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Where should we put our Stop-Losses at? I thought $1.50s were cheap. If we loaded the boat there or in the $1.40s, $1.30s or now in the $1.20s, do we keep riding this to sub-$1?
Those of us that listened to you need a technical analysis update please.
#WaitingToTradeNaked
Rough Day. Started on the lows, rebounded nicely, but then as word got out about Calabria's stance on Receivership, s#!t hit the fan and a few AJs threw in the towel.
We ended on the lows of the day with decent volume, almost at a new 52-week low to boot. It does not bode well heading into Friday, which are usually red anyway.
#New52WeekLowsTomorrow?
Common Sense goes out the window when they put the Twins in Conservatorship at a time when they had the most capital in the history of their existence.
Common Sense says they have a fraction of that amount of capital now and FHFA could easily justify Receivership.
Let's all use some Common Sense and stop thinking we are untouchable. FHFA and Treasury have had their way with the GSEs for the last 10 years.
#AnythingIsPossible
Bid stack looks thin. Expect a take down soon if the AJ's don't step up and Slap the Ask.
With Michael Bright and Mark Calabria as the front-runners for the FHFA Director role, things have never looked more bleak for the Commons' outlook. Hence the price.
It's no surprise Ackman hedged with Preferreds. I wonder at what point he taps out of Commons and Rotates entirely to Preferreds. He's down significantly already, at least 30%. Does he ride this down like he did with Valeant (VRX) or does he cut his losses before they magnify?
#PreferredsForAJP
Hardly. I made my points and stand by them. JPS are quite content with Calabria taking the job; however, i don't think Common shareholders will be nearly as excited. We will find out soon enough
The market will tell us what it thinks if Calabria gets the job. If we see Commons continue to drop in anticipation of this or if Commons take a 20+% hit upon the announcement, then we'll know for sure
Umm, yeah. We know Receivership is Calabria's intention:
"First, the elimination of Fannie and Freddie is essential. Given the ability to “run” the companies while in receivership, I would suggest to the Committee that an additional five years of conservatorship is unnecessary. A two-year lead would give FHFA more than sufficient time to prepare for a receivership."
https://financialservices.house.gov/uploadedfiles/hhrg-113-ba00-wstate-mcalabria-20130718.pdf
Triple Dip = Commons Cancelled. Let's hope not, but you absolutely cannot rule out this scenario. Especially considering Calabria might be on deck to be the next FHFA Director and we know Receivership has always been his intention.
FHFA used accounting gimmicks before, will they use them again to justify Receivership?
#AverageJoesForMoelis
The Government could basically triple-dip via the following: 1) They made 10% interest on their investment, 2) Exercise the Warrants (~$100B), and then 3) Redeem the Sr. Preferreds for another $100B.
Everything will need to fall into place for the Common thesis to play out. I don't see everything, maybe parts of it ... so Jr. Preferreds are clearly the better and safer investment based on this alone. Not to mention the recap scenarios which will cripple Commons even further (if it even happens!).
#RIPCommons
If Sr. Preferred declared paid off, then JPS are winners in any wind-down scenario. Declaring the Sr. Preferred paid off is still a big if, and it should absolutely terrify any Common shareholders.
Calabria = Receivership. Bright = Ginnie Takeover. Ackman=No
So who's left? We need a Mnuchin appointee to help rollout Moelis.
Resolution needs to be near-term before the next downturn. Commons are petrified, literally shaking in their boots. Price is nearing the dip to sub-$1 which I called for at $1.90.
Time to do something; otherwise, the Common thesis can be officially declared dead.
#RIPCommons
Someone mentioned Ackman as a highly likely candidate for FHFA Director.
It would make perfect sense! Ackman can roll out The Average Joe Plan so his Common shares are valued at $1,000+
Everyone wins in this scenario, Preferreds more than Commons still
Maybe Ackman will take the FHFA Director job. Since he didn't take the Fannie Mae CEO job, he's a shoe-in for FHFA Director.
JPS would need reassurance Warrants get executed before Junior Preferreds convert to Commons. That would need to be agreed upon; otherwise, the lawsuits will continue through the courts, which is likely not something Treasury/FHFA want to have happen in light of Lamberth's ruling and Sweeney's upcoming Motion to Dismiss ruling occurring sometime in mid-2019.
The SEC replied stating the Warrants are Legal. Their exact reply was:
"Warrants can be offered at any time and at any price, as long as the board of directors approves of the offering and as long as the offering is filed with the SEC before the funds are raised. We cannot comment directly on individual instances, but the above holds true for all publicly traded companies."
This differs significantly from NSFraudbuster's SEC Letter. I wonder whose response is accurate.
Makes perfect sense considering Admin needs funding for their plans. The Government Warrants will surely be another golden egg. Trump wins, shareholders win less but still win
Mostly vague, general information everyone already knows about. Is there something specific in that 50-page book that you would like to highlight, or are you just grasping at straws? We know most of the AJ prophets are biased against Preferreds; however, we also know most of them are uneducated in Finance and Share Structure. I will illustrate below:
Finance 101: Preferreds > Commons.
Fannie & Freddie are not incorporated in Indiana. This information is irrelevant
Since it's from a no-name website, it's likely an error on the author's part. Everywhere else you look will show BlackRock's official stance -- they advise against recap/release and suggest the Government keeps the GSEs in Conservatorship.
You're mixing up BlackRock and Blackstone, big mistake! BlackRock absolutely hates the GSEs. Blackstone absolutely loves them. Fannie's interim CEO is from BlackRock. Yikes!
https://www.bloomberg.com/news/articles/2017-05-05/blackrock-says-don-t-recap-and-release-fannie-and-freddie
https://www.bloomberg.com/news/articles/2017-06-01/paulson-blackstone-said-to-back-plan-for-freeing-fannie-freddie
What happened to Ackman becoming the new CEO? This is a huge disappointment considering he's an ex-BlackRock guy that likely wants to destroy F&F.
I wonder if this is the reason shares had that panic selling dip earlier today. Without Ackman at the helm, who will implement the AJP?
Debt can only be cancelled via a Bankruptcy. Are you proposing they run the GSEs through Receivership to cancel this so-called Junk Debt (JPS)? Otherwise, there's no other way to cancel debt other than paying it off in full. Be careful what you wish for, Moelis might include Receivership in their updated plan
Preferreds do have a vote, and it's the all-important 2/3rd's vote. No changes can be made to any Preferred Series without a 2/3rds vote from that Series approving it. Even in Conservatorship, Preferreds maintain this right. It's a Contract, which can't be broken, as per Lamberth.
By "Cancel" I assume you mean "Redeem," which is quite challenging when the companies don't have any Capital.
roll them into a single new P share with an IPO and raise $200B with a 5% divvy
You're right. It's likely to be worse than what was originally proposed, especially now that we're ~1.5 years behind the original Moelis plan.
That means more capital will need to be raised in a shorter time frame.
Realism is often mistaken for Pessimism by biased individuals. Not everyone has an agenda, some just like to keep things grounded in reality (Commons could see $5-7) versus pie-in-the-sky dreams (Commons will see $100+).
And if saying a stock ONLY has ~5x potential up-side is angry/sadistic, I would hate to see what saying $FNMA is going to be sub-$1 before it ever sees $2+ again would yield.
#PreferredsForAJP
It's coming, hence the anticipatory selling we're witnessing right now. How much dilution is the question -- $100B? ~$17B Jr. Preferreds Converted to Commons? Only Mnuchin knows the answer.
How the GSEs recapitalize has always been the unknown for Commons. It's really anyone's guess at this point, although we have seen some foreshadowing of what's likely to come. And most of it ain't pretty for existing Common shareholders. JPS Conversions, issuing new Preferreds, and even selling more Commons all seem likely at this time -- and don't forget the Warrants, that's practically guaranteed!
Whatever they decide to do is going to be swift. Similar to Paulson's comments, "the first sound they will hear is their heads hitting the floor." That will be what they say about the Common dilution after it occurs.
HELP! My boat is fully loaded, yet price keeps drippin'. What should I do!?
The lemmings loaded the cheapies ($1.50s, $1.40s, and $1.30s) and are now bag-holding and wondering what to do.
Wait until tax-loss selling season arrives, sub-$1 will surely be "cheap" by most standards. But what if Analyst's Price Target of $0.01 comes true, then what??
#FNMAKeepsDrippin
Drip, Drip. Came thru Drippin'. FNMA keeps drippin' ... $1.20s on deck.
Several Preferred holders kept warning about the nightmare that is Common GSE stock. Yet all that I read for months was non-stop claims of $100+ ... how's that working out for the AJs?
Let's get on with the recap and stop worrying about how it hurts the Commons. At this point, Commons should be praying for any Plan to stop the bleeding.
#AverageJoesForMoelis
I agree, it doesn't seem fair. But in the bigger context, it recognizes and rewards share structure where it is due (Preferreds > Commons). But Commons are surely headed to $100+ and people bought them for ~$0.20, so that certainly wouldn't be fair either.
Not to mention, the Banks that held AIG Preferred shares got much more favorable Preferred-to-Common Conversion terms than the retail Average Joe's holding AIG Preferreds. That surely wasn't fair, yet no lawsuits were ever brought against anyone.
How can the same Preferred be worth more depending on who holds it? I'm still scratching my head on that one. I wonder if Paulson gets Par while everyone else has to settle for 80% of Par Value.
#MakesYouGoHmmmm
We should really be thankful for the $1.30s if the $1.50s were a gift. How low will she go? Can you provide an update your exceptional technical charting advice for us?
Bear flag has officially broke down, and on above average volume (which seems to verify this break-down). Maybe FNMA catches a small bounce in the $1.20s, but it will be short-lived.
#SellAllRallies
They were, and it's too late to challenge now. Exercising the Warrants doesn't reset the statute of limitations, no matter how many AJs complain about them on message boards and social media.
Not to mention, the Boards of Directors signed off on the agreement. Warrants getting exercised is baked in at this point. Anyone claiming otherwise is delusional.
Should I sticky it for easier reference?
#100BillionCommonDilutionIncoming
Considering all the dilution forthcoming, Shorts aren't scared. There is no short squeeze anywhere in sight. Sorry to be the bearer of bad news
#AverageJoesForMoelis
It's always good to see realistic posts here
Do we just ride this to sub-$1 if our boat is already loaded? Should we sell now, take the tax-loss, and then buy Freddie Commons instead? They're going to $100+ also as per The AJP, right?!
They're trading their 5,000-10,000 shares every $0.10 move all while encouraging the lemmings to keep holding for $100+
If Commons get Cancelled, will you cover his debt?
$1.20s next week? Consensus says Yes!
Expect uplisting, the 3Rs, share buybacks, Yahoo Finance updates, and all the other AJ Pumper Garbage to be out in full effect this weekend.
Waterfall crash in 3, 2, 1 ... $0.01 Price Target incoming!