship provisions do not permit DIP management (see 12 U.S.C. 4619(a)(4)(B)(i)). Your response was that the info I posted was from an evil "naked shorting" website. Regardless, you either still don't get it or, for whatever reason, have decided to continue your crusade against the truth. So be it. Whatever floats your boat.
only marginable stocks can be shorted
Stock can only be shorted on margin.
common stock is a debt
Correct. And the debt offering to the common is wiped out in reorganization.
why not make up a few more things about this "terminal short" that absolutey exploded today that we were told to sell at 25 cents?
I never suggested you sell at ANY PRICE. I simply deferred to the toxic financing agreement & the the financiers hedge fund of 79.9% of the common stock.
Like I said, its a toxic pig. Hope some of the posters here were able to take some profits on Bushies' pathetic speech today.
The shorts are being liquidated. Their short positions are debt
How do you 'liquidate' a 'short position'? The company has no debt to a shortseller. A shortseller borrows stock to leverage his short postion. The 'debt' is to the common. You're very confused.
/
The government is rigging the market. In FRE they have a toxic financing deal where they could create any class of stock at any time they want with any stock preferences they desire & they own a hedge fund of 79.9% of the common. FRE also can dilute the common by issuance and sale of more common shares to pay-off the interest and dividends on the senior preferred. Eliminating shorty allows more oppurtunity to hit the bid before it collapses. I'd suggest not falling in love with this toxic POS and play the bounces if you can. The common are debt & the debt must go.
HAVING SOME SHORTS AT MY BBQ TODAY
More of those imaginary shorts that do their evilness by shorting non-marginable securities via cash accounts? LMFAO!
Your concern, my friend, shouldn't be shorty, it should be FRE's toxic financing agreement. To save FRE the debt must be cured. The common are debt.
The federal reserve is just printing up more money & diluting the value of the US dollar to pay-off this debt. The federal reserve is a publicly traded issue that answers to its' shareholders as well. Anyone who believes that the federal reserve isn't printing money for private profit, devaluing the US dollar in the process and seeking private profits at the expense of the US taxpayer is kidding themselves.
The US Gov. Is not going to let FNA FRE fail.
Not allowing FRE to fail is part of the reason common shareholders should be very concerned. The common are debt. If FRE is to make it, and be solvent, the debt has to be cured.
"Backpeddle"? LMFAO! I'm RIGHT. I state again, FTR, ALL SHORTING is on MARGIN, per Reg T and the Federal Reserve Board. If any brokerage is allowing shorting of a non-marginable security on margin, it is in violation of Reg T. If any brokerage is allowing shorting via a cash account, it is doing so in violation of Reg T and decree of the Federal Reserve Board.
Anyone who trades stocks knows this. With all respect, it appears a lot of green pinky traders are swarming over this dying pig and bringing their pinky sound-bites and pumping tactics here attempting a pump & dump.
Sell Short 100 MBHI Executed @ $3.685
Account: xxxx-xxxx Your Day sell short order for 100 MBHI at market price was executed at $3.685.
You confuse "buying power" with "margin". Per Reg T, you can't short ANY stock via a cash account. If your broker brokered a short sale of a non-marginable security via your cash account it violated Reg T. If your brokerage allowed to short a non-marginable security on margin, the firm violated Reg T. That's the law. A simple call to the NASD will prove me right.
This wrong post of yours is the subject of discussion
No, your BOGUS claim that you are shorting pennies, non-marginable securities, via a "margin account", IS the the subject of the discussion.
My post, in response to your bogus claim, is true & accurate.
Posted by: brute_force Date: Wednesday, September 17, 2008 1:51:10 PM
In reply to: Rawnoc who wrote msg# 2675 Post # of 2868
Wrong. Pinky stocks are non-marginable securities. You can only short marginable securities. You can't buy or sell non-marginable securities on margin.
"Please note that a stock need not be a margin security to be sold short. Under Regulation T, any security may be sold short, even if it is a nonmargin, nonexempted security."
Rawnoc, the Federal Reserve Board currently regulates which stocks are marginable. Stocks selling below $5, 'penny stocks' are never marginable. If your broker is allowing you to buy & sell non-marginable securities on margin, he is in violation of Reg T. If your broker is allowing shorting of ANY KIND via the buying power of your cash account, the brokerage is in violation of Reg T. That's the decree of the Federal Reserve Board.
Rawnoc, you're confusing "purchase power" with "margin". You're describing "buying power" that allows you to purchase non-marginable securities up to the value that liquidation of available cash & stock in your account allows. That is NOT "margin". OTC & pinkes are NON-MARGINABLE SECURITIES, per the FEDERAL RESERVE BOARD.
If I have $1 million in my account, I can buy $1 million of say GS, leaving me with no cash. But I still have a ton of credit available and can still buy penny stocks.
You can't buy or short a non-marginable security on margin (.)
It's the law, per the federal reserve board.
The agreement was unveiled Sunday to protect current and future investors in debt and mortgage-backed securities issued by the two mortgage-finance companies
Too bad it doesn't protect the common shareholders.
Perhaps I need to rephrase -- Etrade considers ANY stock potential marginable. Therefore ANY stock can be potentially shorted.
No, they don't, and the Federal Reserve board has decreed that OTCBB & pinkie stocks are non-marginable. You can only short marginable stocks. Get it?
You don't understand what you are reading;
"...This does not mean you've bought them on margin. Rather, this is done to show that the position is marginable; that is to say, it counts towards the equity in your account (and therefore as part of your purchasing power and equity percentage calculations)."
In other words, you can purchase stock that you have stock, or cash, in your account that can be liquidated to cover the purchase, ie., "buying power". Like they told you, that's NOT "margin". Margin is CREDIT, and you can't buy or short non-marginable securities on margin per the Federal Reserve board.
That's why pinksheet stocks can be borrowed AND shorted. Anybody who shorts pinksheet stocks like I used to knows this. If I can locate the borrow AKA somebody holding it on margin and not as cash, I could short it.
Name one firm that allows you to short non-marginable securities. The Federal Reserve Board regulates whether or not a security is considered marginable. The rule is that brokerages do not allow penny stocks, OTCBB issues or IPO's to be purchased on margin. No idea how you accomplished shorting non marginable securities on margin. Do tell us the brokerage.
Back later.
Wrong about everything, as usual. If you have a margin account, any stock you buy can be potentially bought and held on margin.
Rawnoc, any "marginable security". You can't short or hold a non-marginable security on margin. You can't buy or sell IPO's, OTC and pinkies on margin, per decree of the Federal Reserve Board.
All stocks can potentially be held on margin.
Wrong. Pinky stocks are non-marginable securities. You can only short marginable securities. You can't buy or sell non-marginable securities on margin.
are you saying naked shorts do not exist?
Sure, insiders short naked unregistered securities all the time. I'm saying the pinky scam of blaming dilution, caused by insiders, Reg S & toxic financing, on "evil naked shorting" can't be accomplished in a reporting comany where all insider trading is reported. The "naked short" scam is a scam only non-reporting issues can con the public with.
my point is, in a penny, you can't win unless you can trade it in tandem with the insiders. The pinky crap is non-reporting and insider trading is not reported. The pinky scammers will blame "evil naked shorties" for the dilution caused by their insider trading (usually hedging unregistered stock). Here there is disclosure. There is a toxic financing agreement. We pretty much know its going to zero.
The public can't short a penny, they're non-marginable securities. This puppy can be shorted or boxed for huge profits on the disclosure of the toxic financing deal.
I mean, returned from "nationalization" status...released, back to "normal."
As in PRIVATE PROFITS for the executive FAT CATS and all the debt left to the common shareholders instead of the US taxpayers?
many many people are waiting for it to bottom out so that they can buy in at these penny prices
It's at penny prices because the stock is being liquidated. Everyone is selling while they can knowing that the feds can issue more shares to sell to pay-off the debt of the senior preferred debt offering. The feds ROI will eventually take this thing to zero bid. That's why the stock is being liquidated at breakneck speed. Brokers are telling their clients the real deal here.
True, but when (not if) housing recovers...if FRE and FNM are returned to private status, we could be adding a huge amount to our portfolio.
How so? If FRE goes private, the common are wiped-out. The feds will own 79.9% of the public vehicle that remains, or 79.9% of the capital stock debt.
it'll bounce.
Will it? One thing is for sure, it will never BOUNCE BACK.
LOL - i'm waiting for the KAABBBBOOOOOOOOMMMMMM
You'll have a long wait. Looks like a terminal short.
why even bring up 504?
Because you made the comparison to shorting pinkies. I responded by informing you that most of the pinkie crap is 504 paper that goes public to solely enrich insiders & toxic financiers. I took exception to your contention that FRE was shorted like 504 paper. FRE has a legitimate toxic financing deal with the feds. The feds have rights, privileges & preferences that will see to it they get their ROI. That includes hedging trading in FRE.
i say government backed penny stock waiting to pounce on the shorts
Well, FRE's toxic financiers are the feds, so you got a point -except for the "pounce on shorts" contention. Most pinkies are thinnly-traded, tightly-held 504 crap that go public soley to enrich insiders and toxic financiers, "shorty" being insiders & financiers hedging unregistered stock. In this case, the feds have a hedge fund to trade this POS, 79.9% of the common & the right to create any class of stock, with whatever preferences they desire, at any time. So, they always have stock to cover with. That is TOXIC FINANCING, not "evil shorts".
They're even going to be helping FRE/FNM operationally by helping the market for their paper by buying some themselves in the OPEN market.
Per the purchase agreement, FRE will be SELLING stock to pay-off the senior preferred. So, besides the senior preferred's 79.9 equity stake in FRE, death spiral dilution will be accelerated by issuance, and selling, of more capital/common stock to pay-off the debt offering.
roiresearch, this isn't "shorty", this is LIQUIDATION. Everyone is bailing ship - while they can. AIG serves as a good example. The feds are going to control AIG with an 80% equity stake. The feds will own a 79.9% stake of FRE. For their ROI they have liquidation rights and preferences. The fedral reserve will only print up money it can get a ROI on, the federal reserve is a for-profit venture that answers to shareholders too.
Down again today. It will continue that way until there is no bid.
wrong! The stock has been liquidated from about $70/share to under .40 in 1 month. The treasury VC will be FORCED into liquidating for ROI after the conservator transfers power to them. The purchase agreement allows the senior preferred to create any class of stock, with any stock preferences or priviliges, at any time, for ROI and FRE can issue and liquidate the amount of common stock required to pay off the debt to the senior preferred. This is TOXIC to the max. Red flags everywhere!
This is why you will see ZERO change in the number of outstanding shares of stock.
Rawnoc, the company can issue & sell common shares to pay-off the holders of the senior preferred. So, it doesn't matter if the senior preferred are convertible to common. The company can issue & sell common to pay-off the holders of the senior preferred. That results in dilution and a death spiraling PPS.
4. Mandatory Pay Down of Liquidation Preference Upon Issuance of Capital Stock
(a) If the Company shall issue any shares of capital stock (including without limitation common stock or any series of preferred stock) in exchange for cash at any time while the Senior Preferred Stock is outstanding, then the Company shall, within 10 Business Days, use the proceeds of such issuance net of the direct costs relating to the issuance of such securities (including, without limitation, legal, accounting and investment banking fees) to pay down the Liquidation Preference of all outstanding shares of Senior Preferred Stock pro rata, out of funds legally available therefor, by making a payment in cash to the holders of record of outstanding shares of the Senior Preferred Stock...
Do you understand what the word "IF" means?
>>> If the Company shall issue any shares of capital stock (including without limitation common stock or any series of preferred stock) in exchange for cash at any time while the Senior Preferred Stock is outstanding <<<
Yeah, I do. I also understand that you left out the rest of the sentence...
...then the Company shall, within 10 Business Days, use the proceeds of such issuance net of the direct costs relating to the issuance of such securities (including, without limitation, legal, accounting and investment banking fees) to pay down the Liquidation Preference of all outstanding shares of Senior Preferred Stock pro rata, out of funds legally available therefor, by making a payment in cash to the holders of record of outstanding shares of the Senior Preferred Stock
I think you'd understand "if" better IF you had actually completed the sentence. ;0)
Rawnoc, again you're confusing liquidation of the company's assets with the liquidation of STOCK. You can't see the stock is BEING LIQUIDATED? From $70/share to $.40 in 1 month. Its being liquidated as we speak. The conservator is a fiduciary. The financiers, the Treasury, will take over. But make no mistake, the stock is being liquidated at the speed of light.
"Boilerplate"?? LMFAO! Again, I suggest you have someone who knows a bit more than you explain to you what is transpiring here. Not only can the financiers/treasury create any class of shares with any preferences they want, including large multiples on their preferred. They have liquidation preferences to boot. It's a "boiler plate" for TOXIC FINANCING.
4. Mandatory Pay Down of Liquidation Preference Upon Issuance of Capital Stock
(a) If the Company shall issue any shares of capital stock (including without limitation common stock or any series of preferred stock) in exchange for cash at any time while the Senior Preferred Stock is outstanding, then the Company shall, within 10 Business Days, use the proceeds of such issuance net of the direct costs relating to the issuance of such securities (including, without limitation, legal, accounting and investment banking fees) to pay down the Liquidation Preference of all outstanding shares of Senior Preferred Stock pro rata, out of funds legally available therefor, by making a payment in cash to the holders of record of outstanding shares of the Senior Preferred Stock as they appear in the books and records of the Company on such record date as shall be fixed in advance by the Board of Directors, not to be earlier than 45 days nor later than 10 days preceding the date fixed for the payment, with such payment first being used to reduce any accrued and unpaid dividends previously added to the Liquidation Preference pursuant to Section 8 below and, to the extent all such accrued and unpaid dividends have been paid, next being used to reduce any Periodic Commitment Fees (as defined in the Preferred Stock Purchase Agreement referred to in Section 8 below) previously added to the Liquidation Preference pursuant to Section 8 below; provided that, prior to the termination of the Commitment (as defined in the Preferred Stock Purchase Agreement referred to in Section 8 below), the Liquidation Preference of each share of Senior Preferred Stock shall not be paid down below $1,000 per share.
4 (b) If the Company shall not have sufficient assets legally available for the pay down of the Liquidation Preference of the shares of Senior Preferred Stock required under Section 4(a), the Company shall pay down the Liquidation Preference per share to the extent permitted by law, and shall pay down any Liquidation Preference not so paid down because of the unavailability of legally available assets or other prohibition as soon as practicable to the extent it is thereafter able to make such pay down legally. The inability of the Company to make such payment for any reason shall not relieve the Company from its obligation to effect any required pay down of the Liquidation Preference when, as and if permitted by law.
(c) If after the termination of the Commitment the Company pays down the Liquidation Preference of each outstanding share of Senior Preferred Stock in full, such shares shall be deemed to have been redeemed as of the date of such payment, and the dividend that would otherwise be payable for the Dividend Period ending on the pay down date will be paid on such date. Following such deemed redemption, the shares of the Senior Preferred Stock shall no longer be deemed to be outstanding, and all rights of the holders thereof as holders of the Senior Preferred Stock shall cease, with respect to shares so redeemed, other than the right to receive the pay down amount (which shall include the final dividend for such redeemed shares). Any shares of the Senior Preferred Stock which shall have been so redeemed, after such redemption, shall no longer have the status of authorized, issued or outstanding shares.
Rawnoc, you might want to read that purchase agreement again with someone who knows a bit more than you do about toxic financing & securities in general. Have them explain this to you:
9. Additional Classes or Series of Stock.
The Board of Directors shall have the right at any time in the future to authorize, create and issue, by resolution or resolutions, one or more additional classes or series of stock of Freddie Mac, and to determine and fix the distinguishing characteristics and the relative rights, preferences, privileges and other terms of the shares thereof. Any such class or series of stock may rank prior to or on a parity with or junior to the Common Stock as to dividends or upon liquidation or otherwise.
What does "otherwise" suggest to you? Maybe defer to the Conservator. LMFAO!