Fannie Mae-No Politics (FNMA)

[imtheshadow]

cap, bear with me on this ... you start with the assumption that $12.31b NI x 14.62 PE = $179.97b Mkt cap. ... but dividing that by 5.9B fully diluted shares (i.e. warrants exercised), gives a pps of $30.50. I now go to the market to raise the required recap of $112B, so I need to sell 3.7B additional shares, bringing the total shares to 9.6B BUT you MUST also add the $112B in paid in capital to the value of the company, which is now $180B + $112B = $292B divided by 9.6B shares brings you back to $30.50/share. Yes, there might be some discounting (15% - 20% high side), but that still puts the pps way north of $20. So, basically, I'm saying that if you start out with a company worth $180B and 5.9B fully diluted shares, you are going to price the equity offering to recognize the then current value of the stock which is $30.50 (less a placement discount). Thoughts?