Fannie Mae-No Politics (FNMA)

[kthomp19]

No IPO/SPO of common stock will be possible without a shareholder-elected board and the third R which is relist is impossible under big board governance rules for major exchange listing without one.

The first part is false. Calabria's quote of "It has always been my view that an exit from conservatorship is going to require a large capital raise by Fannie and Freddie." means that the re-IPO is either going to happen prior to or alongside release.

I understand that new investors won't want to invest while conservatorship lasts, so all signs point to a simultaneous re-IPO and release.

However, that means FnF's boards will not have the final say in the re-IPO process, including the size, timing, and offering price. FHFA will be calling the shots on those things because HERA gives it the authority to.

ACG Analytics seems to think that relisting could happen before the re-IPO. While you might be right about corporate governance concerns preventing that, there would be nothing stopping relisting from happening alongside the re-IPO and release.

Something to watch for, then, is a reverse split of the commons. There is no guarantee at all that the common share price will get above $4 before the re-IPO; a reverse split is just about the only way to assure that.