Fannie Mae-No Politics (FNMA)

[bradford86]

i'm expecting

1. sr pfd liq pref converted to common (99% dilution)
2. warrants exercised (80% dilution)
3. jps converted to common (~15% dilution)
4. capital raise (50% dilution)

combined they make $25B on average and start with 2B shares

figure they raise $ at 8-10x earnings.

that's my assumption matrix

if you disagree with a few of them, maybe your estimates result in less dilution and a higher share price.

the big one is #1, which wipes commons.

regarding your assessment about what they can do about jps, jps have 2/3 vote on anything that happens to their shares, the government/companies aren't redeeming anything --- and redemption is uses of cash, not sources of cash, and jps have pending litigation worth 150% of par that needs to be settled if the companies are to raise $, which is what treasury needs to do to get it's $100B

so if you follow that, jps have to get paid par if the government is going to get $1 out of its equity position.

that's the real deal, jps block capital raises --- anyway your analysis is what it is, enjoy it.