Barron said Quote: “I’m wondering if I should set damages based on calculating the change in value of my fraction of 20% of total shares times the warrant price of 0.000001 per share and my fraction of 0.1% of total shares after SPS conversion to commons. Plus court costs of course.”
Damages are a calculation of Value. (Calculated below dated 07/29/2022 without the warrants or SPS conversion).
Quoted share price and value or two very different calculations.
The share price as of today's trading has absolutely nothing to do with the VALUE of Fannie and Freddie. The share price the day before or the day after the net worth sweep has absolutely nothing to do with the VALUE of the companies.
Value is a calculation of Property, Plant and Equipment and most important EARNINGS POWER OF THE BUSINESS.
Quote: “Intrinsic value is an all-important concept that offers the only logical approach to evaluating the relative attractiveness of investments and businesses. Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.” – Warren Buffett" End of Quote
The Shareholders have lost both companies to the Treasury. ALL THE CASH THAT CAN BE TAKEN OUT OF THE BUSINESS DURING ITS REMAINING LIFE.
This Lost Value of the Earnings Power of the Business estimate is calculated without the warrants at $227.22 per share, using a multiple of 14 Price to Earnings Ratio. The number 14 can be thought of as a 14-year period of time.
Fannie Mae
07/29/2022
Reports $4.7 Billion for Second Quarter 2022
EARNINGS POWER OF THE BUSINESS
Fannie Mae’s common stock outstanding 1,158,087,567
Fannie Mae’s net earnings $4.7 billion per quarter, a projection of $18.8 billion net per year.
$18.8 billion net / 1,158,087,567 = $16.23 per share of earnings,
PE Ratio of 14 x $16.23 = $227.22 per share intrinsic value.
