Fannie Mae-No Politics (FNMA)

[GAK-]

If that is the case, the amount of dillution for common would depend on how many shares are created when they convert those JPS (BTW, I also own about 15% JPS/85% CS). For FNMA, if they create 500 million, then we end up with 1.6 billion shares (not accounting for exercising warrants) for about $40B in CET1. If my math is correct, common shares still come out better in that scenario. If they only create 200 million, even better for the commons.

The real danger, it seems to me, is if they exercise warrants against the current $21.4B (probably $26B after Q4) before converting JPS. At that point, Commons are limited to about $5 per share.

Obviously, the longer they wait to exercise warrants or if they negotiate a repurchase of the warrants, it only benefits commons.