Fannie Mae (FNMA)

[chessmaster315]

Reminder: Obama administration REJECTED a $52 billion offer for fannie.

Underline the word "rejected". No counter offer. Just rejected. If you offered me $500 for my truck that I think is worth $20,000 I would reject your offer because we are so far apart, that your offer is not serious. If you offered $18k or even $15k, then we could begin negotations. But a 500 offer should be rejected.

In a similar way, we now know that fannie has a worth of AT LEAST 52 billion, and really much more, because the offer was rejected.

While I do agree $52 billion is too low, recall that the Obama Administration said that fannie shares are worthless.

Now, if the government is "protecting taxpayers" from financial loss, then they surely should have accepted or at least negotiated that offer.

If anyone offers me $52 billion for my "worthless" stuff, they wont be making that offer twice as I will not only accept it, but I will hold them to that offer, that is, if it is from a billionaire who HAS 52 billion. If its from a homeless bumb, then I wont consider the 52 billion offer credible. But, remember, the offer was from a billionaire, who could, plausably, perform.

My calculations follow:
If fannie is worth 52 billion divided by 1.2 billion shares, that equates to a value of 43 per share. (This number would be reduced by the preferred holders value, and the dilution for warrants, if any. However, it would be increased by any settlements, future earnings, past dividends paid to shareholders in the future, if any)