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Are you anticipating FNMA to Reverse Split?
October 9th, 2020 (RS)
I was surprised to hear this as well. I don't think either of the GSEs are in a position to be buying back shares -- Commons or Jr. Preferred.
But it makes more sense than the Rumors of a GSE Merger
Rumor is Fannie is buying Freddie's Jr. Preferreds and vice versa.
Their Chief Investment Officers have told them to steer clear of Commons.
Not a recco
You would have to ask SCOTUS that question. My assumption is they saw enough differences in the structure of the CFPB vs FHFA that they wanted to review it in more detail.
However, assuming SCOTUS will overturn HERA or the Warrants is Common Nonsense.
The scary thing is, we don't even want SCOTUS to make Calabria removable At Will since that would throw a wrench into the Recap if Biden wins in November.
That looks like a lot of wishful thinking not grounded in FNMA Facts.
I wouldn't expect anything more out of SCOTUS other than to rule the same way they did in Seila and just make the FHFA Director removable At Will.
I like JPS as the most under-valued GSE issue.
Are you short Jr. Preferreds? No Bueno Amigo
LMAO! Did you even read the CBO Report?
Based on this:
I'm betting there's going to be a lot more Disappointment. Once Commons realize they'll be lucky to see $6 (pre-Reverse Split) and they see Jr. Preferreds getting 3x from current prices + any future Common gains, the Disappointment will run deep. As will the animosity towards JPS.
But believe me, Jr. Preferreds aren't going anywhere. They'll be present here as an every day reminder.
#It'sComingAmigos
Agreed, they're big on getting Sr. Preferred Redemption value. But if the FHFA & Financial Advisors were to decide that's the best way to Recap the GSEs, then they might as well do the Sr. Preferred Cramdown Plan instead.
It would be a straight line to Recap rather than doing it via a round-about. But now more than ever, it's clear that Commons face significant headwinds moving forward.
I imagine Commons sell-off tomorrow now that people have had a chance to digest this Report and realize how devastating things may end up being for Commons.
Reverse Split here we come! 9B Outstanding Shares will be reduced to less than 1B via a 10:1 Reverse Split.
Although once you factor in JPS Conversion, there will probably be 10B O/S and that'll make it an even 1 Billy O/S.
It's coming amigos!!
Receivership is back on the table! This is why FNMA Commons are having a rough day.
https://www.cbo.gov/publication/56511
That's a scary Report for Commons, especially coming from a Government Agency. It talks about selling Common shares just to repurchase Jr. Preferreds, but then also discusses throwing Commons under the bus via Receivership.
No Bueno Amigos
I typically re-buy my 0.01% Commons position if FNMA dips below $2. I'm happy with the 10% gains. It allows me to build my Jr. Preferred stack.
Commons are meant for trading. JPS are for investing.
Not a recco
Sold the last of my FNMA Commons today to buy more Jr. Preferreds. Never let a good FNMA Pop pass by without Selling.
Sell the Pop, FNMA Always Drops. Irrational Exuberance runs out of steam quickly, and then the FNMA Facts start to matter
Can you share the link to your Comments to the FHFA re: the Capital Rule Proposal? I'll bet it's one of these:
https://www.fhfa.gov//SupervisionRegulation/Rules/Pages/Comment-Detail.aspx?CommentId=15550
https://www.fhfa.gov//SupervisionRegulation/Rules/Pages/Comment-Detail.aspx?CommentId=15528
Those both seem like well-thought-out arguments similar to what you've expressed.
No Irrational Exuberance here. Slow and Steady FNMAS continues to win the race.
The Conversion to Commons is less than 11 months away. Probably much sooner than most are anticipating.
It's coming amigos!!
What will be hilarious is when JPS Convert to Commons and I still keep the Commons Cancelled moniker. That will be a constant reminder to all of the Average Joes that could've been in a much better position if they owned Jr. Preferreds now and ended up becoming FNMA Commons later via Conversion
So even when JPS Convert to Commons, I'll still keep this name and post about how my Vote matters
Not a recco
We should be glad the bell rang, otherwise FNMA would probably be back below $2.20 with all of the selling we were seeing at the end of the day.
I wonder if this means we'll see the Selling follow through into tomorrow's session?
You know what they say about the Irrational Exuberance and those FNMA Pops
Roman makes a lot of great points. I think he met with the FHFA earlier this summer also.
It's good to see the FNMA Facts being discussed at the FHFA.
I think most Jr. Preferreds would be happy with a Conversion to Commons at 150% of Par + a 10% discount.
Let's hope this isn't another Lower High for FNMA. We still have a ways to go ($2.75) before we break that stigma.
This might just be another irrational exuberance pop setting up the Short Sellers to get a great entry price.
We know Jr. Preferreds want Commons low for the upcoming Conversion. And Berkowitz and Paulson are actively shorting Commons to help their exchange rate.
It will be tough for FNMA to hold any meaningful gains with all of the pressure mounting. Not to mention there will be those that have finally learned to Sell the Pop knowing FNMA Always Drops.
JPS don't need $25M to move 8%, they can do it on $50,000
Who needs volume when the holders know what they own?
Can't say the same for FNMA. No one knows what'll be worth in the end. And it's possible it could end up lower than where it's now. Can't say the same for Jr. Preferreds
Agreed, bad for existing FNMA Commons since they're the ones that will take the brunt of the impact from the JPS Conversions.
In all other languages, Preferreds are mucho bueno amigo!
That's probably why they're green between 1-9% today also
Reminiscent of Irrational Exuberance more so than anything. There won't be a release from Conservatorship in January unless you're expecting the Sr. Preferred Cramdown Plan.
The Capital Raises at the earliest will be Q2 2021.
200-day Moving Average ahead. Buyer Beware. Pop-Sellers incoming!
Just wait for the price drop once people start Selling the Pop (knowing FNMA Always Drops). They'll be back
Informative post filled with FNMA Facts!
Did you read the part about Converting SPS to Commons?
I wouldn't call that Preferred BS, though. I don't think there's any Jr. Preferred BS, only FNMA Facts.
Hopefully the Treasury doesn't decide to Convert their Sr. Preferreds as that would be Mucho No Bueno for Commons.
Bold prediction. Does that mean we sell FNMA if it doesn't reach $2.50 by Tuesday end of day?
It sees that and still values FNMA at $2.15? That's not a good sign.
Was that it? Is the Boom over?
And not even up 1%. It makes you realize how utterly useless that information is.
There's always a Buyer and a Seller for every transaction.
When there's more Buyers than Sellers, the price goes up