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Thank you for that. That assured me that pfd will see close to if not PAR.
From your own link, "according to the repurchase and cancellation of
the Preferred Shares Class (E) and amend some articles of the By-laws accordingly."
And with no news for the next month, Fannie will drip down to the dollar range.
16 more days til 1.00 and loading zone.
"Warrants are illegal and will never be exercized."
There has been no court decision to back up this claim, which is false. The primary motive for the government releasing F&F, is to monetize the warrants. They will spin it as a win for the taxpayer as the warrants are likely worth close to 100b
"Jr Preferred shares will be cancelled, now is the time to clean up the debt".
While your first statement was flat out wrong, "Warrants are illegal", your second statement goes against basic finance. If common shares are going to be worth anything, jr pfd shares have to be worth something since they are higher in the capital structure. If this was even remotely possible, every company would just cancel pfd shares to clean up their balance sheet and get rid of debt.
"Government owns 79.9% of the GSEs thus are entitled to 79.9% of the profits."
The government does not own 79.9%. They will once the warrants are exercised.
"The shareholders own the remainder and thus should be entitled to 20.1 % of the profits."
The common shares are not entitled to a dividend. It is up to discretion of the board whether they pay a common dividend after they pay the pfd dividend, which is obligated. During a recap, it is highly unlikely that the common shares will be receiving a dividend
Instead the government takes 100%.
Welcome to CONservatorship
It was just due process before the dismissal.
Well he is a potential replacement so you cannot rule his desire out.
His last bill before he retires, relates to killing F&F, what do you think he will do if he gets elected to FHFA. He is a potential replacement.
Waiting on a ruling.
If you listened to Jeb, who is a potential replacement for FHFA, he wants to give Ginnie the twin’s business.
He wants to repeal their charters and get rid of them. Once again, always better to be higher in the capital structure.
Timing has nothing to due with it.
You must be getting nervous about the 79.9% dilution from the warrants coming AND on top of that, the conversion dilution. Not only getting kicked in the nuts once, but twice.
“Realistically, I think early November. That’s right around the time they finalize the capital framework. This is the delay and likely why FHFA extended the timeline.”
This case has nothing to do with the delay.
“Either the Junior Preferred are cancelled or have a place in the capital structure.”
They have a place in the capital structure regardless, and it is above common. If jr pfds get cancelled, common is also cancelled.
“As a common equity holder only; I’m actually fine with the junior preferred having a place; if it’s possible to convert them all into one new big Preferred with a lower coupon rate. Just no conversion to common (which is NOT contractually possible per their circular offering).”
With the jr pfds holders being the ones with the vast majority of the lawsuits, any conversion would have to entice them enough. They can be converted with a 2/3 vote which is why the deal to convert to common will be enticing.
With 79.9% dilution coming with the warrants plus the additional conversion dilution, I would not feel entirely safe being 100% common as the dilution could be massive.
It is always safer to be higher in the capital structure and pfds are higher than common.
I was not impressed either. The lawyers fail to even mention key parts and the gov just pounds home their same defense that wins them every case.
Chalk another one up for the gov. Eyes on Sweeney (3-4 years minimum) and Lamberth. The courts are not the answer. Recap via warrants is.
Usually audio links are audio and video links are video.
He is very anti GSEs. Probably not yer best choice of a person to get information from.
Because making more than Apple and amazon has nothing to do with being reformed.
Include the Tweet next time please. life is good!!!
Did you listen to the panel yesterday, almost everyone was in favor of running the GSE business through Ginnie and repealing the charters for the twins. That would be horrible news, especially for commons.
It is barely enough to even begin a recap. Less than 10% of what is needed. The rest will come via dilution.
“Protect the taxpayer”
Because of actions that have been brought to court and the government wins every case.
The only motivation for an eventual release is the warrants so the gov can spin it as a nice pay day for themselves and still protecting the taxpayer since the twins have been reformed.
Don’t want to point out the obvious, but of course they did not spend 10 years discussing before the conservatorship.
They didn’t spend 6 years discussing the NWS because money was not needed to fund Obamacare and other parts of the government.
While everyone thinks it is as easy as just relaxing the twins, that would be a disaster given they have been depleted. They need to raise cash and the government needs their motivation (79.9% of the company) via the warrants.
Recap with no capital would be a horrible idea.
It’s more complicated than “just release us”.
Do you have a link yank?
Correct.
No, says Mnuchin, go watch his interview with Maria.
“When Bartiromo asked about allegations that the Obama Administration took money from Fannie and Freddie to pay for the implementation of ObamaCare, Mnuchin responded, “It is true. They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk.”
I think he would know best.
There is no escrow account. That theory is something crazier than Alex Jones would come up with.
The money has been used and spent. The government does not care about common share holders.
It will be another dismissal like every other suit. This will be an administrative recap and release. The only question is how much the dilution will be and how they raise capital.
There will be no new lawsuits challenging the warrants, which is the governments main incentive to release us.
Can you explain why now is different than the past 8 years that this has been said. TIA.
You are right. Administrative action will take place before. The gov knows what juicy documents she has seen and they are risking 500b.
Just a tweet? Not article?
That is pretty far fetched. If f&f issued new pfds, after being reformed and released, with a decent coupon rate, there would be plenty of buyers.
Saying there would be no buyers after these last 10 years is equal to saying “who in their right mind would buy the new common”.
There will be plenty of new buyers for both the p and c.
The same people buying common shares knowing they could be seized and rendered worthless for 10 years.
Statute of limitations for one.
Geee Buddy, you are on the wrong board. Need help finding the other board?
Did you even read his question? “After par” (3-5x current price) how far will you be dragged down after being converted to the dilution blood bath of the common shares.
Mass dilution (79.9%) is coming. The government needs an incentive to release the twins. They have been winning pretty much every court case. The warrants are the main motivation they have.
Well that spells doom for GSE holders. I thought we were getting a share price well into the hundreds?
Will you explain why?
It’s just another pump tactic. 0% chance of happening.
You are worse than CBS, Eva and stockprofitter combined.