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$2.25. Big gains ahead! Washington Federal Loss Ignored. Seeking Alpha didn't post the Price Target, but this link has it:
https://www.streetinsider.com/dr/news.php?id=17099681
Thankfully our FNMA Fact Finder (kthomp) has arrived to inform everyone about how devastating the Washington Federal loss is.
Thanks kthomp!!
Bove will change tune with Washington Federal loss. Expect a downgrade again tomorrow.
Funny how the Washington Federal case being dismissed has been completely ignored by FNMA so far this afternoon.
Talk about irrational exuberance, LMAO!!
Bove upgraded to HOLD and $2.25 Price Target.
Not to mention, Sweeney Dismissed Washington Federal after market close. This is a HUGE loss for people who were holding out hope that the entire Conservatorship would be declared illegal (I'm looking at you Ano).
I would imagine FNMA tests $2 tomorrow.
Let's hope the bagholders Sold the Pop today knowing FNMA Always Drops
We just lost Washington Federal. Obviously not good for FNMA Commons
But this is a semi-win for Jr. Preferreds as it's one less case that needs to be settled in order to get our Conversion
https://twitter.com/HoldenWalker99/status/1281327372579594240?s=20
This was the clean-up conference. See you next term!
Admin action comes before that though. So maybe Treasury asked for this delay so they can do the Sr. Preferred Cramdown Plan and then get SCOTUS approval next year when they shoot down our APA Claims?
Gov't might settle. If they lose they're f*cked
Yep. And once people realize that if SCOTUS denies our APA Claims, then the Sr. Preferreds can be Converted to Commons if Treasury chooses to do so (which they may since they want to Fast Track the Recapitalization).
This is actually not good news for Commons as that decision will be made for us by the 9 SCOTUS Judges.
And once they rule, it's final -- no more appeals.
Commons' Clock is quite literally ticking now. T-minus 9 months, likely much sooner.
FNMA Pop Sellers coming out. Rally fading fast.
Thankfully my JPS gains more than offset the small Short position.
And I know that the irrational exuberance will quickly fade and we'll be back to the regular Common Nonsense
JPS are up more than Commons, as usual.
And once people realize that if SCOTUS denies APA Claims, they will realize the Sr. Preferreds can be Converted to Commons.
So much for "SPS and Warrants were Collateral" if that occurs.
No more lawsuits will be necessary as SCOTUS will have already ruled.
That's a very scary reality and it would be no bueno amigos : -(
Indeed. Although, it seems like irrational exuberance to me. Most legal scholars say this is a bad thing as it raises the APA question and if that's denied, then Treasury can surely Convert their Sr. Preferreds.
More uncertainty for us
Up 10% is down in what FNMA Fantasy world?
Cert Granted!! FNMA Alert
Looking forward to the afternoon sell-off. I need to cover my FNMA Shorts.
No one knows what they want out of SCOTUS, which means people are going to sell either way.
Ideal opportunity to cover my FNMA Shorts under $2
Consensus suggests any ruling will be bad for FNMA.
The Sellers are out in full force today due to the confusion.
We now have a Timber Alert for Commons.
What SCOTUS outcome do we want for FNMA?
It's important we figure this out now before the decision comes down.
It's not a good sign if we don't know what outcome we want. That almost guarantees a Sell the News event
In other words, FNMA needs to know what SCOTUS decision it wants now or FNMA is going to have a bad time...
FNMAS higher dollar volume and substantial gains.
The Common to JPS Conversion continues!
Sure. Just need to find a Lawyer that will accept FNMA shares as collateral.
We'll probably need ~10M shares since this will surely be a multi-year court battle costing $2-4M a year.
Lawyers aren't cheap amigos!
No Treble Damages and a Reverse Split. The dreaded double whammy for FNMA Commons
Now sprinkle on Warrants for 79.9% and that lowers expectations even further.
What happens if SCOTUS condones everything FHFA has done and Treasury Converts its Sr. Preferreds for Commons? That would be the crushing blow to us Average Joes.
FNMA is at the whim of the Admin. Courts will play no part in resolving this mess.
We will have to live with the cards we're going to be dealt.
Unless anyone wants to spend $100s of millions in legal fees to try to fight the Gov.
GES future is not in anyone’s hands here.
Looks like the MMs manipulated the price higher at the end of the day to give the illusion of buying interest in FNMA.
But we are too smart to be fooled by these shenanigans!! It's quite obvious the few remaining FNMA bagholders are selling and Converting their Commons to Jr. Preferreds.
Now that the FNMA Fantasy has been sucked out, the smart folks are able to see the forest for the trees and realize that buying JPS now makes you a Common holder later
FNMA Facts are starting to spread like wildfire, leaving many bagholders in its wake.
I imagine sub-$1 Commons can't be ruled out once the truth is known about the Sr. Preferreds and the Warrants.
#It'sComingAmigos
How else do the GSEs raise $100B in capital? Maybe if Carlos can guide them towards the Super Secret Escrow Fund they won't need to sell any Common stock.
That would be a miracle!
FHFA stepped into shareholder's shoes. This has been covered ad nauseam. The FHFA has all rights previous shareholders had and us little guys have nothing left -- well, Jr. Preferreds have Contract Rights which are being battled out in Lamberth's Court [2022].
But in reality, shareholders have no rights at this time as per HERA.
The Financial Advisors will be making their recommendations once the Capital Rule is finalized. We'll have to wait and see what they suggest.
I think if the GSEs were to issue new JPS, the yield would be closer to 3-3.5%.
But I don't see them issuing many new JPS since they don't count towards CET1. Unless of course they issue Convertible JPS, those could count towards CET1.
So we can assume the bulk of the re-IPO (share offering) will be via Common stock, which equates to significant dilution for existing Commons.
And, of course, we can't forget about those pesky Warrants for 79.9%
#It'sComingAmigos
I guess paying 5-7x the market interest rate is something that Commons look forward to.
Because to pay the Jr. Preferreds those exorbitant yields means Commons will see a much lower dividend as a good majority of the GSE's profits will be going to pay out ludicrous JPS Dividends.
Not to mention, the GSEs will need to dilute existing Commons by an additional $33B since JPS don't count towards CET1.
Amigos, we're in for a LONG road of heavy dilution. Selling the Pop (knowing FNMA Always Drops) seems like the best approach to take for the foreseeable future
Interesting. I guess the FHFA Director's own words don't mean much. And the seemingly ominous exemption of JPS from CET1 Capital (the most important capital classification) probably holds no weight either.
Yeah, it's probably nothing
I guess we need to bookmark this post along with Guido's prior post for the Conversion Day Celebration.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=155988267
The CET1 Capital Classification sure seems like a tell from Calabria that he will want the Jr. Preferreds to Convert to Commons.
He's basically saying, "Either JPS Convert to Commons or the GSEs will need to further dilute the existing Commons by another ~$33B."
FNMA needs to exit the OTC. The Shorts keep holding it back along with the Market Makers and evil Hedge Funds.
Commons can barely hold $2 even with all the "good news" we received this year.
When will FNMA's pain and suffering end?
Can we sticky this question?
Can we sticky this question?
These FNMA Facts need to be stickied for all to read.
We are blessed to have someone so knowledgeable in this trade that also shares the information publicly.
Thank you kthomp for your continued efforts to provide FNMA Facts!
if you were right that many other parts of HERA must be changed upon a ruling that FHFA's leadership structure is unconstitutional, why didn't the Fifth Circuit demand those changes?
Most will be happy getting Par, or Converted to Commons at ~Par.
Back-dividends would just be additional icing on an already sweet cake.
That's another benefit of owning Jr. Preferreds. Any Recap gets us Par, but the Courts could also provide additional gains
Waiting on the Courts is the American thing to do.
Us FNMA Longs will continue to wait for the Courts. Even if it takes another decade of appeals.
If they stretch this out beyond 2028, at the least the Warrants will disappear!
That's probably the best thing for Commons anyway.
8 More Years!!