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Genworth owns 81% of Enact "ACT", which at $22/share is worth $2.8 Billion...and Genworth stock "GNW" at 4.21/share has a market cap of $2.1 Billion. They have $356 million in cash and look to reduce debt from 1.25 Billion down to $900 Million this year.
Mngt is talking about returning capital to shareholders, and spinning off shares of Enact would be a great way. GNW owns over 131 million shares of ACT,,,,they could issue 1 ACT share for every 4 shares of GNW we own. That would affectively be a 100% return
This shelf stock offering of 37 million shares....it's coming anyday and they will price it below the closing stock price,,,,my guess is $2-4 below whatever the closing stock price is.
There will be a sharp drop in both the warrants and stock temporarily,,probably best to sell now and look to buy on the release of the stock sale
NYSE or NASDAQ uplisting should be occurring soon too. This will drive ETFs and Mutual Funds in the travel/transportation sectors to have to buy stock and push even higher
Avis Budget trades about $166 million daily in volume,,,Hertz is about $3.5 million in daily volume
Once on the big board, the volume will swell as larger institutions can own the stock and it will of course need to be owned within several ETFs a well.
Avis Budget trades about $166 million daily in volume,,,Hertz is about $3.5 million in daily volume
Once on the big board, the volume will swell as larger institutions can own the stock and it will of course need to be owned within several ETFs a well.
If Nationalized, why does FNMA/FMCC pay taxes ? Government entities do not pay taxes
Has ACG Analytics or any Hedge fund analysis of opinion of SCOTUS ruling been posted here?
Who receives money from a potential lawsuit win/settlement ? Given SCOTUS ruling that forward relief is gone, only backward...do you have to be a current shareholder to receive or only show you owned shares during the class period of time? Will this be subject to 1/3 taken by lawyers?
Treasury was never supposed to be running the show. It was stated in HERA that FHFA had sole power of running the conservatorship without influence of Treasury. Treasury was only a creditor, as such. Yet from the very beginning Treasury had its say and essentially FHFA had to run every major decision thru Treasury.
I've posited this question to Gaby Heffesse at ACG, I'm stunned that this almost $90 Billion isn't ever brought up in the legal brawling as it seems so blatant that a conservator suing on behalf of the entity it's conserving just takes the money for itself without any obligation to the entities (F/F)
The problem with the stock price always falling back after perceived good news is that the same shareholders largely just are in/trading the stock. Until substantive changes in legal/forward looking good news occurs, the main base of holders exist and thus no new money chasing the stock, which means no new real demand for shares.
Getting a uplisting to the NYSE would be a major news,,,,writing down the PSPA to zero would be major news...positive news from SCOTUS
When FHFA sued all the big banks on behalf of F/F for fraudulent loans sold to them, it was approx. $89 Billion in total. Why hasn't this money been involved in the lawsuits and/or repayment consideration to the Treasury? As it stands, this was just additional slush money the Treasury took without any consideration that it was F/Fs money.
If you are a conservator and you sue on behalf of the entity you are charged to conserve, this is their money, not the conservators !!
The SCOTUS ruling will literally be the largest dollar amount of damages ever contemplated, thus I expect their ruling will most likely be one of the last ones if not the last to be rendered.
The centerpiece being allowing the US Treasury/Govt to be able to nationalize a publicly traded company, with facts supporting that both companies were not in dire financial trouble when they were taken over.
Let's see what happens because we will know shortly
Brooge,,,,,,,I've been in this since August 2008, traded often but I agree 100% that these moves up 10cents, even back to $3-4 is nothing. Not till $10+ will it be that meaningfull to me. I've got 300,000 shares of FMCC and 25,000 of FNMAS and the moves up back in late Nov. were still just noise. It will take a favorable SCOTUS ruling to make them investable to others other than the long term holders.
Just to add to your post, what amount of money did FNMA FMCC sue the big banks and were awarded ? I read where Bank of America paid over $70 Billion in fines/restitution for fraudulent loans.
Though f/f sued them and won, they didn't receive the money, it went into the US Govt general funds account.
That seems so wrong given the sums of money was well over $100 Billion in fines against all the big banks, which should have gone to reimburse the loans f/f received for having to write down of non cash charge of the very fraudulent loans these banks sold to them and were later fined for.
Something most relators and mortgage brokers don't seem to keep up with/know is that prices for "framing lumber" has increased 113% in the past 12 months.
Framing a home is about 25% of its total cost.
A $400,000 home a year ago has seen it's price increase over $100,000 just because the lumber in it has doubled in price !!
FMCC has traded about $25 million of volume, probably do $30 million today
FNMA has traded about $70 million of volume, probably do $85 million today
Most all this is individuals, some that through in the towels, other more short term owners.
The dollar amounts are a pittance of trading amount for most stocks that trade. Only until significant steps are taken for path out of conservatorship will these stocks rise above the $5 level.
If we don't get SCOTUS favorable ruling next year, Mnuchin doesn't deem PSPA fully paid, these shares are toast thru the Biden admin. bcuz all the old Obama holdouts in housing finance are back in running the show.
Elections have consequences,,,and damn it cost us shareholders a lot of money
Both GSEs have Financial Advisors now.
When do you think these advisors will push to have stocks relisted on NYSE?
That move in itself will cause the stocks to double IMO as it puts the world on notice these companies are in play for capital from institutional investors that couldn't purchase/trade on OTC BB
Can they be relisted to the NYSE before the NWS is dropped or not?
From a Financial Reporting standard that the NYSE requires, they are already in compliance of that.
This would mean they would own 23% of the outstanding shares of FMCC, and 20% of the outstanding shares of FNMA.
Regardless of where this info comes from, that doesn't makes sense......does it to you?
I don't believe they own over 10% of either outstanding shares.
Everyone that owns F/F should be excited
5 yrs ago, F/F were at $2.50/share
Here we are 5 yrs later at $2/share, but....
FHFA/Treasury committed to ending conservatorship
Advisors for each entity have been hired (and they are big names)
Net Worth Sweep has been changed for now but we all know it will be ended soon as necessary for companies to exit conservatorship
Rulings from Supreme Court coming soon but
Companies will be getting relisted to NYSE
SPSA will be altered to foster getting new investors into F/F capital raising efforts.
If you don't believe JP Morgan, Morgan Stanley will advise and start dissiminating what the true value of F/F are, before getting relisted to NYSE, you are extremely naive. The pieces of this stock going up before this occurs is being put together. Regardless of what Commons Cxld says (and I have agreed with many of his previous assessments), these stocks will at or near $5 before they apply for NYSE listing which means before year end.
Every mutual fund, pension fund, many hedge funds, foreign investors will HAVE to own F/F because they are going to be a part of the SP500 and probably the DJIA.....there will be huge demand for both of these stocks and the valuation they are at now doesn't reflect any of these upcoming events.
When are F/F supposed to be announcing the hire of their own financial advisors?
FHFA/Treasury need to be "forced" into doing something they aren't willing to do as things stand now. That means our only way to get resolution that is more favorable for us is via the courts, IMO.
Calabria writes a paper stating the NWS is not only illegal, but that as a draftee of HERA, states this was "not" what he/others would have ever imagined the FHFA/Treasury would be allowed to do, yet as head of FHFA, he is defending the NWS status instead of pushing to have it removed as illegal.
We need significant wins in the next few court cases pushing for reversals of NWS and damages awarded. This is the only way to force the FHFA/Treasury into doing things they don't want to acquiesce to otherwise.
Rulings invalidating the warrants would be huge as well, but I don't know how likely that is, unless the case can move to illegal/non sactioned actions by Obama housing officials like Jim Parrott.
Calabrias/Krimmingers Feb 2015 white paper
https://www.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf
If you will read this, as these two were heavily involved in drafting HERA, which used FDIAs playbook for the FDICs oversight in conservancy/insolvency laws....they CLEARLY state that the US GOVT not only siphoned off more than they were owed, but point out that shareholders were denied dividends/profits.
This document is in the discovery of what courts are using now.
SEND MESSAGES TO CONGRESSMEN AT LATEST HEARING
I'd urge a kind of mktg campaign from all shareholders to send via twitter to all the congressmen that were in that housing committee meeting the other day. Each one of them has a twitter account (they were showing it on the webcast each time they had camera time)
The fact that NONE of them even seems to get that BANKS create mortgages, not the GSEs is dumbfounding to me. The literally believe the GSEs caused the mortgage crisis. It is up to us to inundate them with corrective messages so maybe they are swayed in thinking in some way.
I have already begun this so I hope more than just a few of you attempt to as well, we need a monsoon of shareholders doing this.
I think it is November 19th
F/F suffer from the Fake Media syndrome
TARP was a $700 Billion bailout of which only $441 Billion was drawn down on, and the Govt made $94 Billion profit off it. If I were the Govt, I'd look to offer to do this again if need be.
GM was bailed out and the Govt LOST $13 Billion on that one, yet GM is making big profits and you don't here anyone bitching about that bailout do you?
The GSEs have poured $200 Billion into the Treasuries coffers and they dare to say that because of the enormous backstop, they deserve it ? The collateral that the GSE's have backing their book is as rock solid as anything banks can put up,,,,monthly principal and interest, with a default rate that averages 3.2% annually and only went to 6.8% during the height of the financial crisis,,,,and they got dick slapped with a 10% loan interest rate when all other troubled banks were getting 5% to less than 1% rates.
Calabria pens a white paper advocating that the NWS was illegal, yet he now heads the FHFA and hasn't stopped it fully, nor spoken the words that he so aptly wrote about its illegality, no one even has questioned him in public to explain his white paper and if events of late has changed his thoughts or not on it.
I see this Collins case and others that are remanded and we better hope we see a reversal in opinion and awards for plaintiffs........it was no coindidence that the EnBanc decision came a day after the Govt stated their housing reform goals....the courts and the administration speak behind closed doors to each other.
Will the true narrative ever come to light, or is this going to always be "fake news" and "fake FHFA/Treasury" narratives that stair step to all interested parties that have decision making authority ?
We need a massive marketing blitz to tell the truth.....could money be raised to fund a massive p/r campaign for billboards, social media, print in the WSJ/Forbes/Time/etc...? I'm looking for cogent ideas to get this started.
What happens after next Tuesday?
We all are unsure/untrusting of the FHFA/Treasury in regards to their "don't give a crap about shareholders/don't apparently seem to care about the 5th Circuit En Banc decision re: NWS"
But if you can put on your Investment Banker hat on for a moment consider these things instead of struggling with the noise.
1. FMCC has 750k shares outstanding, FNMA 1.2 Billion shares outstanding
2. The preferred stock outstanding, if I were an investment banker advising
them, would just call all the prefereds at par or 10% premium to par, reissue at todays much lower interest rates at about 3-3.5% with a AAA rating/govt backing
3. Shares are going to eventually be relisted on NYSE, institutional buyers will come into the names after breaching the $5 price levels and uplisting
4. Once the NWS is totally/mostly removed, the stock is going to bolt much higher, I think to the $5-6 range at minimum after the announcement we are expecting in within the next week. No one trusts it will happen in spite of press reports that it will, which is creating time to still buy sub $4 to those who are smart IMO
5. Investment Bankers will be placing a much higher valuation on F/F after the NWS is removed
Pollacks methodology on accruing interest is baseless because he doesn't account for the nearly $70 Billion in non-cash gains which would have gone directly to principal repayment in 2012.
Recall the initial $130 non-cash losses the Treasury forced the GSE's to base their initial loan on at 10% was just that.....non-cash losses.
The reversal to non-cash gains in 2012 apply just the opposite, yet, Pollack doesn't apply the factual accounting methods to his hit piece, go figure.........NO CREDIBILITY and this guy was head of Banking Unit for over a decade !!
You make a great comparison.
I made almost $600K off that AA stock deal, each tranche I received kept being at a higher price as the valuation of the deal became better known.
I agree with you, that once the true valuation of the GSEs becomes known, the stock prices will soar much higher than anyone here on average really imagined.
With their earnings power even after what I consider a large dilution, I still think $20+ will be seen. And the stocks will be well over the $5/share threshold for listing purposes on the NYSE once more becomes known on the timing of shares being uplisted.
En Banc thoughts:
1. This decision encompasses the largest financial amount in any courts history, the ramifications to the Treasury, US debt, would be enormous if a rendering goes with the plaintiffs
2. Ruling would also turn conservatorship law on its head and there would be long standing rules of such that could be challenged/court battles of many other cases if court finds for defendants
3. One huge issue thats been brought up by the judges is if they found for plaintiffs, what would a dollar amount/compensation look like.
4. Shareholder rights will either be acknowledged or decimated, yet there's never been a company that was profitable, that denied shareholders of economic benefit. Hard to envision the caliber of the courts judges that they would be the first to deny such.
I've listened to the en Banc oral arguments about 10 times over. The tone/questions/responses point to some victory of sorts for plaintiffs.
The timeframe for this ruling is long, complex. This is the one time I actually feel like the plaintiffs will finally get a win.
Current stock price discounts for all the past losses.
60 minutes ran an episode on the GSEs shortly after they were put into c-ship, with Henry Paulson stating the companies were not nationalized, it was only a time-out. Paulson actually stated at a meeting with FNMA/FMCC employees within a week of the c-ship that that the Govt was not taking them over, only a pause to stabilize before returning them to there previous place.
Given that in August 2008, Paulson was trying his best to put them into receivership, but the Law firm they hired told Paulson they couldn't put a company with a positive net worth, positive cash flow, into receivership, the only thing they could do would be c-ship but they would have to prove that the companies had massive losses not yet recognized in order to do that.
2 weeks later, Paulson hired Morgan Stanley to value the assets of FNMA/FMCC in which essentially they completly nullified the valuations of the the then current regulator OFAEO which had stated they were adequately capitalized. So Morgan Stanleys team apparently saw things that OFAEO couldn't ? Strange to have assets be shown to have a valuation difference of $200 billion between two "regulators",,,1 paid for by Paulson, the other an unbiased independent regulator.
IN a recent interview with Maria Bartiroma, Paulson states they were nationalized. Funny how his story changes to fit the paradigm.
I have been hoping for years that someone at CBS 60 minutes might run a more in-depth story showing more of the elements of the truth, more details re-the takeover, how massive the write offs were yet also how massive the paybacks were and describe what "non-cash" write offs, write downs actually are, and the devising of the net worth sweep.
With the administration offering up it's own plan within the month, I am hoping that 10 years later, 60 Minutes does a follow up story and that is not from the left, but at least an unbiased, truthful follow up piece.
The mechanics of the stock offering-
1. FNMA/FMCC have traded over the past 10 yrs as if they were essentially in receivership, as no profits flowed back to the company. Thus the very low stock price
2. Investment banks will be brought in to place a value on the companies that WILL reflect expectations of profitablity, cash flow, and a true value of the portfolios of mortgages they own
3. The stock price will rise "before" the stock offering because the markets will be pricing in the new valuation of the company. The stock price offering will be just like a secondary offering, where the new stock will be offered at at price at/near the price of the shares at the time the offering takes place
The mechanics of the stock offering-
1. FNMA/FMCC have traded over the past 10 yrs as if they were essentially in receivership, as no profits flowed back to the company. Thus the very low stock price
2. Investment banks will be brought in to place a value on the companies that WILL reflect expectations of profitablity, cash flow, and a true value of the portfolios of mortgages they own
3. The stock price will rise "before" the stock offering because the markets will be pricing in the new valuation of the company. The stock price offering will be just like a secondary offering, where the new stock will be offered at at price at/near the price of the shares at the time the offering takes place
For Administrative Plan, other than the basics of preserving 30 yr mtg, govt backstop,,,,,you better believe they have been discussing the potential legal issues of the Net Worth Sweep, current cases, and possible impact to their plans. Given Calabrias views in his written paper of how the NWS was unlawful, not allowed as HERA was written, addressing this will be part of the overall administrative plan.
No.....the companies would have to probably authorize and increase in shares authorized first, but, they would do a "secondary offering" of new stock.
The stock is going to gravitate to a price that smart money believes the market valuation makes sense. Then the companies will sell shares to institutional investors at or near that stock price.
The companies will first reapply for NYSE listing,,,and they will be a main stock holding for most all large cap mutual funds.
I have owned FNMA/FMCC since when they were 25 cents/share....they had a run to $5/share back in 2012 before the net worth sweep. I was fortunate to have sold in the $4 range back then.
No one ever could guess that they'd be stuck in conservatorship 10+ years, especially since the big banks getting TARP, AIG, were able to repay 1 year to 3 years later.
I manage money for a living, and it has been hard convincing clients that the wait will be worth the return.
New investors (money) will begin pouring in, speculating on the price appreciation. You'll see much more press on tv/newsprint/message boards driving the mania, forcing stock price much higher.
Most people who've owned wont buy more,,,,,but this is the perfect time to add to holdings before it jumps much more....The reason we bought it has finally come to pass.
ha,,funny......there is no reverse split and talk of such is wasting good air.
The warrant conversion is why these stocks aren't already at $10-12/share.
I don't know what % chance the Govt says, we've been paid back, we are forfeiting the warrants, but the court decisions coming up could help prod the govt into not converting the warrants.
One of the to me, BIG things that is finally being shed to light, is that the judges hearing cases now have the insight of discovery that judges who made decisions on 4,3,2 years ago didn't.
The whole narrative of the death spiral defense was taken at face value....but now, if you listened to the lastest EnBanc appeal, and also realize in the court of claims case, all this new discovery will be vetted, the Govt will more likely be prodded to succumb to making a deal to forgo the warrants.
The warrants were put in place as a equity kicker and it is not an automatic given that the Govt will convert them.
based on current talk, yes......but I was more or less showing that the share price has much more upside from here as a capital raise, which the Govt will choose probably a combination of investment banks to handle, will price the offering at a level appropriate to a valuation of it's peers, namely the largest money center banks.
I'm overshooting on capital raise to make that point......so if FMCC only needed to raise $75 Billion then you can see that the price point of the stock would be in the $25/share range.
As explained in earlier post, There's not going to be 15-20 billion shares outstanding.......more likely in the 6-9 billion outstanding share range, as Wells Fargo has 4.7 billion outstanding, the largest share count in the financial sector
To receive institutional interest, first and foremost these will be the largest capital raises in history.....it ain't being priced sub $10/share
AAPL has 4.75 Billion shares outstanding, WFC has 4.7 Billion shares.....underwriters/market will not want any company of this size to have tens of billions of shares outstanding.
There's a better case for the stock being priced at $25/share with 5 billion shares outstanding than at $7.50 with 17 billion shares outstanding