Fannie Mae (FNMA)

[Fully Diluted]

Topic: Receivership

Hello, folks,

The only way to wipe out shareholders would be to use receivership to liquidate Fannie Mae. This is what the law HERA prescribes.

The Munich company Alvarez and Marsal was commissioned 5 years ago to determine the liquidation value of Fannie and Freddie. The result:
Liquidation value of Fannie: $97.589 billion dollars
Liquidation value Freddie: $73.786 billion dollars

Here you could find the study:
https://bipartisanpolicy.org/wp-content/uploads/sites/default/files/files/GSO%20-%20FNMA%20FHLMC%20Methodology%20%20Assumptions%203-19-14.pdf

However, the study was immediately deleted from the Internet when I posted it here on Ihub:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=145761537

Yeah, that's how it was. Probably not everyone should know about it...

I know that there is sufficient confidence in me and no one here doubts that the study existed and delivered these results. Nevertheless, I would like to refer to the highly respected board member obiterdictum, who also dedicated a post to the study:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=99645624

Obiterdictum unfortunately quoted the wrong results - there were two. Anyone who reads my post will understand.

Okay, why is that important?
Quite simply, if Fannie Mae is wound up, of those 97 billion dollars, the senior preferred shares get their full liquidation preference first, then the junior preferred shares. The rest can be shared by the common shareholders.
Liquidation preference SPS: approx. 120 billion dollars
Liquidation preference JPS: 19.1 billion dollars

Should the SPS be deemed settled by the District Court or the Supreme Court, as En Banc's ruling suggests, we common shareholders have approximately $78 billion off the cake for 1.158 billion shares outstanding. The warrant would be void as it cannot be exercised in Receivership. Well, it could be exercised before that. But this is not how it and Receivership were thought of.

Fannie is worth more today than at the time of the study in 2014. However, Alvarez and Marsal have chosen a liquidation period of 10 years, but in Receivership only 5 years are available. In short: I estimate the liquidation value of Fannie at over 70 billion dollars.

So: If you are still afraid of Foster's and Calabria's words, I can't help you. I would say: If we shareholders are really wiped out and erased, the chances of a fat profit are better than ever.

Don't get shaken out. Not that your shares end up in the Growth Fund of America...


GLTA