Viking61 Quote: “ What do you all believe that the SP would be if the Seniors and the LP were written down and then the Warrants were were exercised?” End of Quote
First off the SPSPA agreement is an illegal contract and I agree with our friend Barron’s statement at the end of this post.
To answer your question will use the latest earnings report; first calculation the Treasury doesn’t get away with the theft, and the second calculation with the warrants as you asked:
Fannie Mae
June 30, 2023
Fannie Mae Reports Net Income of $5.0 Billion for Second Quarter 2023
A multiple of 12 is not unreasonable
EARNINGS POWER OF THE BUSINESS
Fannie Mae’s common stock outstanding 1,158,087,567
$5.0 billion net income for the second quarter of 2023. Fannie Mae’s net earnings $5.0 billion per quarter, a projection of $20 billion net per year.
$20 billion net / 1,158,087,567 = $17.27 per share of earnings
Price to Earnings Ratio of 12 x $17.27 = $207.24 per share Intrinsic Value
With the WARRANTS: Fannie Mae’s common stock outstanding 1,158,087,567 diluted by the warrants at 79.9 percent adds a total of 5,761,629,686 shares outstanding…
$20 billion net / 5,761,629,686 = $3.47 per share of earnings,
PE Ratio of 12 x $3.47 = $41.64 per share intrinsic value,
Barron Quote:
“I posit that the variable liquidation preference outlined in the SPSPA and all amendments are an illegal commitment fee/charge attached to the purchase of the senior preferred shares. Prohibited by the Charter Act. The warrants are also a fee in consideration for access to the commitment. Prohibited by the Charter Act.
I posit that the senior preferred shares with their variable liquidation preference as outlined in the SPSPA constitute a new product for the purpose of the secondary mortgage market outlined in the charter act at sec 1719.
I posit that under the safety and soundness act as modified by HERA, the sale of SPS with a variable liquidation preference to Treasury under authority of sec 1719(g) of the Charter Act required notice in the federal register, opportunity for public comment, and official rule making by the plain language of the safety and soundness act.
I posit that the above statutory violations necessarily violate the warranties on behalf of the FHFA-C contained in the SPSPA.
301 Billion to be returned to the corporation. LP and warrants canceled. Future of 191 billion of taxpayer debt illegally given to corps to be determined.” End of Quote
