Exactly. Using per-share numbers right now, like EPS, makes no sense because there is no reason to believe, and many reasons to disbelieve, that the share count will not significantly expand by the time FnF are released.
The warrants alone bring the share count to 9B, and there is still the re-IPO (which Calabria said will heavily dilute shareholders) and a potential junior pref exchange for commons that raise the share count further.
If commons end up with about 5% of the GSEs
This sounds about right to me. With a market cap of $250B, which I now think is rather optimistic due to FnF's credit for benefit losses rolling off after this year, 5% is $12.5B, divided by the existing 1.8B shares leads to a final price of $6.94. I think this is a very plausible landing spot (near the top of my range though) for the commons when all is said and done.
That being said, I think its not a bad deal to get $7 shares for $1.60 and $1.75 with the potential to go anywhere between $7 and about $250.
Did you get $7 from a calculation like I just did? And how do you calculate $250?
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