Fannie Mae-No Politics (FNMA)

[kthomp19]

Hard to believe that Mr. Ackman is publicly advocating for the Government exercising the warrants - a position grossly against his own economic interests.

It is totally reasonable. Ackman's logic is that if Treasury exercises the warrants then they want the share price to be high, which is also good for legacy common shareholders like himself.

What would be against Ackman's economic interests would be a senior-to-common conversion, at which point Treasury's interests would oppose those of legacy common shareholders like Ackman.

So is it possible that Mr. Ackman has some type of counter-position whereby he would benefit substantially from such dilution? If so, how do we get in on it?

His counter-position is owning enough junior prefs that he can still make a lot of money even if the commons don't do very well. In his words, one reason he bought some juniors in 2017 was
"it hedges our risk of a restructuring that disproportionately benefits the preferred versus the common shares".

That is Ackman acknowledging both that the juniors can outperform the commons, and that he wouldn't be able to do anything about it.

I know there's some pretty smart and experienced people on this board - any ideas guys? or do we just have to sit back and settle for what we get?

Buy some junior prefs as a hedge like Ackman did.