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This is incorrect
It's doubtful FNMA even sees $3 this year.
That seems Fair & Reasonable.
Jr. Preferreds would most likely agree to that.
Another rough week for FNMA. We saw this coming at least.
It seems there's a large holder liquidating their Common position.
I'm curious if it's Ackman.
Judge Roumel is very pro-Government. So it seems the fix is in for FNMA.
Sweeney had already tossed the most important case for us anyway, the only one challenging the Conservatorships.
Now Roumel is coming in to do the clean-up work and clean the plate.
Looks like SCOTUS is Commons last hope.
Jr. Preferreds have Lamberth next year, which has already been remanded back to him with clear instructions.
This $2.05-2.10 area seems to be FNMA's Glass Ceiling.
She's starting to slip now with the Sellers showing up on the Ask.
Sure seems like Commons have finally realized their place at the bottom of the Totem Pole.
No point in buying at these inflated prices when everyone will be able to buy much cheaper at the time of the re-IPO.
No Bueno Amigos
$8-12 is a reasonable range. I still think $4-6 is the most likely outcome, but due to the Irrational Exuberance, FNMA might hit $7.
It will be fun to reflect back this time next year and see who was the most accurate in their predictions.
BOOM! Can we sticky this?
Agreed. $16 is too high. Likely $12-14 without Warrants or Dilution.
Unfortunately, we know both of those are going to occur
100% agree with these FNMA Facts!
JPS is getting called at par and has no future beyond their extinguishment.
Are any Jr. Preferreds down today? It looks like they're all Green.
What's holding Commons back??
There's only 1, 2, or 3 ways to raise the money for the over capitalization called for by MC/FSOC, right? Either retain earnings, issue new jps, and/or have UST return some or all of the exproriated funds, right?
Junior Preferred to be exchanged for a new series with 2% cumulative yield.
That $0.02 Pop got Sold fast. FNMA struggling to keep buyers interested in holding for more than a few cents.
No Bueno Amigos
Correct! And a positive SCOTUS ruling isn't necessarily positive for Commons since this is a Jr. Preferred case.
Not a recco
Is that including a 10:1 Reverse Split? No way FNMA sees $20 without an RS.
Drop significantly and then "rocket" back to $2.00.
Huge gains coming amigos. Load the boat!
The Market is saying FNMA is fairly priced at around $2.
Once the Market realizes the amount of dilution that will likely occur, I think it will price Commons even lower.
Most JPS I know are waiting to buy Commons for $1.50 post-election.
Let's see how low she goes!
SCOTUS might not feel that this was illegal. I hope things settle before the trial date. Things get really ugly for FNMA if it gets that far.
$2 magnet is too strong. FNMA likely stuck here for another 5 years.
Agreed. Without SPSPA Amendment, there's no GSE Recap and FNMA Commons remain near worthless.
A Jr. Preferred to Common Conversion is also likely going to be necessary to flatten the capital stack prior to the re-IPO.
Thankfully, we're nearing the end of the tracks. Soon we'll see whose guesses were right and whose were wrong
Does a Dem Senate put the kibosh on GSE Recap & Release? Can someone ask Gaby how the GSEs are going to get released in a Dem controlled Senate that's hostile towards shareholders and wants to keep the GSEs nationalized for their pet projects?
This is just one more thing for GSE fans to be terrified of.
With 14 days until #Election2020 , we expect a Democratic majority in the #Senate although we do not predict the #BlueWave that early voting data shows. As the election approaches, we expect that margin to shrink and reflect our Senate prediction of 51-49 favoring the Democrats.
— ACG Analytics (@ACGAnalytics) October 20, 2020
Their findings included that, under certain scenarios, the re-proposed capital rule may not provide enough capital to withstand a serious downturn in the housing market.
Commons are as risky as Frontier, if not more so.
You should talk to Glen though, he might be able to help you.
They sure can! But it won't help CET-1 which is the mandatory requirement that needs to be met in order for the GSEs to be released.
Wouldn't it be silly to sell Jr. Preferreds that don't help recapitalize the GSEs?
It also means they would have to start paying Dividends immediately on all of the Jr. Preferreds, further depleting much needed capital from the GSEs
I'm glad the GSEs have retained Advisors to help them so some of the FNMA Fantasy suggestions can be put to rest.
Calabria might even increase the proposed Capital Rule based on these comments today:
"FSOC findings included that, under certain scenarios, the re-proposed capital rule may not provide enough capital to withstand a serious downturn in the housing market."
No Bueno Amigos!
Is "Building Private Capital" bullish for FNMA? Considering the GSEs would need to sell new Commons, and likely at a discount to the Market Price, I would think it's more bearish than bullish.
Agreed. Jr. Preferreds look Strong and Commons Weak. This has been a continuous trend since March.
Commons might fall off the cliff down to $1.50 before the election which would set us up for sub-$1 FNMA post-election pending the outcome.
That's been the rumor circulating the interweb. Freddie is an easier lift being the reasoning.
However, I'm inclined to believe the re-IPOs will both be within a few weeks of each other.
Reverse Split gets FNMA to $20 by itself.
You gotta dream bigger.
And don't forget Treble Damages.
Green today or 5-year Chart Green? Because $2 has been a magnet for 5 years and counting.
Commons gotta do something eventually, right??
Maybe they hit $1 again.
Another rough week ahead for FNMA. When are us Average Joe's gonna catch a break?
Glad I Sold the Pop earlier. Ugly close!
At least they filled the Gap, so there's that.
1) This would be directed at the FNMA Fantasy Crew (the $20+ Commons and JPS get nothing for 5 years crowd)
2) Right, they either get roughly Par via Conversion or they get Redeemed. But we know they won't get Redeemed since the GSEs need to be raising capital, not spending it. The icing on the cake becomes Conversion to Commons near Par while Commons are around $2 or whatever their re-IPO price is. Then JPS become Commons and participate in all of the upside Commons have to offer. It's like winning 2-3 times instead of just one
3) I agree. Look at the tickers! The last 5 years are all anyone needs to see. FNMAS is up ~80% while FNMA is actually down ~15%. I'll share the charts below
FNMA:
FNMAS:
I'm sure they'll be happy getting Par, or close to it. Conversion would just be icing on the cake and one final "F* You" to Commons
Collins, et al, could easily push forward and choose not to settle and demand SCOTUS perform a full review on the NWS and single director constitutionality.
Once Jr. Preferreds Convert to Commons, you'll understand why the JPS all post here