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Its not that we are pushing it. We are just explaining to the fools on this board what is going to happen in an attempt to help a brother and sister out before it is too late. We pity the fool.
Well, you have the correct summary notes. Dont let the 20x in jps hit you on the way out. Forget about the insecure commons
that's not true; only common
pfd survive and thrive with spspa conversion
learn your place in the capital structure... in this capital structure, it's basically nothing.
sell your commons and buy preferred
that was cool until mnuchin and calabria turned the nws to pik to drown out the whines of ackman -- which is now up another $100B of liquidation preference (the now net worth of the gses).
by the way that's a great quote from him thanks for sharing.
his angle is just to talk the truth, if you don't like it, tough
So why do you own commons if thats not going to happen?
5 cents seems like a fair valuation. I am curious how low they shake out. I, like you, see no material upside. What still confuses me is that Ackman still owns them. Is he an idiot? Why hasnt he cut his exposure to them? He should fire someone because of this. Someone on his team should have restructuring experience. The fact he is on the wrong side post 2021 PIK common wipedown plan is fascinating to me — but he does only have a 1% position. But even that is too much of a security that has no security especially after dropping his litigation
For me it is simpler. Commons have no security and their lawsuits have been shredded by the courts and so the only path left forward is spspa conversion. Commons are screwed. Sad to say. That is what the facts say. If you are mad, fine. But being mad wont change it. Come to grips with reality and plan accordingly.
And i am being nice to anyone who owns commons by giving them a heads up. Hey guys you are in for nothing amazing, but if you switch to jps, there is 20x. Get on the right side of history.
Smart man. Tides are turning
Commons are limited liability. Worst case is $0 not owing money. Thats a big difference between now and 1929 when bk companies went after their stockholders
The conservatorship will be over by then
yep, this is admin action. sandra thompson will be the last conservator.
commons have no security --- the courts fell on their swords that were supposed to protect shareholder rights.
Bullish for jps
It is funny that you point out this as a point missed by legacy commons. The main point missed by legacy commons is their shares do not offer dilution protection and the government’s spspa liquidation preference exceeds the historical earnings based market capitalization of the companies — which are still undercapitalized. And then there are warrants as well. The common shares thus have no security and only a fool would own them or buy them. So— when talking about common shareholders you have to realize that they do not even understand this— so there is no hope for them to understand the finer points, like yours, that the jps are carried on the balance sheets at face value.
Fair point. I dont know what to expect for common share outcomes. I think around $0.50 seems reasonable to expect based on the government accounting for its balance sheet
$0.001 to $1. Anything higher than the current price is an unnecessary gift by the government to try to help the recap restructuring move along
I would add that the spspa is an equity instrument, not a debt instrument. Changes the calculus a bit for all the tards on this board. Spspa goes up means net worth goes up means probability of receivership goes down and at these levels of capital is near zero.
Well said! More people on this board should listen to you. Yes, JPS and Commons are underwater.
The difference is dilution protection.
Commons can be diluted in any recap outside of receivership down to sub $0.01 by new common shares being issued to the government.
In receivership, jps can get screwed too.
But outside of receivership the government cannot touch jps. Jps dont need to do anything. Jps can just sit on their shares and if commons ever resume dividends then jps dividends have to resume
That is the leverage and anti dilution protection of the jps. You dont seem to understand that but you do understand that the government will not get full value on their spspa and it is a haircut scenario. Common is effectively doomed.
Hope this helps. Review the cbo report.
In receivership the government can wipe jps and commons absent court intervention. But these companies have retained more money than ever in history and the spspa is yuuuge
They can convert the spspa and exercise the warrants and effectively wipe their butts with the common shareholders. But they cant do anything to jps unless they flush the toilet with receivership
Any statement to the contrary is just a misinformed sad poster beligerantly spouting nonsense — and they likely will just miss out on this one
It is you who are deceiving yourself and others
if he was confident commons had any material value he would probably have a 100-1000x larger position.
but sure, good for you.
who the heck knows. commons are a terrible gamble with no real upside
Might also not understand how capital structure position matters in the face of this restructuring. Who knows if he holds preferreds and if so how much
Lol. Yeah in your dreams. Little to No chance in reality
Its not ill will to common. Its reality
Not really. It isnt jps va common fighting. It is kind hearted capital structure aware folks trying to help out people who understand the wrong that has occured here but seem unable to fully appreciate the ever increasing spspa liquidation preference and the weight it carries and weighs heading into an eventual restructuring and how many common shares it will convert into and what that means for people who are unfamiliar with how to value equities based on share counts and earnings multiples.
Good slides. This litigation is the ultimate disappointment in terms of the government fighting us to present evidence of their wrong doing that was produced by discovery to jurors. It is like they are blocking us from showing evidence they lied and they know they lied. Very disappointing court process. Plus they limited the damages model — hope they reopen that for something material.
Again this is a buying opportunity for the capital structure competent
They got close. And they did put them on track via retained earnings
As if hera 2008 isnt enough
Wishing you dont get spspa steamrolled flattened crushed hopes and dreams. Hope your net worth portfolio is less that 25% commons. Be like ackman. Closer to 1%
the legal rulings have gone relatively poorly so far in so far as forcing an outcome that follows the spirit of the law. next week begins the third month of a 6 month window for admin reform according to a white house official april 2022.
all at once. not piecemeal.
you continue to interpret this like him owning so many shares that are nothing to him is meaningful to him. he is capital structure clueless, like someone else who goes by
you're asking the wrong questions. but i think the answer is the price is like $0.00001 or maybe less
right well, the writing was on the wall there in that scenario, the securities they were buying had that deficiency... many people identified that as an extreme weakness saying that they would not fare well and were not what they claimed to be..
sometimes in restructurings people learn the hard way
that isn't a substitute for owning commons now, which is just bone headed.
Yep. The big seller continues to weigh on the price. Good for people who are still accumulating along the long and winding road. Bad for people who do not understand how to capitalize and calculate valuations across different securities and shy away from falling prices in undervalued securities or celebrate lower prices and falling prices in more senior parts of the capital structure that they own heading into a restructuring
They probably moved down. Lower prices on nearly all jps series. Long term value remains par — whereas commons have no value. Good tidings
Yessir. And i hope you have more than just common shares to your name although walking away from this in your case with a couple hundred thousand dollars in restructured commons if they get $0.50 wouldn’t be so bad. Hoping for the best for you but trying to at least help you make an informed decision you wont regret.
Tomorrow should be interesting. Patrick McHenry is the one who originally requested the cbo report about the effects of recapitalizing fannie and freddie to begin with. He is the chairman of the meeting tomorrow.
Sandra thompsons notes paint a pretty clear picture that the us treasury is retarding fannie and freddie’s ability to better all americans and protect taxpayers.
At the very least some good grandstanding
Is gse common shares the only thing you own? Do you have other accounts or retirement plans? One would hope.
no, of course not. if in that hypothetical example they reverse split 100:1 then the price is $50/share... which is what they'd be offered to the market at. just hypothetically of course.