Fannie Mae (FNMA)

[kthomp19]

The charters do not mention an authorized share amount but the prospectuses do.

Do you have a link to the prospectus? I can't find one.

NOBODY but an idiot would buy equity shares in a company without knowing how many common shares might eventually get released into the open market.

Pretty harsh words there. Every person who currently owns FNMA or FMCC common shares bought them without knowing what the final share count will be. That includes the vast majority of posters on this board, and you just called them all idiots.

Dilution happens all the time though. The maximum share count of a company is never set in stone: the company can always change it. That doesn't stop people from buying the stock. We see with Freddie that they can do it too, even while in conservatorship.

What would a company stand to gain by tying its hands forever on a share count? The ability to price shares higher in an IPO? In my opinion that's outweighed by the flexibility of leaving room to increase the authorization later in case the company gets in trouble. Why pre-emptively cut off a potential source of capital for eternity?

Can you provide me examples of companies who have permanent maximum share count authorizations that cannot be changed?

Even then, the FnF boards could set a binding, perpetual, set-in-stone maximum alongside the equity raise, assuring the new buyers that they won't be diluted later. That doesn't help current common holders at all.