Until the hedgie litigation circus commenced Fannie shares range-traded at between 25 & 50 cents, most of the time since imposition of conservatorship. Ackman is under HUGE pressure from redemptions which are only likely to increase going into tax loss selling season. Common S/Pcould retreat back to those levels for the remainder of the legal Coliseum events which could drag on for another 10 years. The Lamberth appeal isn't even likely to be revealed until Summer/2017, and could be re-appealed yet again.
If Ackman liquidates his FNMA position in commons, it will leave only Pagliara and Icahn (with a very small stake) with a position in commons. And, of course, retail investors. All the remaining big money players like Berkowitz (whose common holdings are but a token) and Perry are positioned with Pfds. Berko would like to privatize the GSEs and takeover their insurance business, himself. Read his proposal which I linked, yesterday, on investorshub. Most plans under present scrutiny involve commons being cancelled(along with government warrants) or, at minimum, heavily diluted.
The big defensive buttress seems to amount to commons will have voting rights that Pfds won't get as their shares are non-voting, so Pfds will get pissed on with no dividends or liquidation rights so the commons can get back what they claim to have lost during c-ship. The problem with that logic is that it just re-opens Pandora's Box in a second round of Delaware litigations about shareholder's rights being abridged... this time the Pfd-holders like Perry & Berkowitz being the aggrieved parties seeking remedy and damage awards. I would remind you that former Judge Steele is NOT Bill Ackman's hired gun. So how well do you think that strategy might play out?
I have put my money on the preferred shares with FNMAS as the better course for me. I hold a major position, by my standards, at least. Good luck to you.
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