Fannie Mae-No Politics (FNMA)

[kthomp19]

In my model I have them marked below:

These numbers aren't right. To get the correct numbers, you will need to look up the closing prices of FMCC and each junior pref series on August 16 2012 (the day before the NWS) and August 17 2012 (the day of) and subtract them.

When those are multiplied by the number of shares in each series and then added together, it makes exactly the amount the plaintiffs were requesting: $1.6B.

The jury awarded less than that ($612M) so those numbers will need to be adjusted downward by a factor of about 0.38 ($612M / $1.6B) to get the before-lawyer-fees damages per share.

For example, FMCKJ will get $0.65 per share (before lawyer fees) but FMCKN will only get $0.35. FREJN will get zero no matter what because its share price didn't drop at all from August 16 2012 to the next day. FMCC will get $0.07 per share.

I expect the lawyer fees to be a flat across-the-board percentage, so that won't affect decisions as to which junior pref series to own if one wants to buy purely for the damage award.

We haven't gotten a ruling from Lamberth regarding pre-judgment interest on the Fannie juniors. Without it FNMAS will get $0.51 per share, while with simple interest it will be $0.84 (perhaps a bit more depending on when the final judgment is entered) and with it compounded quarterly (as the plaintiffs have asked for) it would be $0.98.

my understanding is there could be an appeal to include reliance damages among others, and that in the current state of affairs the damage reward is basically at a minimum.

I believe you're right that the plaintiffs will appeal to get other (higher) damage models considered. Technically the $612M award should be a minimum but there's a chance the appeals court will rule in favor of the government and throw out the award entirely. I don't see this as likely but it's possible.