Fannie Mae-No Politics (FNMA)

[capitalismforever]

Bonds do not count towards "core capital" rules. They'd increase the debt, the exact opposite of what needs to happen. $20 is on the low end if you believe a $100b valuation is low. Currently, earnings suggests, and has suggested, that $100b is on the high side of the spectrum. Even though the government sweeps their profits, those profits are all accounted for in earnings and taxes are paid on them by the company. So unless you think the market will value the earnings at 15x (which it hasn't since around the 1990's to my recollection), assuming more than $20 per share becomes extremely speculative on an investors part.

The recap will be the primary factor in deciding share price. I believe it could be anywhere from $40b - $90b. If it's the latter, shares will be pennies. I don't believe that's the goal of the Treasury from what I've read but that's the scenario to think about.

Other factors contributing to value are the warrants and the senior preferreds.

Because the preferreds are the ones litigating the case, as well as Trumps economic advisor (John Paulson), it's highly, I'd say beyond highly, doubtful that the preferreds will be forced to take anything less than par for their diligence.