Fannie Mae-No Politics (FNMA)

[rekcusdo]

Im afraid it doesn't work that way.

The warrants do NOT translate into outstanding shares.

Unless the warrants are actually exercised, they don't even show up on the GSE financial statements.

Basically, the way the economics of warrants work, having unused warrants has no effect on the financials...therefore, eliminating illegal warrants have no effect on the financials...it is erroneous to say that the warrants make it so there are 5x the outstanding stock than there would be without them.

Now, if the government actually exercised those warrants, then that would drive down the pps. The current pps does NOT take into consideration the exercise of those warrants.

Also, it is highly unlikely the government would ever exercise those warrants even if they are deemed legal. To do so would make them a fiduciary of all us private shareholders, a position they'd never want to be in.

So, to recap. Yes, as Ackman said..about 30-50pps. But the warrants being made illegal can't have much effect on that pps. Maybe a token 5-10 extra dollars due to those investing who don't know what warrants are or how they work.