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Would that equate to Receivership for the GSEs?
Did anyone else receive Treble Damages today for owning Commons?
Still too many sellers at these prices. Not much Commons can do besides continue to ride the coattails of JPS lawsuits.
The market seems to be digesting the reality that Commons are quite possibly over-priced at current prices of roughly $2.
What happens if the first capital raise is at $1.50? Commons lose 25% overnight and that would be no bueno amigos.
Not only whining, but surely more lawsuits also.
"I demand a 100x + Treble Damages." Anything else results in a lawsuit for unfair treatment of Commons.
Price is still $2 five years later
Sounds like a SPS Conversion may be incoming. It makes the most sense if the Treasury really wants to maximize their returns on the GSEs.
Why settle for 79.9% of Common equity when they can have closer to 99%?
Ultimately, this might happen even with a positive SCOTUS ruling since this is one of the remedies that Collins has offered.
Scary to think Commons might actually be significantly over-priced at current prices.
Did Banks Pay Fair Returns to Taxpayers on the Troubled Asset Relief Program? | Cato Institute https://t.co/5V389iKM4N
— Mark Calabria (@MarkCalabria) September 30, 2020
That seems more like a Banana Republic, right? Maybe we are in one and didn't realize it. In which case, Commons are toast.
Makes you wonder if any Court resolution will help shareholders that aren't named in the lawsuit.
Definitely a scary thought for Commons, since they lack Contract Rights.
Could this all be resolved and somehow Commons are still left out to dry? No bueno amigos.
I'll let SCOTUS make that determination. If HERA says it's Legal, then it's Legal. Someone should've challenged HERA before the Statute of Limitations expired.
At this time, the damage is done. I'm only interested in moving forward.
The path forward is via a Jr. Preferred to Common Conversion.
CET-1 Capital is defined by Common equity and this is the most important factor for the GSE's release from Conservatorship.
Converting ~$33B in JPS to Commons adds $33B to CET-1. That's how it improves the capital position of each GSE.
No Conversion means the GSEs will need to sell an additional $33B in Common shares to make up for the CET-1 shortfall.
Thankfully, they won't have that choice to make. Calabria won't allow it as undercapitalized GSEs are a risk to our entire economy.
I'm hearing the first offering will be the equivalent of $1.50 (adjusted for the upcoming Reverse Split).
I'd wait to buy FNMA on the stock offering date. Who wants to pay 33% higher now when they can buy it that much cheaper in a few months?
JPS don't want Receivership. It can't be ruled-out though, and that's the reality we find ourselves in.
Just give us our Conversion and Commons can do all of the heavy lifting with the capital raise(s).
The Reverse Split will be pretty simple.
1:10 is what I'm hearing, although I wouldn't put it past Calabria to do 1:20 or maybe even 1:30.
Maybe they were watching out for Commons after all. Even though they owe no fiduciary duty, they felt obligated to tell Calabria.
"Hey Mark, this amount of capital raise is going to absolutely crush our Common shareholders, you sure you want to do this?"
Calabria answered that question at FSOC last week with a resounding "YES."
Sorry amigos, it's coming. And it's going to hurt!
Then they don't accept and the whole capital raise is trashed. Receivership is the alternative
Strange that Citi's Preferreds also stated this same thing. And yet, miraculously, they still converted to Commons at a very generous ratio.
Expect the same thing with Fannie & Freddie.
It's coming amigos!!
Exceptional FNMA Facts. Sticky please!
That's some fuzzy math, Jeddie. You're not adding the new shares into your Earnings Per Share number to justify your $120 share price.
Expect $4-7 as the end price of Commons. Then the 1:10 Reverse Split gets you to $40-70.
JPS are adding to their gains. Commons struggling, as usual.
But everyone already knows, the FNMA Pops are for Selling
It means Jr. Preferreds are highly undervalued
Sadly, we can't put a price on FNMA Commons since no one knows what the ending share count will be.
And if Calabria decides to further shrink the GSE's footprint, that means lower earnings and also a lower price target for Commons.
Those are low considering the 1:10 Reverse Split. But they're also quite realistic for FNMA.
Only if HERA allows the stealing. At this time, HERA only allows the Treasury to take all of the GSE's profits. The Treasury can't take it from other companies, yet.
Probably $20+ due to the 1:10 Reverse Split.
Great points. A JPS to Common Conversion harms no one and actually helps the GSEs significantly by creating ~$33B of CET-1 Capital out of thin air.
Commons won't have a case. Stating a lawsuit would occur over this is just more Common nonsense.
Excellent FNMA Facts. Can we sticky this?
After the 1:10 Reverse Split.
So probably late Q4 or early Q1 '21.
Big mistake! No bueno
$2 is a magnet for FNMA. 5 years later, it's still stuck there.
I keep hearing about a Dilution Solution from Mr. Mnuchin which will solve all of the GSE's problems.
As a Jr. Preferred holder, I endorse this plan whole heartedly.
It's coming amigos!!
It sounded like it might go up more than the 4% Calabria has already proposed.
4% already hurts FNMA Commons. Anything more and Commons will really be in a pickle.
Losing at SCOTUS would not create hype. It would cause absolute panic selling which will drive FNMA to sub-$1.
Considering Commons have already lost in Sweeney's Court of Claims, if they lose SCOTUS as well, it's time to throw in the towel.
A SCOTUS loss almost guarantees the Sr. Preferred Cramdown Plan, which obliterates Commons.
ROFL! Based on what logic would the price go up to $6 on a Gov win?
Maybe you meant $0.60? That's where FNMA is heading if Gov wins SCOTUS
It might hit $6 on the 1:10 Reverse Split after the SCOTUS loss.
FNMA does not see many Pops these days, mostly just Drops.
Commons keeps heading lower, down 10% this month already.
Probably going to fall a lot further heading into the Election.
Navy's posts are not helpful. I'm saving my dry powder for sub-$1.50
The Risks outweigh the Reward for the most part. Holding Commons for 5 years and having the stock not go anywhere is demoralizing.
Commons continue to be a Gamble and nothing more.
At this stage, Selling the Pop Because FNMA Always Drops is the best advice anyone can give.
Let's hope so. But what if they win?
Then are Commons worthless or is anyone else going to file a new lawsuit that can circumvent the Statute of Limitations?
Bove recommending the Jr. Preferreds again today.
It seems he's finally seen the light. Hallelujah!
Why is FNMA down 10% this month?
Agreed. Sell the Pops Because FNMA Always Drops