Fannie Mae-No Politics (FNMA)

[kthomp19]

If the warrants are held for conversion until after the SPO

This scenario is never going to happen. Nobody will buy new shares knowing that Treasury can dilute them 5x afterward.

If Treasury exercises the warrants at all, it will be before the secondary offering. They might sell the shares immediately or divest them more slowly.

Just one more reason to hate the warrants.

Nobody should have a reason to hate the warrants. They are the primary reason that Treasury has to allow recap and release rather than just never approving release at all. The idea that the commons would be worth 5 times as much if the warrants ceased to exist is incredibly naive. Removing Treasury's incentive to prop up the share price (and push for lower capital requirements) is far more damaging than 5x dilution.