Fannie Mae-No Politics (FNMA)

[contrarian bull]

If they accumulated $100 billion in reserves - wouldn't that be considered an asset and go towards stockholder's equity?

So even if they issued 5 billion shares to raise capital, and the gov't exercised their warrants - wouldn't total shares be roughly 10B?

100B in reserves divided by 10B shares = $10/share in stockholder's equity. Then add in the value of the company as an ongoing concern with $1 per share in profits - say another $14. I think we are right back to the common estimate of $24/share.

I would think net effect of raising capital through issuing stock would be zero - just like when any company has a secondary stock offering.

Am I missing something?