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The warrants... as they are called.... have not been exercised. Thus the greedyment(government alias) has not paid $.01 for them as they are....
garbage.
Fruit of a poison tree.
Remember... they have duty now to put in save and solvent condition.
nWS is not this...
10% interest is not this...
nor was stealing 80% of the companies... not this.
The ruling has far too much collateral damage that the greedyment's ship is gonna sink.... its the titanic on steroids.
So price it at firesale giveaway and make underwriters and new purchasers happy that they got something at 25% of fair value or less?
Makes no sense to the current shareholders for which duty is ultimately owed.
If they artifically set a low price than market value then common shareholders when able to bring suit will bring suit.
The (some) rights of the common shareholders have been stayed; but those rights will renew and that could spell a problem; for whomever (government) allows the current shareholders to be inappropriately diluted. There are too many smart people here that won't take that.
Fair dealings require a fair price.
JC
Keep in mind the court ruled the government exceeded its statutory authority. This is the first time the fhfa / treasury have ever been held accountable to any entity besides itself.
So, when lambert said they could do anything. and all right was all rights and bla bla bla...
Well this ruling says no they did not and yes they have some duty and responsibility according to the law.
So, the next question is... what are those limits and is giving away 80% of the company for $20,000 is itself in excess of the statutory authority. So, might be paying 10% interest when, prevailing fed funds rates were 2% and other more arms length transactions were at 3 to 4 or 5% so, did they set out to screw everyone and be so greedy that it violated the public trust and exceed their authority?
This ruling is a tipping point.
The house of cards is fixing to fall and its going to cascade!
Going down hill... going to pick up speed and the government's positions are going to crash and burn!
Yes!
Remember once we got to net positive paid off w/ 10
% interest... the government now owes fannie 10% interest. So they are accruing 5Billion a year in interest income on top of the $50 Billion.
I say the government needs to settle the class action suits fast and make restitution.
Time for greedy government to come hat n hand to the table.
Love it.
Can't move to nyse unless company applies to it for listing and that is controlled by fhfa; however, if the nws violates the intent of conservatorship....
what else does as well?
hmmm???????????????????????????????????????????????????????????
opens up a whole new precedent and line of thinking ...
that other judges can't ignore... even lamebreath... this could even effectively set aside his ruling and all the other rulings based off of it.
gonna be interesting.
I'd say fireworks like fourth of july
This is huge as its a clear shareholder rights win.
A win that will make others reconsider their findings about what is absolute or note to rape and pillage.
This could bring an interesting new mindset.
Which would mean it would be some amount plus interest.
interest at same rate they were taking from them
Here is the rub.. did they actually tell them to stop it or just tell them its not proper.
Can they file an injunction to stop the sweep pending the outcome ?
Nope...
Not selling...
Just hoping not to be disappointed.
Expecting the government to be greedy and take another spoonful while at the feeding station.
Hoping the get real and do right, finally, expecting them not to.
While i'd hope to agree and wish it were so.
At the very last minute i have grave concerns that what may be released is going to be very disappointing to the vast majority here.
I've been long these since 2008 and sorry, greedy government will probably take one more one more spoonful. And its just the way they are.
Probably, by the end of the day tomorrow 5 more lawsuits will have been filed.
I hope not... but its government and i expect to be disapointed.
My experience w/ Houlihan Lokey was not favorable and it would be very scary to shareholders and the company as a whole as it is known today for them to be involved.
I won't get into details, but for them to be engaged you can expect less than favorable outcome for the common shareholders. In my opinion, it would likely turn out very poorly for fannie / freddie shareholders and well...
it would likely have a lot of disappointed shareholders.
Sorry, not a fan of them in my opinion. My vote would be negative.
Wrong
Each entity still had a BOD
The BOD is impotent and doing as the FHFA directs.
So, FHFA just direct board not to declare divy
Then,,,,
Done
REcap't
Ya'll do realize that the nws is stated as a dividend.
Dividends have to be declared by the board of directors to become payable right?
So, any time and quarter the BOD working for the FHFA; well all they have to do is not declare a divy and then its not payable and if not payable it can't be paid.
easily done.
Next problem...
Yep, at the end of the month.
then it will probably take 18 months to render a decision. If its not delayed further.
Starting to think my 2 year old will be giving me grand babies before this is over.
These people have 0 sense of urgency. Temporary to them means when they are good and xyz ready. Whenever that is.
Here is the thing.
If they'd actually, just pick a plan and announce it then stick to it. I'd be perfectly content with a 5 year plan if tomorrow were day 1!!!!!!
That way we knew what to expect and then the market could react to it with expectations.
If it included...1. canceling the nws 2. voiding the warrants 3. relisting on nyse
Just get on with it already.
If Tomorrow were day 1 then we'd know how to act regarding all of this and the market would look at preferred stock and say... in 5 years they are full value with dividends, so you discount them on a yield to maturity basis... no big deal easy to do. Commons would trade at a similar discount to where the market expected them in 5 years, after years of retained earnings and future profit expectations. If after 5 years they did not have adequate capital retained, then I could see some stock offering but, they'd be for 15-20 Billion not 100 Billion.
Its all perfectly logical, if they'd get off their rear ends, make a decision and tomorrow were Day 1. When will Day 1 be?????
Come on already,
I'll believe it when i see it. First quarter that passes without it .
So much smoke and mirrors / bait and switch.
I just don't believe their rhetoric.
No applause until it actually occurs.
and canceling the nws would have been so easy.
All they have to do is not "declare" a "dividend" and that is up to the companies to do, is 100% not in the control of fhfa or treasury.
if no divy is declared no money is sent. Period!
So, yes, its really that easy to start the process. But, no one has a set to do it.
So, yes, i'll believe it when i see it and ...
a massive stock offering is bad.
You do know; i was responding to another persons note that stated "can't issue stock in conservatorship"... right?
Which was hypothetical; so, yes, i believe me more than calabria who can't seem to take and stay on any position long enough for the ink to dry. He's just another redo of twatt.
If it were illegal to issue stock while in conservatorship that would include warrant shares minted and issued. Thus, out of conservatorship if they can issue stock then, common shareholders like me and many others can sue to stop them from being issued since our "rights" would ahvve been restored.
catch 22 ?
Expectation and forward looking valuations.
If what we've just learned is true and the new mel watt now is going to collect a pay check for 4 years without doing diddly do and somehow if possibly true allow the gse's to retain capital until released in 5 years, then shouldn't the preferred trade at some discount to par that is effectively a yield to maturity? At a discount rate of 6% that might make them worth around $18 on a $25 coupon.
Similarly the common, should also trade at a discount to their 5 years from now multiple. With the only uncertainty the dilution of the greedy government taking more thru the warrants (which i believe would be a taking) You don't have to take all of my asset for me to lose some portion of value. Taking 80% is more than 1/2... So, as a 5 year discount to fair value shouldn't this put common stock at significantly higher ?
I mean, if the market is supposed to trade off of future earnings, wouldn't 5 years from now future earnings with today's capital structure not indicate a much higher valuation, even if diluted 5x (which again would be near criminal and bring upon more lawsuits?)
Hardly,
5 years is 5 years.
That makes 16 for a totally contrived situation, that i could have fixed in 3 months.
Just a bunch of junk.
I was a young man when this all started with young kids. Heck i'll be a grandfather with near teenager by they time this is over.
This rots.
I have other things i want to do in life rather than wait for them to get of the pot.
MCalabria all he is doing is creating a job for the next 4 years, he is worse than do nothing watt; cause watt was incapable as a person to do diddly, this guy at least could do something if he had a set. Which she obviously does not!
If the so called plan is complete. Which a 5th grader could have written, release it already. Stop stalling, this is total BS stall tactics and more of the same nonsense.
Good grief.
Couple things to put in perspective, generally, that an argument can be made and could be made that...
1. an interest rate above fed funds rate is a "taking". Why? because as a psuedo arm of the government transfer pricing dictates that one portion of government should pay the rate available to other arms of the government. Sort of like medicare that demands that it be charged its rate for services or the lowest rate offered.
So, in a sense, charging 10% when the prevailing rates were 2-3% is a taking.
2. the warrants if exercised would also be a "taking". Why? because the loans have already been fully paid back with interest. Therefore, taking more than what is due is a taking.
So, two things, and yes, I sorely wish i had the money to file suit for interest rate and for the warrants. Keeping in mind that under accounting lore; having a right to acquire 80 percent is control and most companies would consolidate the entities. But the government is skirting those rules. Somehow.
As to the calabria saying wait a minute on that change, well that's too late, its already entered into the record and ship has sailed. You had your chance, the fhfa did to argue that and it waived its right. Too bad. It should carry no water nor delay the process.
I guess donotunderstand is appropriate here.
The point was at some point, you got to put a stick in the ground and move on. Make up your mind. People can't protect against every risk and every thing that could go wrong. Sure do the best you can but be reasonable. and get on with it already.
The point is, these people are posturing over things that just don't matter. You can't insure against the world ending cause if it does, then, there are bigger things to worry about. Economically, so while sure housing values dropping 80% would really suck but there would be other things far worse than a few million busted mortgages.
So, lets not lose sight of what is important and get on with it already.
What if the US filed bankruptcy then how much money would Fannie and Freddie need maybe a bigger guarantee?
What if US went to nuclear war with russia and 200Million people died, what then, how much of a backstop do you need?
See at some point the argument gets pretty silly, cause ultimately you are betting on the American Economy to be sound or at least not totally implode. And, if it did, arent there more important things to worry about?
Yeah, what if if rained all across America for 40 days and 40 nights non-stopped. And California dropped into the ocean... how much do you need then. After all, its a stress test and well it could happen.
Silly and at some point defeatest arguments.
What if Apple folded? What if Microsoft was found colluding with some rogue nation and all of their cloud data was corrupt? Then what ???
Again, horribly silly, put in place regulated captital requirements of 3-5% and lets get on with it already.
These government clowns were fast to cause harm and steal my companies but so slow in doing the right thing. Its beyond comical.
Its time to Flush already!
Why $15 when intrinsic value is over $100?
Sure it does, Men and women behave the same. So, yes this is off topic and will be deleted. Just wanted not to pick on men;who are always seen as the slime when it goes both ways.
I completely agree.
If the government screws over current investors, who would go back down that path with them again?
Sure it happens in real life all the time. Look at all those cheating wives who divorce and then marry their boyfriend only to cheat on the boyfriend. Like, sure it won't happen to me attitude, but it does and it will. This 11 year legacy will take 100 years to overcome; the government can and will screw the individual investor which probably is giving those pause for concern over the markets anyway.
Who is next?
Unless the government is held accountable; who is to trust it. Who?
Here is the interesting thing about this proposed / speculated equity raise.
So... they say they need 125Billion combined.
Think about that.
The companies needs 125 billion.
Remember the gov't says they owe 187Billion in a first position debt / equity that hold 100% of the interest in the companies profits yet own 0% of the stock.
So, with the 125Billion raise do they pay off the 187Billion owed?
or
is the 187 allegedly owed get extinguished because its already been repaid. If its already been repaid then the collaterailized warrants - the whole purported reason for taking them is nullfied and that too get wiped.
So, that all happens...
Then what? Raise 180Billion at adjusted fair value.
Adjusted fair value would be north of $100 a share. So, that's just 1.8billion shares raised or basically double the shares outstanding
and off we go.
So, is the goal to get the companies out of gov't control or rape them further?
If the true goal is to get them out then get them out. If not, then let the vial behavior continue.
Which is their goal / mission?
I'd be very disappointed at $12 when... a higher number is attainable if the right things occur. Sure i'd love some real big number, but reality tells me 4 or 5 multiples of your $12 is more in the game.
Cheers,
JM
Guido,
What would these two do with the 180Billin raised?
If it were me, i'd use it to make some more money. If you figure they'd earn another 7Billion or more.
So, 27Billion in earnings on your 3.6B shares is eps of $7.5 not $5.50
$7.5 eps
Just cancel the warrants and bury them.
FHFA should settle all the lawsuits for a couple of bucks
Warrants are fruit of a poison tree and will be worthless. If they are excercised this thing stays in limbo another 10 years a the lawsuits play out.
Not gonna happen.
With that, the return of stolen funds or rather reset interest rates money flows back to fannie and freddie.
Any offering would then be in a year or two and would not require many shares if the share price has bubbled up to fair value.
So, no.
No reason for a R/S and share price and value could easily be supported.
Yes.
Fair value is actually near twice this but; others will say no.
Lots of wrongs have to be undone; but one at a time its not beyond possible.
Good luck to all
Yes - very possible in the near future.
Any signs as to canceling the sweep. revising the interest rate or retroactively adjusting the rate / giving back illgotten gains would be moving.
Higher a stable share price the easier to raise pieces of money to recap the company and maintain share structure.
Big thing is canceling the warrants. Which fhfa director can do if its in the fhfa's best interest as he decides.
This could easily run up to 7 or 8 on no news and back down to 4 or 5 until more solid strategy news comes out.
or it could go right on past $10 to 11 or $12... and hold pending more news...
Going to be very interesting.
This has got to be one of the most intelligent questioning comments nearly every posted.
"a higher share price makes raising capital harder"...
What a bizarre statement.
That was my whole point.
Good catch!
Fannie and Freddie should be able to purchase the warrants for the price the gov't paid for them. Gov't should not be profiteering in private companies. That is Greedy.
So, I'd agree.
Exactly, what is "affordable housing"? Seems like a good sounding thing that is really meaningless.. like a "living wage". Oxymorons in approach. How or what is the serious impact on Fannie and freddie and what keeps them from being relevant.
Fannie is already a shareholder owned company ...
That has been hijacked.
Clark,
I'd say nearly nothing is priced in right now. Except the negative, the sweep, the uncertainty of what the H377 they are going to do, along with the warrants.
There have been too many stops and starts and false ducks and weaves.
Once some of that has been clarified, i think fandf move up rapidly if, its favorable.
Fingers x'd.