Fannie Mae-No Politics (FNMA)

[Wise Man]

NYSE? $10? When I say $0 EPS posted every quarter due to the SPS LP increases for free, what do you understand?
Do you know something about stock valuation?

Also that it's a capital distribution, restricted (U.S. Code §4614(e), plus the CFR 1237.12 that supplemented it and did not replace or affect it, so the UST can't steal money from FnF arguing that it's in the pubic interest -exception 4-, because the statutory restriction is for the recapitalization. The public interest is to have a FnF adequately capitalized)

We visually can see how it works, as necessarily the offset with the reduction of Retained Earnings is meant to hold it in escrow, as it's the required CET1 for the recapitalization that upholds the Restriction on Capital Distribution.


This operation is missing in the balance sheets, when FnF don't post the SPS LP increased for free since the December 2017 PA amendment by the Mnuchin (Trump)-Mel Watt combo. This template was later on used for the case when the dividend payments to UST came to an end: Sept 2019 and the Jan 2021, by Mnuchin (Trump)-Calabria, currently in place.

The reason why they carried out this Financial Statement fraud, is because people would start thinking that the same occurred with the prior capital distribution restricted: the 10% and the NWS dividends. It was applied towards the exceptions in order to legalize them: reduce the SPS and Recap.

Separate Account phases 1 (10% dividend), 2 (NWS dividend) and 3 (SPS LP increased for free) translate into Common Equity held in escrow, as the reduction of SPS was also a recapitalization, because FnF sent Common Equity to Treasury (Dividend, a distribution of Earnings -Core Capital-. A "Changes in Equity" operation), in the form of capital distribution, not simple cash.

The next chart shows all the Net Worth generated by Freddie Mac during conservatorship. It's why the Separate Account is unwound with a posting in the Retained Earnings account that, in the case of Freddie Mac is $110B, versus the $-35B currently in its Balance Sheet.
All the Comprehensive Income generated (Retained Earnings + OCI) must show up. Notice that the ending balance also includes a tiny amount of AOCI $-22 million as seen on the Balance Sheet as of end of 2023.
Also, it's been considered that the Treasury Stock -stock buybacks- worth $3.9B, is retired.


Once everything is unwound, it's assessed a fair value for each share class and it's the reference price when they are placed on the NYSE.
The price discounts all available information at the time:
Have the JPS been redeemed or repurchased?
Will the FHA's MMIF cease to exist?
Etc.
Once they start trading, the PER valuation will use the estimated 2025 EPS. This is why in a takeover or on day one of NYSE placement, there is still a buying opportunity because I'm using for the reference price (Fair Value) the annualized adjusted 4Q2023 EPS, the most recent official EPS, and a 14x PE multiple that might be reduced to 12 times in Freddie Mac and 10 times in Fannie Mae, after watching the sluggish Q4 volume growth qoq (annualized 2.5% and 0%, respectively).
Then, the PER multiple could soon be back up at 14x taking into consideration the expectations in a the new Housing Finance System revamp, and the acquirers or investors will begin to realize that the stocks would be trading at an estimated 2025 PER of 10x and 8x, resp.. Prospects of a spin-off of CSS from FnF, etc.
Therefore, plenty of upside even after being placed on the NYSE, or a good price for the acquires if they are taken private.

It's time to let the stocks trade at their fair value and snub all the conspirators stuck to the Fanniegate scandal.

Once the publicly notify ( submit application ) that they have applied to trade on NYSE we will see the SP jump to at least $10. Do you think?