Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
If it goes lower, I'll back up the truck.
Probably miraculously find a second mouse hole.
It seems like you've forgotten how the damages were calculated in the Lamberth case.
Damages were the difference between the day the NWS was implemented and the subsequent drop in share price. A single day in damages.
It was not calculated from NWS to 2/2/23...
The takings will follow suit.
The damages for taking would be the loss suffered from the day the takings occurred.
So... if cramdown happens today.... and it drops from 47 cents to 1 cent... you'd get back a grand total of 46 cents...
To vegas ya go...
Yeah, don't want any common cents right now... its uninvestable.
It's a different story after the restructuring though but right now, no.
Why would I want to convert right now? I'd be overpaying.
I'll wait for commons to be less than 1 cent first.
TH has a desired outcome that he oh so wishes to achieve and happen.
Commons... please don't go after TH with pitchforks once the restructuring happens.
Half of this board is going to get wiped out.
I used to feel bad about it but not anymore because everyone here has tried and it's just not going to work.
If common fantasy land is where they want to live then let em live it.
Conservatorship and NWS aren't even the worst of this saga, for the greatest tragedy for FnF has yet to come. It will happen when commons get diluted to 0.01% with senior conversion and warrants exercise.
Profitability is NOT the only criteria for being in distressed.
Highly recommend at least reading through a distressed debt/restructuring book to understand the innerworkings of how it works.
Even if you don't think the idea is right. You should still read through it to make sure that your commons theory is not incorrect.
https://www.amazon.com/Distressed-Debt-Analysis-Strategies-Speculative-ebook/dp/B07CTYYND5
It's more than just about being right. You need to also view it from the point of if you could be wrong. There is a nuance there.
The problem is that TH has never been through a restructuring before. His responses to all solutions are through the POV of a healthy company...
FnF are in distress.
Did you forget that there was a massive NWS?
FnF issued 33B of JPS.
FnF collected 33B in capital pre-conservatorship.
They now have 33B in cash but owe 33B in liabilities.
HOWEVER. NWS happened.
33B in cash swept away but 33B in liabilities remain.
There you go.
Indeed, FnF cannot unilaterally make the decision.
However they can make an offer and hope at least 2/3rd of JPS holders accept.
Psssst, there's a little secret...
Keeping the JPS as is in the current status quo is a -33B drain on the capital of FnF... If you convert JPS to commons, FnF will miraculously gain 33B in core capital and be 33B closer to full recap.
Do you know why the JPS are a -33B on the balance sheet?
Did you follow up in the prompt with "please cite your sources?"
I would roll in laughter if it lists Bradford.
Can corporations or FNF in this case... legally repurchase preferred shares in the open market?
Although I believe if they started that, there'd be immense speculation as to what would come next and then JPS would be trading at PAR real soon...
Did you miss the whole discussion about how Calhoun was the front runner but then got overturned behind the scenes? It was right before Sandra's nomination.
https://howardonmortgagefinance.com/2021/10/19/comment-on-ercf-rule-amendments/
"As I’ve said before, I wish I knew what happened for the Biden administration to have gone from telling Mike Calhoun on a Friday that he would be nominated to be the next FHFA director the following Monday, only to have that put on hold over the weekend, then to have Sandra Thompson nominated for the position, and today to hear all members of the Senate Banking Committee, including Democrats, sing her praises. But the banks clearly have won. It now seems highly unlikely that there will be any administrative release of Fannie and Freddie from conservatorship for as long as Sandra Thompson is the director of FHFA. And it will take a highly visible “wake up call” or crisis—stemming from the consequences of allowing the banking industry to effectively set the pricing for the $6.8 trillion Fannie and Freddie MBS market in a way that advantages themselves and disadvantages low- and moderate-income homebuyers—for a new FHFA director to be named. What a missed opportunity."
Richard Epstein quit and threw in the white flag. He gave up already.
Let the man rest in peace.
He failed.
I mean yeah if you're playing with money that you need and you're betting on the timing...
I don't need what I have in this so I can wait for another 30 years if I have to. I'm going to start adding 250k in PAR every December from this point on just to keep the investment from deteriorating.
Aside from that, allocating the rest of my money elsewhere.
I welcome your thoughts.
It just makes me sad that half this board will get wiped out once the recap and release begins...
Yes, he thinks so seriously or at least some type of catalyst.
He thinks there'll be a biden announcement for recap.
You should read up on a couple of restructuring case studies.
- The one before is straight from who FHFA hired as their advisor.
https://www.hl.com/email/pdf/subscriptions/bsttcacs.pdf
The knee jerk reaction for how it works is that THIS CAN"T HAPPEN.
Ohh but it does... once you understand it'll make sense.
Contract states it must be redeemed at PAR.
The personalities are completely different. They're not the same person.
Man with no name can correct me if I'm wrong...
I don't think you're quite understanding what the restructuring is conceptually.
- Who owns what
- Who is the one selling
- How is capital being raised
After a senior cramdown and warrant execution, UST will own 99.9% of FnF.
- What UST is left with is an undercapitalized FnF.
- What UST needs to do is RAISE capital for FnF.
Conceptually what happens is UST will dilute itself in order to raise capital for FnF.
- In other words the govt will be taking haircuts to bring FnF from undercapitalized to fully capitalized.
- UST will give a slice to JPS to wipe the JPS debt off the balance and bring in 33B.
- UST will continue to give up slices of itself to new common equity until FnF is capitalized to what they like.
- What UST's stake is worth is what are the slices leftover.
There is no risk to a senior cramdown and warrant execution.
Everyone keeps getting tripped up with the idea that IPO'ing shares are based on the current price... That's what Tim Howard seems to think as well... But that's not how it works...
The process doesn't move front to back but rather it starts from the end and moves backwards.
Buy me out... convert me... I really don't care. Either way leads JPS to being made whole.
From a capital raising stand point, it makes more sense to convert because it costs FnF zero additional dollars.
If FnF wants to "buy out" JPS, they would need to raise an additional 33B to fund the buyout.
You're still not understanding why JPS may get offered a conversion to commons.
During a recap, FnF wants something from the JPS.
FnF does not want anything from the existing commons because they have nothing to give.
Can you picture it?
They had 20 years to decide and they need another 20? lol
The administration from 2024-2028 would be forced to act.
The warrants expire in 2028... even though it will be overshadowed by the liquidation pref of the seniors, it will still make BIG NEWS HEADLINES.
FnF will be in the spotlight whether it be good or bad.
I gave up all hopes on legal action when they capped the payout for Lamberth.
The way out is definitively admin action.
Fool me once, shame on you.
If you fool me you can't get fooled again! - Bush
Don't play on margin.
The market can remain irrational longer than you can remain solvent. - John Maynard Keynes
Since you've already closed out of the position, mind me asking where do you currently see a better opportunity?
Or rather, where are you allocating all of the money that was in FnF.
You seem pretty confident that something will happen soon...
I would love to feel optimistic about it but history has been rather disappointing thus far... I stand by leaving my entire JPS position untouched until come December... if nothing happens by then I'll add about 250k in PAR with each December that goes by after that.
Can we let Epstein rest in his grave? He waved the white flag and quit a few years ago on the case.
He. Gave. Up.
Why would the guy you're playing poker against tell you their hand and what they plan to do with it?
Justice is dead with cert denial.
However you can predict what the govt will do by putting yourself in their shoes. What will benefit them the most? SPS cramdown on the exit.
Why would they willingly recapitlize FnF? For liquidity.
Same reason why any start up or company IPOs... to give their stakeholders LIQUIDITY.
"Settling" of all remaining litigation for re-privatizing them is not quite the correct requirement.
A more inclusive word would be the "end" of all remaining litigation. Settling, winning, or losing are all potential possibilities. Any of those three options can still lead to re-privatization.
Do you add more to your JPS position with each year that goes by uneventfully or are you satisfied with its size and holding as is until resolution?
Crazy waiting game lol...
It is because they're on their last life line that they WILL do something.