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Don't just look at price. What matters is market cap.
Uber market cap is $67B compared to FNMA market cap of $3.4B
So if FNMA should be worth 4x Uber then fannie's market cap should be $268B or about $231 per share.
But hard to compare a profit of $4B vs a LOSS of $1B. I'd say the profit is 10 times better - so FNMA should be $2,300 per share.
Keep in mind it's just possible Uber is over priced...
Help me decide whether to rotate into commons.
Lately my juniors are trading at close to 50% of par. So the maximum upside in the best case is a double from here.
My commons are around $3. Many predictions - even including execution of the warrants and dilution from capital raises suggests common stock could end up between $6 and $15.
At the bear case for commons - they double from here. Same as juniors. But the more likely number is $12-$15 - a quadruple or better.
So if in the worst case commons end up the same as junior preferred - and in the likely case they end up with quadruple the profit - should I rotate into commons? I have been split 50-50 between common and preferred, although lately due to price changes I'm kinda overweight junior preferred.
I usually hear the term "Secondary IPO" when a company issues an additional round of shares to raise cash. It would be nice if people would use more specific terms to avoid confusion. The three most common "IPO's" are:
Secondary IPO of existing stock. Company just declares a bunch of new stock suddenly exists, and sells it. It is not directly dilutive to stock price since the cash is "Owned" partially by existing shareholders, but it is dilutive to earnings per share since now we have more shares. The lower EPS will decrease the part of the share price based on earnings or dividends per share so in the end stock price will drop some.
IPO of a new class of stock. Like FNMA class B. Not generally dilutive to stock price since again the cash is "owned" by shareholders, but may or may not dilute EPS and PE based value depending on the rights that class has. Might have right to be converted to common, or to preferred, or a dividend free stock, or non-voting... many options here.
IPO of a new stock that replaces existing stock. Think AIG when they came out with AIG.new shares. Old shares converted to new shares, but not 1:1. This may or may not be dilutive to earnings depending on ratio. Not that different from a secondary IPO, but it clears the books on old suits and may in effect be a big reverse split. So if we assume that there will be 30 billion shares of FNMA when all is done, that would mean a pretty low price per share. A new stock with just 1 Billion shares may keep price high enough that it can be listed on all exchanges, and be bought by all funds. (not a penny stock)
I would expect any change that converts existing shares will have to be approved by all shareholders first. Like AIG. Otherwise the suits will go on another decade. If the deal is sweet enough for existing shareholders we will approve it.
Warrants and senior preferred are two different things.
The senior preferred are why they still need to pay Treasury almost 200B.
The warrants are a profit-sharing agreement, where whatever value f&f have after the conservatorship - Treasury gets just under 80% of that as a reward for being such a great conservator. In the form of shares of common stock.
And you are right - they can't own stock. That's why they own warrants. However they can sell the warrants to someone else for the value of the stock, or exercise them and immediately sell, without holding the actual shares. This is what they did with most of the other banks they bailed out.
Anyone else see Calabria's statement negative for us f&f shareholders?
When he says "we must not let this opportunity for reform pass" it seems he wants reform to happen before any recapitalization and ultimate release for the GSE's. Once they are recapped and released, the opportunity to reform them will have passed.
I was really hoping he would take actions THIS year and not wait for congress to maybe, possibly pass some sort of reform in the next few years.
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“I enter this office with a sense of urgency. The foundations of our mortgage finance system remain vulnerable, and we must not let this opportunity for reform pass," said Dr. Calabria.
Is this every going to get released?
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Yes. As soon as they build up their net worth to an appropriate value - estimated to be $150 billion - and pay back for the senior preferred shares.
Once those two things happen I would expect release to happen very quickly - like within a quarter.
If they cancel the 5-for-1 split that would be caused by exercising the warrants, then a price above $30 ($70?) is easy to see, but not until the market truly believes the sweeps have ended.
If the 5 for 1 split (exercise of the warrants) happens, then the price is unlikely to ever go above $15 without a follow-up 1 for 5 reverse split.
If every NWS payment had instead been counted as a payment of interest and principal per the original SPSPA terms, the total amount would have been paid back a year or so ago. Everything paid since then and any future NWS payments will need to be returned to fannie and freddie.
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Also, there is no chance that the overpayment gets returned. Nobody has challenged the 10% cash dividend rate in the original SPSPAs.
Can anyone match the number of .44 dividends with the number of escrows (and type) and the number of COOP shares they have?
If this was $.44 per share for common escrows - wow, that would be incredibly fantastic! Or did they mean .44 cents per? Or did they mean $.44 for all of their escrows combined? Or somehow for COOP? Or some other holding...
So far I've seen too little info to understand what this may be. As for me I have coop shares and common Q escrows and see no dividends today except from BofA, AIG, and BP
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IMHO it HAD NOTHING TO DO WITH ESCROWS which is the most puzzling part about all of this. Had it had to do with escrows at .44 my friend prob would have had a stroke, this I CAN assure ya
The real proof the NWS happened will be posted here next week:
https://www.fms.treas.gov/dts/index.html
On Monday or Tuesday look for the documents dated March 29, 2019 and go to the line item called "Other Deposits: GSE Dividends". This is essentially the receipt for the deposits into the US Treasury account.
It it happens I'll jump out of a cake...
I have a limit sell at $2.98. I should sell you my shares! One of us would save a penny.
Calabria seems to want f&f to recap. Easiest way is to modify the SPSA again to allow them to retain say $100B each. Hopefully this time they won't add it to the liquidation preference again!
Technically not stopped or suspended - just changing the amount of capital they can retain.
FHFA won't stop NWS until Calabria is confirmed. Since it's not looking like it will happen in time - FHFA has now posted the amount and date of the next NWS as:
" TBD = to be determined but not later than 3/29/2019 "
https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_2.pdf
I meant new dividends. The companies can't pay a dividend on common stock in any quarter when all currently due junior preferred dividends have not been paid. So dividends can't resume for common shares until dividends resume for preferred, or until the preferred are bought back, or traded in if a majority of preferred holders agree.
You are right that any past missed dividends can't be restored unless a court considers dividends on senior preferred to mean junior preferred should have been paid too.
So - common shares need to keep an eye on preferred to know what a fair price is. That is why we welcome preferred owners on this board.
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Not exactly. The preferreds are non cumulative, so they can only have preference in the current dividend, not in 10 years past dividends, lest anyone boast otherwise. Preferred dividends are "capped", while commons are not.
Common shares can't get paid a dividend until the preferred get paid dividends, so we need to know what's going on with the junior preferred to know what the common shares are worth.
A drop is an opportunity to make money. And a rise is an opportunity to put those profits in your pocket. Don't buy all at once, and don't sell all, or hold all. I don't try to wait for the bottom or the top. Just buy low, sell high. Buy lower, sell higher.
I originally bought at $27 back in 2007, but then bought a lot at various prices from $1.50 down to $.28. Unfortunately those cheapies have long since been sold and re-bought during previous jumps/drops in price. The shares I currently hold were bought between Nov, 2017 and Dec 2018 between $2.77 and $1.14. My current average price is $1.75 so I still have some unrealized gains. Over the years I've pulled out another $5 or so per share by buying the dips and selling the peaks. I use along4zride and cousin Arnold as contrarian indicators to help decide when to buy/sell. (sell/buy)
If I knew the NWS would end this month or this year, I wouldn't sell a single share. But I currently have staggered sales of a few thousand shares each at the next few 20% jumps from the current price.
The date for payout has been constant since about 2013: "Within the next 12 months".
That's still the timeframe as of today - it has not changed. Next summer it will be "within the next 12 months". But next January I'm optimistic that it will be "within the next 12 months". You can bank on that timeframe!
Can someone explain the "Value"? Is this "property held" the same billions that will be coming back to escrow holders, but in stock form instead of cash? Or is it something else ADDITIONAL???
It would be great to receive a few million dollars AND shares!!!
I read it to say they want an increase in the fees that fannie and freddie charge borrowers. That fee goes to their profit, not to the government.
To quote the article:
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The biggest of the bunch, by far, is a plan to raise $31.7 billion over 10 years by boosting the fees housing finance giants Fannie Mae and Freddie Mac charge to guarantee the mortgage market
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It says the fees that fannie and freddie CHARGE, not the fees they PAY the federal government. Those fees go directly to fannie and freddie profits. No way the government can benefit from them except for the NWS or paying taxes on them.
At least that's my read on it...
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did you read the article? it clearly stated the gov't taking a fee for guarantee
I think people are realizing that the budget proposal shows the White House expects the net worth sweep to continue for at least 10 more years. That's not real good for current shareholders.
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What happened to the buying frenzy that Gasparino's segment was going to spark? Do the lemmings not have cable? Please advise.
I'm sorry I was only talking about money that is potentially available to pay escrow holders. I've seen those other numbers, but I would have to own stock in JPM or some other companies to share in those dollars.
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Your $.008 per common escrow equity share is a bit low. Dr A's $86B common equity value divided by 1.2B releasing common equity shares comes to $71.67 per share. Not including interest for the use of our money for 11 years.
Would you care to share what is so funny? Was my estimate too high? Or too low?
Don't be so pessimistic. I'm not sure which classes you have, but for my Q escrows the best estimate is just over $.008 per share. If you have a lot of them like I do it will be enough for a nice dinner or two with a good wine.
The longer they take to pay this, the less it will be due to fees...
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Would love to see something come from heaven or China but best I can see the escrow will be a bust
I agree that we should have split COOP into a separate board. Unless COOP owns a lot of escrows, there is no link between COOP and the former WMI/WMIH/escrows.
It makes it hard to weed out the info you care about. But this is a dual purpose board so we just have to deal with it.
And when WMI-LT is shut down it won't stop all the discussions about the money coming to escrow holders - so we just have to live with this being a dual board for the long term.
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oops
forgot
this is not a coop thread but an escrow must happen because we want it to thread
sorry but how many years and posts ?
I disagree when you say there is no reason on God's Green Earth for those assets to find their way to us escrow holders.
If you were a money manager and you suddenly found you had a few billion dollars in assets that you didn't really pay full price for, that nobody had any record of, and knew that there were a bunch of former WMI share holders who have been dreaming for a decade that a big windfall would eventually come their way - wouldn't you immediately give those billions to those hopeful investors? It's the kind thing to do.
I think any money manager would be happy to give away $Billions to a bunch of strangers rather than keep it for themselves, or rather than giving it to their own investors.
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The reason people are so confused is because they do not understand the meaning or purpose of the terms bankruptcy remote or safe harbor. They believe that such assets are outside the jurisdiction of the bankruptcy court and therefore not subject to the terms of the POR. But they had better think about that position long and hard. Because if those assets are not subject to the POR, there is no reason on God's Green Earth for those assets to find their way to escrow holders. None.
$1 for 895k commons? I assume you mean per share, not $1 for the lot.
I'd sell my common escrows for a dime each if only we were allowed to sell them...
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I'll take a nice shiny silver dollar for my 895k commons
Don't keep us in suspense! Who is that incredible politician??????
And more specifically, what has she done to help fannie or freddie????
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the ONLY Politician in the U.S. GOVT that HAS DISPLAYED
that kind of MOXIE & LEADERSHIP - is ALREADY-
"MAKING AMERICA GREAT AGAIN !"
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You are confusing calendar entry number with calendar issue number.
What was posted was a link to calendar issue number 33, for today. Note that the "Calendar No" is a sequence number for each entry on today's calendar. Calabria is line item 87 on calendar 33 (today).
No guarantee they will actually vote today though, and they may have follow-up questions for him since it indicates he is willing to come back to answer more questions.
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If you look at the last Congress' Senate Executive Calendar, you will see that No. 87 was on June 8: https://www.senate.gov/legislative/LIS/executive_calendar/2017/06_08_2017.pdf
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That's called betting the house on f&f. Ha I did the same thing 10 years ago, and now that darn HELOC is in the repayment period. Ugh big payments now.
Luckily I've been able to sell some fannie and freddie and other bankrupt companies along the way to keep payments going. Hoping for the big jump soon to pay off the whole balance.
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in process of getting HELOC
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The WHO on Calabria:
There's no news on The Street
Looks any different to me
And the directors are replaced, by the lies
And a party on the left
Is now a party on the right
And the sweeps have all grown larger overnight
I'll tip my hat to the new cost of sweeping
Take a bow for the hope of releasing
Smile and grin at no change all around
Pick up more shares each day
Just like yesterday
Then I'll get on my knees and pray
We didn't get fooled again
Didn't get fooled again
No, no!
Meet the new boss
Same as the old boss
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The last few lines didn't need any changes
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Sounds as if there may be a Fanniegate song in there, and it just so happens that I'm accepting lyrics for new GSE Ballads.
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I was excited this morning... all this talk about distributions, shares, etc... Shares in a new security popped into my account out of the blue with the description "WABTEC"
My mind is saying WMB Asset Benefit Trust? Washington Beneficial Trust Escrow Credit? ?????
No - a spin-off from GE. Back to waiting.
I have some escrows from other bankruptcies that have been in my account for a lot longer than 10 years. I wonder if they EVER go away?
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What about FUTURE distributions if any??I do not think they will disappear.
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If you did your due diligence you would know too.
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""" Not worth thinking about since it's so completely impossible."""
You DO NOT KNOW THIS FOR FACT
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I'd be THRILLED to get ten cents per common escrow share since that's more than ten times what one could reasonably expect.
A buck? Not worth thinking about since it's so completely impossible.
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How many of you would be happy to get $1/escrows share just for the relief of actually having it over with after all these years? I'm not so sure the hedge funds would be thrilled to get $1/escrows share after all these years of waiting.
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Treasury cannot exercise warrants and hold the resulting stock. They must either sell the warrants prior to exercising them, or exercise them and sell the resulting shares in a single transaction. Not unlike an "exercise and sell" order for common stock options.
This has been discussed many times over the decade. The government cannot OWN EQUITY in a company, but they can own warrants or preferred stock and they can sell them or the underlying stock.
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I recall Calabria saying that under HERA the Treasury would not have been allowed to acquire equity in the GSEs. I am curious to see how he will remedy that.
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Warrants CAN be sold. As I recall there is specific language about them being sold.
In fact the one thing Treasury CANNOT do is exercise them and own the shares. The government is prohibited from owning a private company. It may be possible to exercise and sell in a single transaction though... I don't remember seeing that done with Treasury warrants before.
With most companies and banks taken over by the gov't in 2008/9, their warrants were sold back to the original company - most were sold at a very steep discount. However in this case the proceeds from selling them back would be so small, it's basically the same as wiping them out or throwing them away. Most likely they will be sold to other companies or investors that the Treasury wants to reward.
Will Calabria's making_it_clear he intends_to_follow HERA as_originally_written cause them to NOT confirm him?