Fannie Mae-No Politics (FNMA)

[Louie_Louie]

What JPS fail to understand that will be their big downfall:
Government does not want their warrants diluted whether they exercise or not.

You can bet the investment banks JPM and MS are not going to target diluting shares they will come to own as payment, unnecessarily. Their shares and interests will be ahead of JPS and aligned with (drum roll please).....you got it! commons.

The advisors will inform government and the investment banks, and will agree, that any kind of major dilution will end badly for any funds raising. On the other hand, pref shares being IOU's can be issued from now until kingdom come at very low rates. And the pref structure can be changed as to who gets dividends and who does not.

The BOD will be paid like 99% of all company boards via common stock incentive. So, yep again (drum roll and big cymbold crash), another reason to not have a low common price.

Can JPS be bought out fairly cheap? I think so. If JPS are worth 30 billion, I think they can be had for 20 billion or less. Wipe the JPS slate clean, issue twice as many lower dividend paying noncummulative prefs. I wonder if the current pref holders would buy those prefs? Probably...a fool and his money are soon parted.