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You are committed to losing here. Good luck. Sorry my condolences for your portfolio
Common are a man on a deserted island. Preferred are king of the castle.
no dilution protection = expensive lesson
That is one way to interpret it. Not how i would
There is no common value.
to you maybe it doesn't make any sense, but if treasury's goal is to maximize their post restructuring equity stake, it does.
unfortunately, when i go to the jps store now, money does not go as far as it did this time last week. frankly i prefer lower prices at this point --- but that is only because i believe they are worth face value.. i dont want to own something that is worth lower prices than i can buy it for, i'll leave that luxury to common shareholders.
You will learn the hard way with commons about why you needed dilution protection in this restructuring. Might as well have cash
you correctly identified the single positive thing for jps shareholders
but fail to recognize the spspa dilution that dilutes the shares you boast about owing into obscurity.
okay friend. you only hear what you want to hear and continue to ignore the reality of how restructurings work. converting the spspa to commons does resolve the litigation.
I also hope for the best for commons, but I am not going to deny them the harsh reality of outcome in spspa conversion as a favor to them to help them understand what is coming before it steamrolls their perceived interest in these two valuable enterprises. Cheers.
I can hope a penny is worth a dollar, but a penny is just worth a penny. Common shareholders basically do not understand capital structure or restructurings. That is a fact buddy.
I replied to this post to explain how it works as an opportunity for you to learn. I see your most recent posts look past my response and completely ignore that your claim that lacks dilution protection stands in line behind the spspa that is underwater in this pending restructuring.
It is not looking good for your share class.
the amount of capital they are retaining is good and pro exit from conservatorship, but you seem to willingly ignore the spspa liq preference that stands ahead of you in this restructuring.
if you don't want to understand, that's your own call.
you see, just because companies have money and you have common shares in those companies does not mean that any of it is yours if there are claims ahead of yours that are underwater ahead of a restructuring.
sir -- i'm trying to help you sir.
suit yourself. dilution is inbound. jps have dilution protection. commons are at risk of being wiped out of any material upside due to spspa liq pref exceeding the potential market cap of the companies.
learn the hard way.
Ah yes conversion rate and dilution rate. So the truth there is that we currently do not yet know the restructuring mechanics that the government will execute to monetize its investment in fannie and freddie. What we do know is that the government currently has warrants which it values at $3.5b and spspa which it values at $215b (a haircut to its liquidation preference).
So while we do not yet know the exact restructuring mechanics — in my view we can guess them from the government’s own valuation of its equity position. 7b shares from warrants at 50 cents is $3.5b so the math checks out there. Then it makes sense that the spspa converts into another 430b new common shares (valuing the common at 50 cents).
The government then has 437b shares. You and the rest of the common shareholders get to keep your ~2b shares. This does not even address the jps, but I think serves as a starting point for understanding why spspa conversion means that the commons are diluted out of any material potential upside and in fact may in all actuality be worth less — should this dilution be more significant than I am reverse engineering from the government’s balance sheet — noting that since the spspa is underwater the dilution mechanics could drive commons down below a penny in order for the government to extract every last penny it can for itself in this pending restructuring.
This is all hypothetical until it happens but the mechanics are there. This one does warrant exercise before spspa conversion.
This may be over your head. What do you think?
I believe it is your attitude as to why no one tries to keep you abreast with what is going on behind the scenes. That said I do appreciate the responses from the lawyers that you post when you are a non paying client of theirs — they still seem to take mercy on you and grace you with their thoughts and opinions—
Jps are not a speculative stock. You had an opportunity to argue with the facts or point out flawed assumptions — but you resorted to ad hominem attacks.
I challenge you to rise up to the challenge of actually putting together some thoughtful analysis. I will pay attention to what you have to say if you want to have a conversation over the facts. The least i can do. But you have to prove yourself capable.
Reverse engineering the valuations from how the government accounts for its equity valuation of fannie and freddie on its balance sheet.
This is a very sad take that is from ackmans outdated slide deck. Divide those prices by 100
Sorry to disappoint you but the common shares you think have upside — only have about the same upside as the jps ar best and with spspa conversion basically just get wiped
One is cheap. The other is arguably expensive given that the spspa is underwater
The warrants are 7b shares at 50 cents or $3.5b. The spspa is 430b shares or $215b at 50 cents. The warrants are insignificant compared to the spspa in terms of dilution.
the government has no mercy in that department. let them hope for years.
frankly they had some hope when there was more pending litigation... before lawsuits were lost.
certainly possible. spspa conversion could wipe them that low when maximizing the gov't interest.
nope, it is back to the en banc appeals court which is the only court that ruled favorably for us. it originally ruled that APA law makes the NWS illegal.
The damages model going to trial is a joke. The collins case is more interesting. But admin reform is even more interesting
I do not
You will learn the difference between 15 years of no change and 1 year of change
Not sure how that relates
fhfa is a political appointee. the president could fire whomever is in there and replace them with someone who would.
fhfa is not an independent agency according to scotus.
which makes the whole spspa a related party transaction frankly.
weird finance.
Does not matter. Can be extended. You must be a common shareholder to be asking questions that dont matter. Should be asking anout spspa conversion which effectively wipes your interests not completely but nearly as much. Good luck learning about this. The warrants may be 7b shares of dilution. The spspa would be like 430b shares. Maybe less. Maybe more. Turns the lights out on common shares.
Ive been saying for a long time commons have no security. People who own them when they can make 20x in jps just are not paying attention and are too busy doing who knows what
Mostly so far a relief rally from 6 months of largest stakeholder dumpage
Jps are gold. Common is a gamble without more upside. A fools bet if you will
You betcha. I know things
Well for your common shares it is most likely never.
Bernstein. It is going to happen well before your orange man
the chance for them to actually make some money will always be sell their commons and buy preferred --- until preferred goes up too much. commons have no security.
Jared seems like he does not understand capital structure or restructuring
None of them at present. They are still at a steep discount. But you are confusing price and value. Right now you can pay a low price for them and secure good value — face value
This concept might be lost on you if you cannot tell the difference. Also, if you own common shares you might not be able to learn the difference in time. Selection bias.
Smarter folks own jps