Fannie Mae-No Politics (FNMA)

[kthomp19]

just the facts

No, your post mixes facts and non-facts to make them all appear true.

pfds cannot be converted unless 2/3rd vote

Yes, this is fact.

almost impossible to get that number of votes as tally shows they are well distributed,

This is not fact, it's opinion. Speaking as a small-time pref shareholder, I would certainly vote in favor of a conversion if it's at a generous enough ratio.

Where did you get your "tally" from anyway?

even ackman bought pfds while keeping 100% of his commons to thwart such an effort

This is just plain false. Check page 15 of Pershing Square's 2017 annual report. Specifically, this section (emphasis added):

While the substantial majority of our investment historically has been in Fannie/Freddie common stock, we acquired preferred stock recently because (1) we believe that the timing of a favorable outcome for the two companies is more proximate (timing is an important consideration for the preferred shares as they are noncumulative and perpetual), (2) it hedges our risk of a restructuring that disproportionately benefits the preferred versus the common shares, and (3) we found the trading prices of the preferred securities attractive at current levels.

Ackman isn't trying to thwart the effort, he is positioning himself to not be too hurt by it.

treasury owns 79.9% commons and would want to maximize them.

A generous conversion offer still allows Treasury to maximize the value of its warrants, but it would leave current common shareholders in the dust.

treasury still owns 179 billion in senior preferreds that junior preferreds say treasury would gift them for free so that junior pfds can collect, hah! nice.

Treasury giving up the seniors doesn't mean that the juniors get all the benefit. In fact, if the seniors stay in place, both the juniors and commons are screwed.

jr. pfds can only be at 3X from here but commons over 10X. not a recco.

1) FNMAS traded above par prior to the conservatorship, and doubtless would again post-release due to its sky-high dividend rate.
2) The lawsuit plaintiffs are pushing for par plus back dividends as part of a settlement, so the negotiations could end up above par.
3) A conversion adds upside to the juniors.
4) The downside of the commons is if there is heavy dilution towards a recap. Don't fall into the trap of only looking at the upside of an investment.
5) It would take an unrealistically small amount of dilution to get 10x on the commons. Moelis involves several years of retained earnings, while both Otting and Mnuchin want the companies released (and therefore fully recapped) in two years. The Moelis plan is looking like it's even better than the best realistic case for the commons.

All this shows that the "3x for pref, 10x for common" argument is flawed on both ends.