Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Market cap after capital raise will be around $250 billion. 8% of that is $20 billion. There are about 1.3 billion JPS shares (all series).

This would give the JPS a final (average) value of $20 billion divided by 1.3 billion shares = $15.38.

This is less than Glen Bradford and KThomp19 expect. Both expect JPS to reach at least par value ($25).

So who is wrong here?

I don't believe anyone is wrong if they think JPS get par. That means I agree with KThomp and Glen.

Our school of thought is generally the same. The final capital structure may look different than we imagine, but JPS should be made whole in virtually any scenario. Reason being is because of priority in the capital stack and contractual liability.

Treasury could try to zero out JPS and common, but by doing so they won't be able to moot the bulk of the current lawsuit liability (JPS is the bulk).

The Enterprise Value of the GSEs is going to be a bit higher than your estimate....and if it's not...JPS will get more than 8%. 32B is 8% of 400B. That's the high end estimate and what I used. FYI. (And best case scenario for legacy commons)