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Why be optimistic that we are being offered the chance to plead that the only win we have seen so far is not taken away? Best possible outcome is we have what we had last year - worst is we get zilch.
Did I miss something that is positive for fannie and freddie?
When someone serves me and says "see you in court" to me that is not a win.
I think 5-months is optimistic. As slow as the courts go - I wouldn't expect anything that might move these stocks up until spring at best.
A delay is a win for Treasury. Yesterday was a huge loss - had they remanded back to the 5th it would have been a win. Now it's 50-50 that we ever get something. The court wouldn't have taken the case if they didn't think the Treasury's arguments had merit.
The other downside is the expected win for Biden. Democrats will turn fannie and freddie into nonprofit companies for the benefit of low income homeowners. With no future profits, ending the sweep won't matter.
My plan is to try to reduce my holdings 50% by the election. Yeah - I may fall out of that 100K share club. But I WILL buy back after all the bad news is in. Probably around Biden's inauguration. Maybe buy back at 1/3 the price - giving me triple the shares. Probably buy back in with a bias towards juniors since those won't require profits to go up.
Congrats ALONG4ZRIDE!
GO F&F!!!!
Still waiting for a serious move. So much other pharmacy news these days this is not getting much attention from the media or from investors.
Will F&F earn_same 10%_interest on overpayment as Treasury was charging them for the original bailout? With a negative balance due at 10% interest that should increase the amount owed to F&F.
Or - can F&F do the same and take all of the net worth of the US government? All of those national parks, forests and monuments must be worth a lot. Whitehouse is new F&F HQ?
Thanks - that helps a lot!
My cr@ppy broker (Schwab) doesn't often give news on lightly traded stocks like this so I had not seen that yet.
If I'm reading this right Akorn sold a piece of the company located in India for $10 million. I'm not sure if the market was happy about how this increases their cash flow, or thinking it adds $10 million to their value. This amount is only 7.5 cents per share, so I'm betting it's just a sign of maybe more good news to come?
Given the lack of news on this company we can just wait and see...
I'm surprised nobody on this board knows why this stock went up. Usually someone in the know lurks on these boards.
I actually cancelled my sell for $.20 this morning pre-market due to last night's research making me believe the real value of this company is closer to two to three bucks. I did recently buy a bunch at $.08 that I'll probably sell some of at $.54 on Monday if it gets there - since that's my break-even price. Yeah some of my shares I paid $3.56 for. Oops.
I've only been long Chesapeake since early 2018, so don't know a lot of their history. And sadly during the recent run-up I didn't sell as many shares as I should have. I exited this stock with a net loss - mostly due to those 2018 and 2019 shares.
I'm not sure the talk about amateurs playing in these bankrupt companies is justified though. There very often is residual value in these, although there is no way Chesapeake was worth more than $20 in the last few weeks, so that was a strange pop. Yeah and Hertz... well... very smart to sell more shares though.
I probably will buy back those shares after it drops below a buck and after the 30-day wash rule expires.
I don't think their assets are shown with excess value on their balance sheet. But I do wish there was an accounting of what all is in that accumulated deficit. I assume it's investor money, but why doesn't it show up as a bond or a preferred share or private stock or an outstanding liability? Same thing going on with fannie and freddie.
I do find myself attracted to companies in distress... sometimes it results in a loss.
Best I have to go on is their most recent quarterly report. In that it lists total debt and liabilities as $9.5B and total assets as $35B.
But then there's accumulated deficit. That is a negative $29B bringing net assets to just $5.8B.
So subtract $9.5B from $5.8B leaves a net amount to potentially be distributed to shareholders in a liquidation as negative $3.2B.
Luckily they don't charge shareholders so we can feel happy to walk away with $0.00 per share I guess.
I never understood accumulated deficit and I suppose I never will, but given how big that number is ($29B) it does seem it must be somehow real or they wouldn't put it on the report.
Given this I'm zeroing out my holdings and will probably buy back when it falls below a buck. Who knows maybe the accumulated deficit isn't really in line to get assets in liquidation.
Has anyone seen a reputable analysis of the value of the assets of Chesapeake? It seems everyone agrees their debt is around $9B - but what would their assets be worth in liquidation? Does that $9B figure include preferred stock?
I've been trying to dig out this info but everyone is so obsessed with their debt and operating losses I can't weed out a true shareholder value. I have to believe the value of their assets has gone up quite a bit in recent weeks along with the price of oil/gas.
Weird thing is I sold some Freddie yesterday at 2.74, but that price was higher than the high for the day according to Schwab. Maybe they just look at prices once per minute? It was a limit order. Weird.
Clinuvel is making a bumpy, but steady climb... but to where?
Don't forget to include all junior preferred - and to multiply by the relative price difference between the common shares and the juniors.
Strangely - the dollar volume of commons and juniors might be similar, although there's no financial reason that should be true or mean anything. What matters is how it shifts on a daily or monthly basis.
Its the normal churn of investments. Moving back and forth from cash to securities. When you have over $3T invested and have an approximate 1% churn rate you would expect cash to flow in/out at the rate of about $30B per month.
But it's not really their cash. It's just money waiting to move into more mortgage related securities. I think some who had not previously noticed this got excited when it appeared Fannie and Freddie had much more cash than they had net worth.
The writedowns are better than retained_earnings!
With retained earnings their capitalization goes up, but F&F have to increase liquidation preference by an equal amount.
With a writedown they also get to increase capitalization by retaining earnings, but they do not need to increase the senior liquidation preference. WIN!
I'm no longer making the forbearance problem worse since I already have all 8 of my mortgages in forbearance. Next question is how many get extended past the automatic 3 months? And how many move on to a full loan modification?
What if any impact would this have on fannie and freddie?
If the courts would get moving - hopefully I can use my f&f shares to pay off all of these mortgages.
Interesting that report had a column for "CLASS". Every single one was class 21. If everyone was in the same class they wouldn't have bothered to add that column on the report.
Is there a separate report for class 22 or other classes?
Next real resistance is SCOTUS. Assuming we can break through that barrier the next upside resistance is back with the lower courts.
Obvious downside risks are a negative SCOTUS outcome, or Warren as VP choice.
Lots of volatility in the future!
Now is perfect time to fix F&F. Between the bailouts and the buydowns, the Treasury has spent over $6,000 Billion dollars ($6T) in the last few weeks. Forgiving a measly $200B for F&F right now would disappear into the background noise. Nobody would give it a second thought. Wouldn't be on the news.
My guess is they will forgive the seniors and warrants and give F&F enough cash to be released without them doing any sort of IPO. Probably in the next month or two. Should raise the common share price by $50 per share or so. Long before the end of the year or the election.
I'm not sure why people get so excited about converting preferred to common. In some cases that's built into a preferred share's contract as an incentive to buy at a lower interest rate, but doing it after the fact like this is really meaningless.
I would likely just sell my preferred before the conversion date since I wouldn't want so much in one stock. The market should price the preferred at the same price as the underlying stock.
A conversion is three transactions:
1. An IPO of new shares
2. A redemption of the preferred shares
3. A purchase of those IPO shares
For tax reasons I'd rather just sell, then decide later if I want to buy more common shares.
But yes - converting shares is a way to recapitalize by diluting commons with the new shares. Recapitalizing by issuing new preferred protects the common share prices, but is slower and eats into profits.
I realize the other option is to just sit in conservatorship until they retain enough profits. That would be great for commons, bad for preferred. That's why I bet most preferred holders would only ask for a small amount above par. It'll be a game of chicken.
It's also why I try to keep balanced with 50% common, 50% preferred. As has been said - the upside for preferred is probably just 4x current prices, but the common upside could be 10-30x. Or zero with full dilution.
Reality says that the common shares will have limited upside as long as they don't pay dividends. They must pay preferred dividends before commons can get any. Most all juniors are at much higher than current interest rates. My FMCKJ pay a minimum of 7.875%. They will want to liquidate those ASAP and replace them with new preferred shares at much lower rates.
But they can only pay off the juniors on (in the case of these) the 5 year anniversary. For FMCKJ the next redemption date is December 31, 2022. If they want to offer dividends and not pay that high rate they will have to get junior preferred to agree to a buyout. Probably something like face value plus 1-3 years of interest depending on each series' redemption date.
The board's hands will be fairly tied until the Preferred are offered something. So that first board meeting - the first order of business will be to get a vote from junior preferred shareholders.
Or they do nothing and they can't do any capital raises - which actually would be good for commons with the NWS ended and seniors deemed paid off. Just stay in conservatorship until they save up enough profits. No dilution to commons - stock price rises $10/year for a few years.
Why_do people think Preferred_shares can't vote? They can for sure vote on any change to the terms of their shares.
From my FMCKJ agreement under "Amendments" it says:
Otherwise, we may amend the Certificate of Designation only with the consent of the holders of at least two-thirds of the outstanding shares of Preferred Stock. On matters requiring consent, each holder will be entitled to one vote per share.
Sound familiar? [Wells_Fargo] is being required to turn over profits from these programs to the US Treasury Department or to nonprofits approved by the Fed or to the US Treasury.
Hmm... treasury requiring a financial institution to turn over all future profits to them (or a charity). This is related to their lending of PPP money...
https://abc17news.com/news/money/2020/04/08/what-small-businesses-need-to-know-about-the-governments-new-forgivable-loan-program/
I'm requesting forbearance from FNMA because my sole proprietorship will have zero income until social distancing ends. We will see what they say.
Today I applied for forbearance on two FNMA loans I have. I'll let you know how it goes, but their first available appointment with a loan officer is April 13th... I tried to get an earlier date by saying I was a stockholder, but I think that just gave me more reason to need forbearance.
My understanding is you might get to delay some mortgage payments and essentially add them to the end of your loan. Interest continues to accrue.
Any idea why it's up more than most other stocks today?
Anyone wanna buy my Q escrows?
Note that Sweeney is allowing appearance via telephone so nobody can say they want a delay due to the Corona Virus.
Smart.
Better news is they can't even think about any kind of capital raise until these companies are released and have a predictable business model. That means the gov't has to clearly say what the charter will be going forward. Any reform has to be either completed or completely taken off the table.
We know none of this will happen prior to 2021. Then figure 2 years of arguing about it - another election. More nothing.
In the meantime F&F will continue retaining $30B per year. By the time anything is decided they will have retained over $120B. So even without any help from the courts - these companies won't need much capital raised.
If the courts rule in favor of f&f - that will add somewhere between $50 and $200B to their capital. That will completely eliminate any need for a capital raise. We know the additions to the liquidation preference from their retaining earnings will be backed out for sure.
Bottom line - there will not be a capital raise. However that $30 may still be diluted 80% by the exercise of the warrants - so figure $6.
I think the mortality rate is more like 1%. Remember that the deaths get attention, the people home with "the flu" don't.
If the entire US population got the virus and 1% died - that would only take 1% off of GDP. Probably less since many who die will have been retired or not working yet.
Bottom line - this will have a smaller effect than say a 1 week shutdown of business which would be a 2% reduction in GDP.
So stop worrying!
The impact on housing will be even less. As I said most victims are not in the prime home buying age bracket. Maybe a good time to rotate into Service Corporation (SCI) though.
1. It is over
2. They did pay - and got out.
3. It's old and dead.
4. We already got paid.
It seems the price of this stock is falling along with all others due to the pending pandemic. I'm having trouble finding the correlation between this stock and the Corona Virus.
I can speculate - maybe people think the insurance companies will suffer from losses due to medical expenses due to the virus and cut back on spending for drugs that simply improve quality of life?
Maybe people are selling anything - even the good stocks - to cover losses elsewhere?
Maybe people don't know what this company does?
If anyone has any insight as to why this stock is falling, and what might reverse it - I'm curious. In the meantime I just keep buying more.
We know there is a LOT of money coming because it is so well hidden. They wouldn't try so hard to hide it if it wasn't tens of billions.
The more we hear nothing - the more we should all expect to get!!!!
Ka-ching! shhhhh....!!!!!!