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yeah this is something i wonder about myself. i do not really understand how fhfa is an independent agency anymore with the collins v yellen ruling.
how does one depedent agency (Fhfa) run an agreement (pspa) with another dependent agency (treasury)
weird times but i think we are on the way out of conservatorship and strongly believe that the biden white house NEC will get to work on this path in the coming months.
If gse prefs are worthless to common then common would have to get returns wildly exceeding the 20x preferred get if common are worth a single penny. Common would have to go to $100 plus or x200 here.
You would need to unwind the entire conservatorship. Good luck with that. I would put odds close to 0% especially with admin solution inbound
Being pessimistic is healthy and reasonable for predicting outcomes for common shares. They have no security. The government values its warrants at $3.5b on its last budget. No material upside
You are right that the odds are bleak to unfavorable for the cofc lawsuits going forward. But that is just my understanding. My view is all the lawsuits at this point are tough moving forward but admin reform under biden is the next major catalyst. Cheers to tuesday. Ill be watching the senate hearing
I am not saying commons are worthless
There is a space there. Worth less
If you end up making money on common shares it is because you got lucky at this point. Sad tragedy
And then you should be calculating if the spspa are going to get their full valuation in a restructuring and what value that leaves for existing common.
A subpar spspa outcome would imply common has no value.
Calabria in his book pointed out in his conversations with Mark Warner that he did not think the government could get full value for the spspa.
Not looking good for existing common. Psa
You know what you should be asking?
If the government values its warrants at $3.5b what are your common shares worth?
Source document: https://www.fiscal.treasury.gov/files/reports-statements/financial-report/2022/notes-to-the-financial-statements8.pdf
you want my view, the scotus not taking the appeal's court ruling in the cofc basically was the death knell in that court. bryndon likes to pretend his claims are alive and well and moving forward but my view is they are more on life support.
yeah i dont know. i did a test post, it seemed to work. maybe they suspended a different integration that i was not using for this wordpress. no clue
In your interpretation of the APA claims vs the Takings claims, the original thesis is that they both have merit but that at the very least the interpretation of the law should mean that one has a path forward. The idea being that either the NWS is illegal or it is a takings. Your interpretation is that it was always legal. Your interpretation does not reconcile with my interpretation of the law, but I have been wrong on all accounts.
Thus far, both have been dismissed or not taken up by the Supreme court with lower courts ruling in favor of the government.
Cheers on reviving your case which was dismissed by the appeals court and not taken up by SCOTUS. I wish you good luck.
Ackman is mortal. It is april now. Things are shaping up just like you predicted from your sources
My advice would be to hedge more
God speed good sir
You are supposed to say that mchenry is the guy who ordered the cbo recap and release plans.
Be sure to look at how treasury values its warrants. You can sort out stock price from there.
Fannie And Freddie's Conservatorship Exit Depends On Treasury's Call https://seekingalpha.com/article/4593795-fannie-freddie-conservatorship-exits-depends-on-treasury-call. Be sure to look at how Treasury values its warrants. Then figure the 80/20 to commons.
"In short, claims junior to the fulcrum security should receive no proceeds."
https://www.wallstreetprep.com/knowledge/fulcrum-security-primer-restructuring-and-distressed-debt-investing/
Keep advocating against JPS. You're arguing against yourself.
I submit to you that I have been wrong on time but not on substance.
This trade has evolved since even I started here. I started owning commons, like yourself, but what Calabria and Mnuchin did to the SPSPA --- combined with Calabria's book saying that a SPSPA liquidation preference writedown is illegal according to Treasury --- sets the stage for a SPSPA haircut, which Calabria had a tough time explaining to Sen. Warner.
The CBO's valuation estimates for the warrants were $100M when the SPSPA takes a haircut, which is a $0.01 valuation for common.
you do not seem to understand that when you're advocating against senior securities you're basically advocating for your own class of shares demise right? the image below should help explain it.. if you're up in a tree and you're sitting on a branch, you're going to hurt yourself if you cut between yourself and the tree holding you up... but that's precisely what you're doing when you write these posts.
if commons are worth anything at all, even a penny, preferred get par.
Common shareholders didnt really fight as hard as pfd have in court. That said power to bryndon fisher
You should study the conversion math given the size of the spspa and the current market cap. $1 is generous and more than they would need to give considering the spspa will be taking a haircut in the process.
Look at how those lawsuits have fared so far. It has been a disaster. What is left that has a chance only fights for JPS. Maybe you should study up. Good luck.
I am poorer now than when I started this trade. The market is up since then. 2014. Life happens.
I have been living with it since 2014 and I would have been better off doing basically anything differently. That said, for preferreds only (not common), now is an incredibly good time to be in this trade long term.
The grass has been greener on the other side
Quoting scripture will not protect common from being diluted. JPS have anti dilution protection. That is the main difference here. Common can and I expect will be diluted so that they do not have any windfall. Best case scenario is capped at $1.
You are right we are on the same team. The only way JPS are not worth par are if common get $0. So I hope commons get at least $0.00001. That way I see face value. So we are on the same side. I hope your shares are not worthless but realistically the security on these shares is much less than their current price making them worth less.
Keep posting it. Ackman is a clown show on the common shares here since 2021 deal that continued to pay nws pik that destroyed commons in the also pending restructuring that mnuchin set up.
You ready to get diluted? Shares capped at $1 best outcome or diluted with impunity and worth less than current price? I think you get capped at $1 or so myself
Holding the bag like a pro. Not a super full bag either. Common shareholders thinking their shares are worth more than $1 are in for disappointment
Give me a diluted or worth less or capped at $1 max outcome. Yay.
What SPS being paid in kind did was killed the common. The real question at this point is if the common will be capped or nearly wiped out. Regarding the commons, I think they will be capped, not wiped out. Maybe $1.
Yeah. Nothing has materially changed or come up that matters that i can talk about. Arkham on seekingalpha has been making comments that are 100% on the mark
Long read but wont change the outcome. Commons capped at $1 in this restructuring. Get yourself a better security
Did ypu read the part of calabria book where it says spspa conversion is the only legal way forward
His last gse update said six months. That is well before the next election. This one says 2023 in passing just a general update with 1 minute of gse chat.
This all jives with the Hindes timeframe.
congrats. good for you. it's april. we are getting into the zone of opportunity for when stuff should start happening for admin reform.. still waiting though for personnel.
i have lost money in this trade, yes, on a mark to market basis.
the rest of what you allege about me is untrue, ad hominum attacks.
you cannot stick to the facts here of the capital structure of these two companies.
all you ever do is insult me --- and i'm trying to help you understand capital structure in a restructuring.. i'm throwing you a life preserver and you're not taking it and we are 100 miles from shore and bro... lol you're insulting me from the water like a crazy person.
enjoy. as far as i'm concerned my attempt to help you for now is going to rest easy.. i gave it a shot but all you did was insult me..
we are april now. this is 11-12 months from when hindes talked to the white house official who said 12-18 months..
so.. here we go
if you were leveraged in your common shares that would be very unwise because they have no security. leverage is only recommended when you have assets to back that leverage that produce a return that exceeds the cost of the leverage. in this case some of the preferreds return is 20x right now whereas common is basically worthless.
i would not recommend buying common using leverage. but preferred on the other hand still make sense to do so --- all my opinion of course.
and it seems pretty obvious you don't understand debt or leverage, and think that it is evil or somehow misconstrues things..
you might not be aware that fannie and freddie borrow money? they borrow a lot of money.
if borrowing money is of concern maybe you should investigate why they are borrowing money and how possibly on earth your shares could be at risk in that scenario and maybe it will lead you to understanding capital structure a bit better because they borrowed equity capital from the US Treasury in the form of SPSPA and that will dilute your equity stake to smithereens.
Way to continue to ignore the capital structure here and instead go for an ad hominum attack.
I do not insult you. I insult your concept of financial upside in a equity security that has no security because of its place in a capital structure that is essentially 99%+ dilutable the way it currently is structured and according to the majority stakeholder — apparently it is illegal to not majorly dilute away YOUR interests.
I would like to see you develop an understanding about how a restructuring works where the spspa liq preference is more than the npv of discounted cash flows to the company.
The common shares you own are a horrible investment strategy— one that only a fool could stand behind and post about incessantly for years before getting wiped like a castle made of sand on the beach would be wiped away by a hurricane.