Fannie Mae-No Politics (FNMA)

[kthomp19]

Huh?! Preferred shares are equity? Since when?

Investing 101.

Investing 101 says preferred shares are equity. Always have been. They reside in the equity portion of the balance sheet for goodness sake.

Preferred shares do NOT carry any equity as they do not provide ownership stake on the companies; nor they have any voting rights.

1) Preferred shares carry equity up to their face value. At the moment the seniors carry all $90B of FnF's equity (net worth), with zero for the juniors and commons.
2) What exactly do you mean by "ownership"?
3) Preferred shareholders have voting rights with respect to amendments to their contracts, but no voting rights with respect to the companies' actions.

Only common shares provide ownership stake of the companies but don’t have a guaranteed dividend.

There's that word "ownership" again.

If that means voting rights and participating in company earnings, existing FnF common shareholders don't own the companies at all right now. FHFA has all the voting rights and Treasury gets all the money (or liquidation preference since 2019).

If it means something else, by all means tell me what it is.